Quarter Amount of profit share
revenues recorded per
quarter
1st Quarter 2007 $ 1.1 million
2nd Quarter 2007 $ 1.0 million
3rd Quarter 2007 $ 1.3 million
4th Quarter 2007 $ 0.6 million
1st Quarter 2008 $ 1.2 million
2nd Quarter 2008 $ 1.6 million
3rd Quarter 2008 $ 1.8 million
Total $ 8.6 million
Operating expenses for our MR product tankers averaged $ 4,972 per day per
vessel in the third quarter of 2008, versus $ 5,074 per day per vessel in
the third quarter of 2007. Our Panamax product tankers averaged operating
expenses of $ 5,577 per day per vessel in the third quarter of 2008, versus
$ 4,380 per day per vessel in the third quarter of 2007. The increase of
the daily operating expenses of the Panamax product tankers relates mainly
to an increase in crew wages and maintenance cost for the Omega Lady Miriam
which was incurred during drydock.
First Nine Months 2008 Results
For the nine months ended September 30, 2008, Omega Navigation reported
total revenues of $ 57.6 million and Net Income of $ 15.4 million, or $
1.01 per basic share. Excluding a loss on its interest rate derivative
instruments, a gain on warrants revaluation and incentive compensation
grants, the Company earned $ 16.9 million or $ 1.11 per basic share.
EBITDA for the first nine months of 2008 was $ 40.1 million. Please see
below for a reconciliation of EBITDA to Cash from Operating Activities.
Net Income included $ 4.6 million of revenues primarily arising from profit
sharing on charters of the vessels Omega Lady Miriam, Omega Lady Sarah,
Omega Theodore and Omega Emmanuel.
The Company owned and operated an average of 8 vessels, all product
carriers, during the first nine months of 2008, and 7.3 product carriers
during the first nine months of 2007. Excluding profit sharing, the Panamax
product carriers in our fleet earned an average time-charter equivalent
rate of $ 25,054 per day per vessel during the first nine months of 2008,
versus $ 25,004 per day per vessel during the first nine months of 2007.
The Handymax product tankers in our fleet earned an average time charter
equivalent rate of $ 20,763 per vessel per day during the first nine months
of 2008, versus $ 20,798 per day per vessel during the nine months of 2007.
Operating expenses for our Panamax product tankers averaged $ 5,353 per day
per vessel in the first nine months of 2008, versus $ 4,566 per day per
vessel, excluding any initial outfitting and pre-delivery expenses, in the
first nine months of 2007. Our MR product tankers averaged operating
expenses of $ 4,880 per day per vessel in the first nine months of 2008,
versus $ 4,603 per day per vessel in the first nine months of 2007. The
increase of the daily operating expenses of our Panamax product tankers as
well as our MR product tankers relates mainly to an increase in crew wages.
Lower Interest Expense
Interest Expense and finance costs in the third quarter of 2008 were $ 3.1
million, and in the corresponding quarter of 2007 interest expense and
finance costs were $ 5.2 million. For the nine months ended September 30,
2008, interest expense and finance costs were $ 10.3 million, versus $ 13.8
million in the same period of 2007. The difference between 2007 and 2008 is
attributable to the current lower interest rate environment. We recently
entered into an interest rate swap agreement whereby we fixed our interest
cost for a notional amount of $ 100 million at a rate of 2.585%. The above
arrangement, together with previous hedging arrangements, has the effect of
lowering our overall interest rate exposure.
