SOURCE: OceanFreight Inc.

November 11, 2008 16:05 ET

OceanFreight Inc. Reports Third Quarter 2008 Financial Results

ATHENS, GREECE--(Marketwire - November 11, 2008) - OceanFreight Inc. (NASDAQ: OCNF), a global provider of marine transportation services, today announced its financial results for the quarter ended September 30, 2008.

Financial Highlights for Third Quarter 2008

    -- For the third quarter of 2008 the Company reported Net Income of
       $9.0 million or $0.61 per common share.  Excluding a non-cash loss
       of $3.6 million associated with the valuation of the Company's
       interest rate swaps and $1.3 million non-cash compensation cost
       associated with the vesting of executives shares, Net Income for
       the third quarter of 2008 amounted to $13.9 million or $0.95 per
       common share.

    -- OceanFreight's Board of Directors declared a dividend of $0.77 per
       share in respect of the third quarter of 2008.  The dividend was
       paid on November 6, 2008, to common shareholders of record as of
       October 31, 2008.  This was the sixth consecutive quarterly
       dividend since the Company's IPO in April 2007.

Other Developments

    -- The Company has received a commitment from a first class bank for
       a $30.5 million term loan facility, the proceeds of which will be
       used in order to partly finance the acquisition of the M/T Tamara
       and M/T Tigani.  The facility is expected to be drawn down in the
       fourth quarter of 2008.

Anthony Kandylidis, the Company's President and Chief Executive Officer, commented: "I am pleased with yet another quarter of solid operational and financial performance. Our ability to obtain bank financing in this difficult credit environment is a testament to the strong reputation and confidence we have built within the banking community. Despite the current volatile market we have also managed to increase the size of our fleet to thirteen vessels and with the recent acquisition of the M/T Tamara and the M/T Tigani, we have enhanced our presence in the tanker sector, in line with our strategy of diversifying our fleet among multiple shipping sectors. Including our dividend for the third quarter of 2008, since our IPO in April of 2007, we have paid six quarterly dividends totaling $3.98 per share. We expect that with the employment of the M/T Olinda in the Blue Fin Tankers pool we can capture some of the strength that currently exists in the spot tanker market, which will complement the cash flow generated from our remaining twelve vessels which are all on fixed rate charters with an average remaining duration of approximately two years."

Third Quarter 2008 Results

For the quarter ended September 30, 2008, Gross Revenue amounted to $40.3 million and Operating Income amounted to $16.3 million.

Net Income for the third quarter of 2008 was $9.0 million or $0.61 per common share calculated on 14,659,201 weighted average common shares outstanding. This Net Income figure includes a non-cash loss of $3.6 million associated with the valuation of the Company's interest rate swaps and $1.3 million non-cash compensation cost associated with the vesting of executives shares. Excluding the above non-cash items Net Income for the third quarter of 2008 amounted to $13.9 million or $0.95 per common share.

Net cash provided by operating activities and EBITDA for the third quarter of 2008 was $24.9 million and $23.1 million, respectively. Please see later in this release for a reconciliation of EBITDA to net cash provided by Operating activities.

An average of 11 vessels were owned and operated during the third quarter of 2008, earning an average Time Charter Equivalent, or TCE, rate of $35,649 per day.

Capitalization

On September 30, 2008, debt (debt, net of deferred financing fees) to total capitalization (debt, net of deferred financing fees, and stockholders' equity) was 55.0% and net debt (debt less cash and cash equivalents) to total capitalization was 41.8%. This does not include the $30.5 million term loan facility announced above.

As of September 30, 2008, the Company had a total liquidity of approximately $75.2 million.

Capital expenditures

During October 2008, one of our Panamax drybulk carriers underwent its scheduled special survey for a period of approximately 22 days with a total cost of approximately $1.4 million. It is the policy of the Company to expense special survey costs as incurred.

Dividend Payment

OceanFreight's Board of Directors declared a dividend of $0.77 per share in respect of the third quarter of 2008. The dividend was paid on November 6, 2008, to shareholders of record as of October 31, 2008.

On August 14, 2008, we paid a dividend in the amount of $0.77 per share in respect of the second quarter of 2008. This dividend payment satisfied the test under our Amended and Restated Articles of Incorporation for early conversion of all of our subordinated shares into common shares on a one-for-one basis. As a result, all 2,085,150 subordinated shares were converted into 2,085,150 common shares on August 15, 2008.