Fleet Developments
Current Fleet
Omega Navigation's current fleet includes eight double hull product tankers
with an aggregate carrying capacity of 512,358 dwt. All of the Company's
product tankers are employed under time charters having a minimum
contracted term of three years from their respective delivery dates and are
chartered to established charterers including Norden, ST Shipping
(Glencore) and Torm. Six of the eight product tankers have profit sharing
arrangements which enable the Company to share in the charter market's
upside potential. The Company recently announced new charters on the Omega
Lady Miriam and Omega Lady Sarah which ensures time charter coverage on
these vessels into 2012. The following table illustrates the current
contract expirations and renewals:
Latest
Charter Profit Charter
Vessel Rate Sharing Expiration Renewal
Omega Queen $ 26,500 No Jun-09 Charterer’s extension
option at $28,500 through
Jun-11
Omega King $ 26,500 No Jul-09 Charterer’s extension
option at $28,500 through
Jul-11
Omega Lady Sarah $ 24,000 Yes Q3-12 New charter commences 2/3Q
’09 at 25,500/day plus
50/50 profit sharing
Omega Lady Miriam $ 24,000 Yes Q4-12 New charter commences 3/4Q
’09 at 25,500/day plus
50/50 profit sharing
Omega Prince $ 21,000 Yes Jul-09 Charterer’s extension
option at $24,000 through
Jul-10
Omega Princess $ 21,000 Yes Aug-09 Charterer’s extension
option at $24,000 through
Aug-10
Omega Emmanuel $ 25,500 Yes Apr-10
Omega Theodore $ 25,500 Yes May-10
Acquisition contracts
On May 19, 2008 the Company announced that it had entered into an agreement
with an unaffiliated third party to purchase two 47,000 dwt newbuilding
double hull product tankers for $ 55.5 million each. The first vessel is
scheduled to be delivered in the second quarter of 2009 and the second
vessel is scheduled to be delivered in the third quarter of 2010. The
purchase agreement required a deposit of 10% of the purchase price that was
placed in a joint account of the sellers and buyers on May 29, 2008. The
Company has entered into an agreement with a commercial bank to finance 90%
of the above deposit payment with bank debt and the remainder of $1.2
million was financed from cash available from operations. The Company has
also agreed with the same commercial bank for the financing of up to 75% of
the purchase price of the vessels at the time of their respective
deliveries. The agreed interest rate will range between 100 to 120 bps over
LIBOR, depending on the applicable ratio of loan to vessels' market value
and the financial covenants are in line with the existing covenants under
our other senior secured credit facilities. At delivery, the vessels will
each be chartered for three years to ST Shipping (a subsidiary of Glencore
International A.G.) for a gross base rate of $ 21,135 per day per vessel.
In addition, the charters also provide for profit sharing, whereby the
Company will share equally in any upside above the base charter rate with
the charterer, based on the vessels' actual quarterly trading results.
Newbuilding contracts
On June 19, 2007, the Company announced that it had signed shipbuilding
contracts with Hyundai Mipo Dockyard, to construct and acquire five
newbuilding double hull Handymax product tankers, each with a capacity of
37,000 dwt. Four of these vessels are scheduled for delivery in 2010 with
the fifth scheduled for delivery in early 2011. With the addition of these
seven vessels, Omega's fleet will consist of 15 product carriers with a
total deadweight capacity of 791,358 tons.
The following table illustrates the delivery dates and charter arrangements
on all the newbuildings:
Profit Charter
Vessel Delivery Charter Rate Sharing Expiration
------------ ------------ ------------ ------------
TBN1 Jun-09 $ 21,135 Yes Jun-12
TBN2 Mar-10 Confidential No Mar-13
TBN3 Jul-10 $ 21,135 Yes Jul-13
TBN4 Jul-10
TBN5 Sep-10
TBN6 Dec-10
TBN7 Feb-11
Note: TBN2 above rate is confidential but vessel is expected to generate
annual EBITDA of about $ 6 million.
Management Commentary:
George Kassiotis, President and Chief Executive Officer of Omega
Navigation, commented: "We are pleased to have concluded our tenth
consecutive profitable quarter since our IPO in April 2006. We attribute
our strong operational and financial results to our strategy of acquiring
high quality modern vessels and seeking predictable and stable cash flows
through the long term employment of our vessels. In addition, the fact that
the charters of six of our eight product tankers have profit sharing has
enabled us to participate in the upside of the charter market and thereby
maximize our profitability and the return for our shareholders. The profit
sharing agreements in 2008 have allowed the Company to enjoy particularly
strong earnings.
"We continue to return strong operating results even in this most
challenging economic environment. As evidenced by our recent charters of
the Omega Lady Miriam and Omega Lady Sarah, time charter rates in the
product tanker sector have remained solid, while rates in some other
shipping sectors have come under some pressure. With oil prices
significantly below the highs we saw this past summer, we are cautiously
optimistic that demand for petroleum products in the short term will
rebound and we continue to be bullish about our sector in the long term.
Based on current charter rates and the continued performance of each of our
charterers, we believe that we are well positioned to continue to operate
profitably even in this economic climate. We also believe that we continue
to have strong relationships with our commercial lenders, that are large
European and Asian banks which to date have held up extremely well, even in
this credit crisis.
"All of the vessels in our current fleet are under
three-year time charters with established charterers pursuant to which we
have contracted 100% of our operating days for 2008 and 79% for 2009. The
charters on the Panamax Ice Class vessels delivered to us in March and
April of 2007, respectively, extend to 2010. The recently announced
acquisition of two newbuilding product tankers to be delivered to us in the
second quarter of 2009 and the third quarter of 2010, respectively, have
also been fixed on
three-year time charters, thereby enhancing the stability and visibility of
our cash flows. In addition, a
three-year time charter has been concluded on the first of the five
newbuilding vessels we contracted for in mid 2007. This brings our overall
fleet coverage to 80% in 2009. The table above shows that, assuming that
each of charterers continue to perform in accordance with the terms of
their respective charters, we are well on our way for both our current
fleet and our newbuildings in securing profitable time charters for the
entire fleet which will continue to allow us to achieve strong and visible
earnings.
"We would like to reiterate that we are continuing to pursue a strategy of
prudent growth, gradually expanding our fleet and our revenue and profit
generation potential. Based on the activity we have announced so far, we
expect to add seven newbuilding product carriers to our fleet, thereby
expanding it to a total of 15 vessels, and solidifying our position as a
major player in the global product tanker market. We expect to be taking
delivery of these seven vessels between the second quarter of 2009 and the
first quarter of 2011. In addition, the two MR resale acquisitions are on
terms that are favorably comparable to the current value of a promptly
delivered vessel, and current newbuilding contract values for vessels
similar to our five newbuildings currently exceed the prices that we
contracted for.
"We remain optimistic about the long term fundamentals of the product
tanker market, the area of our strategic focus. We believe that we enjoy
strong competitive advantages in this market with our focused business
strategy, our fleet of young high quality vessels, long term employment
with established charterers, a solid and flexible capital structure and a
strong management team, enabling us to continue delivering strong, stable
and predictable results for our shareholders.
"Finally, we continued with our stable dividend policy, declaring our tenth
consecutive quarterly dividend of $ 0.50 per common share with respect to
the third quarter of 2008."
Quarterly Dividend
On November 3, 2008 the Company announced its tenth consecutive quarterly
dividend since it went public, of $ 0.50 per common share, payable on
November 28, 2008 to shareholders of record as of November 17, 2008.
Gregory McGrath, Chief Financial Officer of Omega Navigation, commented,
"We have now paid or declared on schedule ten consecutive quarterly
dividends since going public in the amount of $ 0.50 per common share,
aggregating $ 5.00 per common share. Our overall objective is to pursue a
strategy of disciplined growth, while at the same time implementing a
stable, dividend payout. We believe this strategy will maximize shareholder
value over the long term.
"As of September 30, 2008, the Company had a ratio of debt to market value
of about 55% with respect to the current eight vessel fleet and a net debt
to book capitalization ratio of 64%, including debt already incurred under
the pre-delivery financing of the seven newbuildings, which we believe are
modest ratios for industry standards given our strong time charter coverage
and the young age and quality of our fleet.
"Asset values in the product tanker sector have held up reasonably well,
and would have to fall significantly to trigger a default under our
security value maintenance loan covenants.
"The restructuring of our debt facility toward the end of the first quarter
of this year has had the effect of taking advantage of our current low
interest rate environment, decreasing our interest expenses, while at the
same time it has increased our financial flexibility and we believe it will
enhance our ability to pursue our strategy of prudent growth aimed at
increasing shareholder value in the longer term."