Since the Company's listing on the NASDAQ Global Market in April 2007, OceanFreight has declared six consecutive quarterly dividends totaling $3.98 per share.

Fleet Data

                                                  Three months ended
                                                  September 30, 2008
                                                      --------------
Average number of vessels (1)                                  11.00
                                                      --------------
Total voyage days for fleet (2)                                1,005
                                                      --------------
Total calendar days for fleet (3)                              1,012
                                                      --------------
Fleet Utilization (4)                                          99.31%
                                                      --------------
Time charter equivalent (5)                                   35,649
                                                      --------------
Vessel operating expenses (daily) (6)                          6,210
                                                      --------------
Management fees (daily)                                          712
                                                      --------------
General and administrative expenses (daily) (7)                  739*
                                                      --------------
Total vessel operating expenses (daily) (8)                    8,961
                                                      --------------

*Excluding $1.3 million non-cash compensation cost associated with the
vesting of the shares of Company executives

(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, 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.
(6) Daily vessel operating expenses include crew costs, provisions, deck
and engine stores, lubricating oil, insurance, maintenance and repairs and
are 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.

The following table reflects the calculation of our TCE rates for the three months ended September 30, 2008:

(Dollars in thousands except for voyage days and TCE rate)
                                                       ---------

Gross revenues                                            40,297

Voyage expenses                                           (4,470)


                                                       ---------
Time Charter Equivalent revenues                          35,827
                                                       =========
Total voyage days for fleet                                1,005

Time charter equivalent (TCE) daily rate                  35,649

Financial Statements

The following are OceanFreight Inc.'s Consolidated Statements of Income for the three month periods ended September 30, 2008 and 2007:

(Dollars in thousands, except                3 Months Ended 3 Months Ended
  for share and per share data)               September 30,  September 30,
                                                  2008           2007
                                              -------------  -------------
                                                Unaudited      Unaudited
             INCOME STATEMENT DATA
Voyage revenues                               $      37,704  $      13,742
Imputed revenue                                       2,593          2,088
                                              -------------  -------------
Gross Revenue                                        40,297         15,830
Voyage expenses                                      (4,470)          (763)
Vessels operating expenses                           (6,286)        (4,007)
Depreciation                                        (10,485)        (5,647)
Management fees                                        (721)          (295)
General and administrative expenses                  (2,063)        (1,125)
Survey and dry docking cost                                         (1,685)

              Operating Income                       16,272          2,308

Interest and finance costs                           (4,084)         (1907)
Interest income                                         370            573
Gain on derivative instruments                       (3,628)             -
Net Income                                    $       8,930  $         974
Basic and fully diluted earnings per common
 share                                        $        0.61  $        0.07
Weighted average number of shares outstanding    14,659,201     14,457,237

The following are OceanFreight Inc.'s Consolidated Balance Sheets as at September 30, 2008 and December 31, 2007

OCEANFREIGHT INC.
Consolidated Balance Sheets
September 30, 2008 and December 31, 2007
(Expressed in thousands of U.S. Dollars - except for share
 and per share data)
                                                        2008       2007
                                                     (Unaudited)
                                                      ---------  ---------
ASSETS
---------------------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents                             $  75,248  $  19,044
 Accounts receivable                                        343        226
 Inventories                                                887        678
Prepayments and other                                     2,085        763
                                                      ---------  ---------
 Total current assets                                    78,563     20,711
FIXED ASSETS, NET:
 Vessels, net                                           520,011    485,280
 Other, net                                                 132         61
                                                      ---------  ---------
 Total fixed assets, net                                520,143    485,341
OTHER NON CURRENT ASSETS:
Deferred financing fees, net                              1,642      1,860
Derivative asset                                          2,253          -
Restricted cash                                           5,500          -
                                                      ---------  ---------
 Other, net                                                  13         13
                                                      ---------  ---------
Total other non current assets, net                       9,408      1,873
 Total assets                                         $ 608,114  $ 507,925
                                                      ---------  ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Current Portion of Long-term debt                    $  33,389  $  16,000
 Accounts payable                                         1,312      2,427
Due to related parties                                      781        742
 Accrued liabilities                                      8,137      2,909
 Unearned revenue                                         3,873      1,488
 Derivative liability                                     1,067          -
Imputed deferred revenue, current portion                10,290     10,318
                                                      ---------  ---------
 Total current liabilities                               58,849     33,884
NON CURRENT LIABILITIES
 Imputed deferred revenue, net of current portion         8,335     16,031
Long term debt, net of current portion                  283,111    244,600
                                                      ---------  ---------
Total non current liabilities                           291,446    260,631
COMMITMENTS AND CONTINGENCIES                                 -          -