Fleet Data
Panamax Tankers Handymax Tankers
Three months ended Three months ended
-------------------------- --------------------------
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Number of vessels
at end of period 6 6 2 2
Average age of
fleet (in years) 3 2 2 1
Ownership days (1) 552 552 184 184
Available days (2) 543.19 552 184 184
Operating days (3) 543.19 552 184 184
Fleet Utilization (4) 100% 100% 100% 100%
Voyage revenues
(net of voyage
expenses) (7) $ 13,598,722 $ 13,826,103 $ 3,824,960 $ 3,822,940
Time charter
equivalent (TCE)
rate $/day (5)(7) 25,035 25,047 20,788 20,777
Vessel operating
expenses (net of
predelivery
expenses) $ 3,078,328 $ 2,418,015 $ 914,902 $ 933,632
Daily vessel
operating expenses
$/day(6) 5,577 4,380 4,972 5,074
------------ ------------ ------------ ------------
Nine months ended Nine months ended
-------------------------- --------------------------
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Number of vessels
at end of period 6 6 2 2
Average age of
fleet (in years) 3 2 2 1
Ownership days (1) 1,644 1,436.76 548 546
Available days (2) 1,635.19 1,436.76 548 546
Operating days (3) 1,635.19 1,436.76 548 546
Fleet Utilization (4) 100% 100% 100% 100%
Voyage revenues
(net of voyage
expenses) (7) $ 40,967,355 $ 35,925,253 $ 11,378,182 $ 11,355,851
Time charter
equivalent (TCE)
rate $/day (5)(7) 25,054 25,004 20,763 20,798
Vessel operating
expenses (net of
predelivery
expenses) $ 8,799,990 $ 6,560,027 $ 2,674,263 $ 2,513,188
Daily vessel
operating expenses
$/day(6) 5,353 4,566 4,880 4,603
------------ ------------ ------------ ------------
(1) Ownership days are the aggregate number of days in a period during
which each vessel in our fleet has been owned by us. Ownership days are an
indicator of the size of our fleet over a period and affect both the amount
of revenues and the amount of expenses that we record during a period.
(2) Available days are the number of our ownership days less the aggregate
number of days that our vessels are off-hire due to scheduled repairs or
repairs under guarantee, vessel upgrades or special surveys. The shipping
industry uses available days to measure the number of days in a period
during which vessels should be capable of generating revenues.
(3) Operating days are the number of available days in a period less the
aggregate number of days that our vessels are off-hire due to unforeseen
circumstances. The shipping industry uses operating days to measure the
aggregate number of days in a period during which vessels actually generate
revenues.
(4) We calculate fleet utilization by dividing the number of our operating
days during a period by the number of our available days during the period.
The shipping industry uses fleet utilization to measure a company's
efficiency in finding suitable employment for its vessels and minimizing
the number of days that its vessels are off-hire for reasons other than
scheduled repairs or repairs under guarantee, vessel upgrades, special
surveys or vessel positioning.
(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 available 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 include crew wages and related
costs, the cost of insurance, expenses relating to repairs and maintenance
(excluding drydocking), the costs of spares and consumable stores, tonnage
taxes and other miscellaneous expenses, but excludes any pre-delivery
expenses incurred at or prior to the delivery of the product tankers, are
calculated by dividing vessel operating expenses by ownership days for the
relevant period. For the nine months ended September 30, 2008, and
September 30, 2007, pre-delivery expenses of Panamax product tankers
amounted to $ 0 million and $ 0.8 million respectively.
(7) For the three months ended September 30, 2008, excludes $ 1.8 million
of profit sharing revenue booked in the third quarter of 2008 related to
profit sharing on charters of the vessels Omega Lady Sarah, Omega Lady
Miriam, Omega Emmanuel and Omega Theodore. For the nine months ended
September 30, 2008, excludes $ 4.6 million of profit sharing revenue booked
in the first nine months of 2008 related to profit sharing on charters of
the vessels Omega Lady Sarah, Omega Lady Miriam, Omega Emmanuel, Omega
Theodore, Omega Prince and Omega Princess.
Fleet Profile and Employment:
The table below describes the profile and employment of the Company's fleet
as of today:*
Delivery Daily Latest
Sister Year Deadweight Date Hire Re-
Vessel Ship (1) Built (dwt) Type Rate (2) delivery
CURRENT FLEET
Panamax Product Tankers
Omega
Queen A 2004 74,999 LR1 May-06 $26,500 (3) Jun-09
Omega
King A 2004 74,999 LR1 Jun-06 $26,500 (3) Jul-09
Omega
Lady
Sarah C 2004 71,500 LR1 – Jun-06 $24,000/(4) Q3-12
Ice $25,500
Class 1C
Omega
Lady
Miriam C 2003 71,500 LR1 – Aug-06 $24,000/(4) Q4-12
Ice $25,500
Class 1C
Omega
Emmanuel D 2007 73,000 LR1 - Mar-07 $25,500 (6) Apr-10
Ice
Class 1A
Omega
Theodore D 2007 73,000 LR1 - Apr-07 $25,500 (6) May-10
Ice
Class 1A
Handymax Product Tankers
Omega
Prince B 2006 36,680 MR1 - Jun-06 $21,000 (5) Jul-09
Ice
Class 1A
Omega
Princess B 2006 36,680 MR1 - Jul-06 $21,000 (5) Aug-09
Ice
Class 1A
TOTAL (DWT): 512,358
Additional Handymax Vessels
TBN1 F 2009 47,000 MR2 IMO Jun-09 $21,135 (8) Jun-12
II
TBN2 E 2010 37,000 MR1 IMO Mar-10 Confi- (7) Mar-13
II/III dential
TBN3 F 2010 47,000 MR2 IMO Jul-10 $21,135 (8) Jul-13
II
TBN4 E 2010 37,000 MR1 IMO Jul-10
II/III
TBN5 E 2010 37,000 MR1 IMO Sep-10
II/III
TBN6 E 2010 37,000 MR1 IMO Dec-10
II/III
TBN7 E 2011 37,000 MR1 IMO Feb-11
II/III
Total (DWT): 279,000
* This table assumes the full performance by each our current and
anticipated customers under our current and contracted charters.
(1) Each vessel is a sister ship of each other vessel that has the same
letter.
(2) This table shows gross charter rates and does not include brokers'
commissions, which are 1.25% of the daily time charter rate.
(3) The Company has granted Torm the option to extend the charter for 24
months at a minimum daily time charter hire rate of $28,500.
(4) In 3rd and 4th quarter 2009 the Omega Lady Sarah and Omega Lady Miriam
will enter into a new charter with ST Shipping at a rate of $25,500. Plus
any additional income under profit sharing agreements, according to which
charter earnings in excess of $25,500 per day will be divided equally
between Omega Navigation and ST Shipping.
(5) Plus any additional income under profit sharing provisions of the
charter agreements with D/S Norden A/S. The Company has granted the
charterers the option to extend the charter for 12 months at a minimum
daily time charter hire rate of $ 24,000.
(6) Plus any additional income under profit sharing arrangements, according
to which charter earnings in excess of $ 25,500 per day will be divided
equally between Omega Navigation and ST Shipping. When the vessels trade in
ice conditions, the profit sharing between Omega Navigation and ST Shipping
is 65/35% respectively.
(7) Rate is confidential but the vessel is expected to generate annual
EBITDA of about $6 million. The Company has granted NYK the option to
extend the charter for two one year periods at higher rates.
(8) Plus any additional income under profit sharing arrangements, according
to which charter earnings in excess of $ 21,135 per day will be divided
equally between Omega and ST Shipping.
Conference Call Details:
As previously announced, the Company's management will host a conference
call tomorrow, November 18, 2008 at 10:00am EST to discuss its third
quarter 2008 results.
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 "Omega."
A telephonic replay of the conference call will be available until November
25, 2008 by dialling 1-866-247-4222 (US Toll Free Dial In), 0800-953-1533
(UK Toll Free Dial In) or +44(0)1452-55-00-00 (Standard International Dial
In). Access Code: #3663884.