STOCKHOLDERS' EQUITY:
Preferred stock, $ 0.01 par value; 5,000,000 shares
 authorized, none issued                                      -          -
Common stock, $0.01 par value; 95,000,000 shares
 authorized; 16,422,493 and 12,394,079 shares issued
 and outstanding at September 30, 2008 and December
 31, 2007, respectively                                     164        124
Subordinated Shares, par value $0.01; 10,000,000
 shares authorized, 0 and 2,063,158 shares issued and
 outstanding at September 30, 2008 and December 31,
 2007 respectively.                                           -         21
Additional paid-in capital                              257,863    218,263
Accumulated earnings/(deficit)                             (208)    (4,998)
                                                      ---------  ---------
Total stockholders' equity                              257,819    213,410
                                                      ---------  ---------

 Total liabilities and stockholders' equity           $ 608,114  $ 507,925
                                                      =========  =========

EBITDA Reconciliation

OceanFreight 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 provided by operating activities to EBITDA for the three months ended September 30, 2008

(Dollars in thousands)
                                                                 30-Sep-08
                                                                 ---------

Net cash provided by operating activities                           24,866
Net (decrease) in current assets, excluding cash and cash
 equivalents                                                        (3,223)
Net decrease in current liabilities, excluding derivative
 liability, current portion of long term debt and imputed
 current portion of imputed deferred revenue                           260
Net Interest expense                                                 3,714
Loss on derivative instruments                                      (3,628)
Amortization of stock based compensation                            (1,330)
Amortization of imputed deferred revenue                             2,593
Amortization of deferred financing costs included in interest
 expense                                                              (123)
                                                                 ---------
EBITDA                                                              23,129
                                                                 =========

Fleet List

The table below provides summary information concerning our fleet and its current employment profile as of November 11, 2008:

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

DRYBULK
-------
Trenton    1995  75,229  Panamax    TC     $   26,000     Apr-10     Jun-10
Pierre     1996  70,316  Panamax    TC     $   23,000     Jun-10     Oct-10
Austin     1995  75,229  Panamax    TC     $   26,000     Apr-10     Jun-10
Juneau     1990 149,495 Capesize    TC     $   48,700     Sep-09     Oct-09
Lansing    1996  73,040  Panamax    TC     $   24,000     May-09     Sep-09
Helena     1999  73,744  Panamax    TC     $   32,000     Apr-12     Dec-12
Topeka     2000  74,710  Panamax    TC     $   23,100     Oct-10     May-11
Richmond   1995  75,265  Panamax    TC     $   29,100     Dec-09     Apr-10
Augusta    1996  69,053  Panamax    TC     $   42,100     Nov-11     Feb-12

TANKERS
-------
Pink Sands 1993  93,723  Aframax    TC     $   27,450     Dec-10     Jan-11
Olinda     1996 149,085  Suezmax   Pool
Tigani     1991  95,951  Aframax    TC     $   29,800    Sept-09     Nov-09
Tamara     1990  95,793  Aframax    TC     $   27,000     Nov 10   March 11

Conference Call and Webcast: November 12, 2008, at 10:00 A.M. EST

OceanFreight management team will host a conference call on November 12, 2008, at 10:00 a.m. EST to discuss the Company's financial results for the Third Quarter 2008.

Conference Call details:

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK 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 Wednesday , November 19, 2008 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0) 1452 500 000 (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. was incorporated in 2006 to acquire high quality secondhand vessels and deploy them on medium and long term charters. The Company began operations with the delivery of its first vessel in June 2007 and currently owns and operates a fleet of thirteen vessels, consisting of one Capesize drybulk carrier, eight Panamax drybulk carriers, one Suezmax tanker and three Aframax tankers with a total carrying capacity of 1,170,633 dwt.

OceanFreight's Inc. 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 charterhire 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 US Securities and Exchange Commission.

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