Omega Navigation Enterprises Inc
Consolidated Statement of Income
(All amounts expressed in thousands of U.S. Dollars)
Three months ended Nine months ended
------------------------ ------------------------
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
CONTINUING OPERATIONS
Revenues:
Voyage revenue 19,495 19,231 57,647 51,367
Expenses:
Voyage expenses 262 242 740 673
Vessel operating
expenses 3,993 3,326 11,474 9,847
Depreciation and
amortization 4,749 4,750 14,092 12,809
Management fees 312 297 933 823
Options’ premium - - - 200
General and
administrative
expenses 1,138 1,021 3,644 3,210
Incentive compensation 208 136 1,151 311
Foreign currency
(gains) / losses (87) 44 (12) 62
----------- ----------- ----------- -----------
Operating income 8,920 9,415 25,625 23,432
----------- ----------- ----------- -----------
Other income (expenses)
Interest and finance
costs (3,146) (5,163) (10,339) (13,758)
Interest income 205 284 466 1,605
Change in fair value of
warrants 1,105 685 369 233
Loss on derivative
instruments (1,904) (938) (740) (572)
----------- ----------- ----------- -----------
Total other income
/(expenses), net (3,740) (5,132) (10,244) (12,492)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS 5,180 4,283 15,381 10,940
----------- ----------- ----------- -----------
DISCONTINUED OPERATIONS
Income/(Loss) from
discontinued
operations of the bulk
carrier fleet - - 20 (154)
----------- ----------- ----------- -----------
INCOME/(LOSS) FROM
DISCONTINUED
OPERATIONS - - 20 (154)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income 5,180 4,283 15,401 10,786
=========== =========== =========== ===========
Omega Navigation Enterprises Inc
Consolidated Balance Sheet
(All amounts expressed in thousands of U.S. Dollars)
September 30, December 31,
2008 2007
----------- -----------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 13,842 8,893
Accounts receivable, trade 146 179
Inventories 596 501
Prepayments and other 694 848
Restricted cash 167 417
Derivative asset 137 -
----------- -----------
Total current assets 15,582 10,838
----------- -----------
FIXED ASSETS:
Vessels, net 447,209 461,251
Property and equipment, net 76 103
Advances for vessels’ acquisition 57,206 44,869
----------- -----------
Total fixed assets 504,491 506,223
----------- -----------
OTHER NON CURRENT ASSETS:
Deferred charges 1,191 343
Derivative asset 403 -
Restricted cash 5,140 5,081
----------- -----------
Total other non current assets 6,734 5,424
----------- -----------
Total assets 526,807 522,485
=========== ===========
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long term debt 69 781
Accounts payable 1,196 869
Accrued and other current liabilities 2,969 2,740
Deferred revenue 349 1,869
Warrants 6,729 -
Derivative liability 796 1,151
Dividends payable 68 30
----------- -----------
Total current liabilities 12,176 7,440
----------- -----------
NON-CURRENT LIABILITIES:
Long term debt, net of current portion 334,656 322,565
Warrants - 7,097
Derivative liability 1,318 428
Long Term Dividends payable 140 81
Other Long Term Liabilities 16 -
----------- -----------
Total non-current liabilities 336,130 330,171
----------- -----------
----------- -----------
COMMITMENTS AND CONTINGENCIES: - -
----------- -----------
Stockholders' equity:
Common stock 152 151
Additional paid-in capital 198,198 197,047
Accumulated deficit (19,849) (12,324)
----------- -----------
Total stockholders' equity 178,501 184,874
----------- -----------
Total liabilities and stockholders' equity 526,807 522,485
=========== ===========
Omega Navigation Enterprises Inc
Consolidated Statement of Cash Flows
(All amounts expressed in thousands of U.S. Dollars)
Three months ended Nine months ended
------------------------ ------------------------
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Cash flows from
operating activities
Net income from
continuing operations 5,180 4,283 15,381 10,940
Net cash provided by
continuing operating
activities 10,441 9,579 29,490 25,359
Net cash used in
discontinued operating
activities - - - (692)
----------- ----------- ----------- -----------
Net cash provided by
continuing and
discontinued operating
activities 10,441 9,579 29,490 24,667
----------- ----------- ----------- -----------
Cash flows used in
investing activities
Net cash used in
investing
activities-continuing
operations (340) (22,400) (12,341) (142,734)
Net cash provided by
investing
activities-discontinued
operations - - - 81,468
----------- ----------- ----------- -----------
Net cash used in
investing activities-
continuing and
discontinued
operations (340) (22,400) (12,341) (61,266)
----------- ----------- ----------- -----------
Cash flows (used
in)/provided by
financing activities
Net cash (used
in)/provided by
financing
activities-continuing
operations (7,486) 3,757 (12,200) 79,755
Net cash used in
financing
activities-discontinued
operations - - - (37,394)
----------- ----------- ----------- -----------
Net cash (used
in)/provided by
financing
activities-continuing
and discontinued
operations (7,486) 3,757 (12,200) 42,361
----------- ----------- ----------- -----------
Net increase/(decrease)
in cash and cash
equivalents 2,615 (9,064) 4,949 5,762
Cash and cash
equivalents at the
beginning of the
period 11,227 18,688 8,893 3,862
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period 13,842 9,624 13,842 9,624
=========== =========== =========== ===========
Omega Navigation Enterprises Inc
Reconciliation of EBITDA (1) to Cash from Operating Activities
(All amounts expressed in thousands of U.S. Dollars)
CONTINUING OPERATIONS Three months ended Nine months ended
------------------------ ------------------------
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net cash from operating
activities 10,441 9,579 29,490 25,359
Net increase/(decrease)
in current assets (239) (29) (92) 123
Net (increase)/decrease
in current liabilities
excluding bank debt (329) (49) 831 (618)
Incentive compensation (208) (136) (1,151) (311)
Write off of options’
premium - - - (200)
Change in fair value of
warrants 1,105 685 369 233
Net interest
(income)/expense 3,628 4,878 10,618 12,108
Payments for drydocking
costs 528 - 528 -
Amortization of
financing costs (152) (78) (507) (220)
EBITDA 14,774 14,850 40,086 36,474
CONTINUING &
DISCONTINUED
OPERATIONS Three months ended Nine months ended
------------------------ ------------------------
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net cash from
operating activities 10,441 9,579 29,490 24,667
Net decrease in current
assets (239) (29) (92) (48)
Net (increase)/decrease
in current liabilities
excluding bank debt (329) (49) 851 132
Incentive compensation (208) (136) (1,151) (311)
Write off of options’
premium - - - (200)
Change in fair value of
warrants 1,105 685 369 233
Net interest
(income)/expense 3,628 4,878 10,618 12,237
Payments for drydocking
costs 528 - 528 -
Amortization of
financing costs (152) (78) (507) (261)
EBITDA 14,774 14,850 40,106 36,449
(1) EBITDA represents 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 US
GAAP and our calculation of EBITDA may not be comparable to that reported
by other companies. EBITDA is included here because it is a basis upon
which we assess our liquidity position because we believe it presents
useful information to investors regarding our ability to service and/or
incur indebtedness.
About Omega Navigation Enterprises, Inc.
Omega Navigation Enterprises, Inc. is an international provider of global
marine transportation services through the ownership and operation of
double hull product tankers. The current fleet includes eight double hull
product tankers with a carrying capacity of 512,358 dwt which are chartered
out under three-year time charters with an average age of less than three
years. The company has also announced the signing of shipbuilding contracts
to construct and acquire five additional product tankers with a capacity of
37,000 dwt each scheduled for delivery between March 2010 and early in 2011
and two additional product tankers with a capacity of 47,000 dwt the first
scheduled for delivery on the second quarter 2009 and the second scheduled
for delivery on the third quarter 2010. With the addition of these seven
vessels, Omega's fleet will expand to 15 product tankers with a total
deadweight capacity of 791,358 dwt.
The Company was incorporated in the Marshall Islands in February 2005. Its
principal executive offices are located in Piraeus, Greece and it also
maintains an office in the United States.
Omega Navigation's Class A Common Shares are traded on the NASDAQ National
Market under the symbol "ONAV" and are also listed on the Singapore
Exchange Securities Trading Limited under the symbol "ONAV 50."
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides
safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their
business. Forward-looking statements 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 Company desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The
words "believe," "anticipate," "intends," "estimate," "forecast,"
"project," "plan," "potential," "will," "may," "should," "expect" "pending"
and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, the Company's management's examination of
historical operating trends, data contained in the Company's 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 the Company's control,
the Company cannot assure you that the Company will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors other important factors that, in the
Company's 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 fluctuations
in charter rates and vessel values, changes in demand for product tanker
and dry bulk shipping capacity, changes in the Company's operating
expenses, including bunker prices, drydocking and insurance costs, the
market for the Company's vessels, availability of financing and
refinancing, changes in governmental rules and regulations or actions taken
by regulatory authorities, potential liability from pending or future
litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political
events, vessels breakdowns and instances of off-hires and other factors.
Please see the Company's filings with the Securities and Exchange
Commission for a more complete discussion of these and other risks and
uncertainties.
Contact Information: Contacts: Company Contact: Gregory A. McGrath Chief Financial Officer Omega Navigation Enterprises, Inc. PO Box 272 Convent Station, NJ 07961 Tel. (551) 580-0532 E-mail: gmcgrath@omeganavigation.com www.omeganavigation.com Investor Relations / Financial Media: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: nbornozis@capitallink.com www.capitallink.com