Summary of Fourth Quarter 2010 Results -- Net revenue for the fourth quarter of 2010 increased by 13% to $41.3 million from $36.6 million during the same period in 2009. -- Net income for the fourth quarter of 2010 increased by 34% to $31.1 million from $23.2 million during the same period in 2009. -- EBITDA(1) for the fourth quarter of 2010 increased by 33% to $37.9 million from $28.4 million during the same period in 2009. -- Earnings per share for the fourth quarter of 2010 of $0.47, calculated on a weighted average number of shares of 65,878,212, compared to $0.42 in the fourth quarter 2009, calculated on a weighted average number of shares of 54,513,787. -- Declaration of a dividend of $0.15 per share for the fourth quarter of 2010. Summary of Twelve Months Ended December 31, 2010 Results -- Net revenue for the twelve months ended December 31, 2010 decreased by 5% to $157.0 million from $164.6 million during the same period in 2009. -- Net income for the twelve months ended December 31, 2010 decreased by 34% to $109.6 million from $165.4 million during the same period in 2009. -- EBITDA for the twelve months ended December 31, 2010 decreased by 29% to $133.4 million from $187.6 million during the same period in 2009. -- Earnings per share for the twelve months ended December 31, 2010 of $1.73, calculated on a weighted average number of shares of 63,300,466 compared to $3.03 in the twelve months ended December 31, 2009, calculated on a weighted average number of shares of 54,510,587.(1) EBITDA represents net income plus interest expense, tax, depreciation and amortization. See "EBITDA Reconciliation". Fleet and Employment Profile The Company's operational fleet as of December 31, 2010, was comprised of 16 drybulk vessels with an average age of 3.80 years. As of December 31, 2010, the Company has contracted for eight additional drybulk newbuild vessels with deliveries scheduled at various times through 2013. The newbuilds consist of two Post-Panamax, three Kamsarmax, one Panamax and two Capesize vessels. As of December 31, 2010, the remaining capital expenditure requirements for the delivery of the eight newbuilds, were $171.1 million for 2011, $70.4 million for 2012 and $22.2 for 2013. We anticipate satisfying these capital expenditure requirements from existing cash and time deposits, operating cash surplus and existing undrawn loan commitments. On January 11, 2011, we contracted to acquire a Japanese-built, drybulk, Panamax-class newbuild at approximately $41.8 million, consisting of payments of $18.9 million and JPY 1.9 billion, with an expected delivery date in the first quarter of 2012. As of January 31, 2011, the company has 1 existing and 8 newbuild vessels unencumbered and a $50 million long-term floating rate note facility against which additional loans can be drawn. As of January 31, 2011, the contracted employment of the Company's fleet was 78% of fleet ownership days for the remaining days of 2011, 59% for 2012 and 54% for 2013, including vessels which are scheduled to be delivered to us in the future. Dividend Declaration The Company declared a cash dividend on its common stock of $0.15 per share payable on or about February 25, 2011 to shareholders of record at the close of trading of the Company's common stock on the New York Stock Exchange (the "NYSE") on February 18, 2011. The Company had 65,879,916 shares of common stock issued and outstanding as of today. The Board of Directors of the Company is continuing a policy of paying out a portion of the Company's free cash flow at a level it considers prudent in light of the current economic and financial environment. The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. The timing and amount of any dividends declared will depend on, among other things: (i) our earnings, financial condition and cash requirements and availability, (ii) decisions in relation to our growth strategies, (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends, (iv) restrictive covenants in our existing and future debt instruments and (v) global financial conditions. We can give no assurance that dividends will be paid in the future. Management Commentary Dr. Loukas Barmparis, President of the Company, said: "We are happy to announce today our unaudited financial results for the quarter and year ended December 31, 2010. Our revenues increased for the second consecutive quarter, supported by long term charters with our clients. Our Board has maintained a stable dividend policy by paying out a low percentage of free cash flows and declaring our eleventh consecutive quarterly dividend, of $0.15 per share, since our initial public offering in 2008. Our selective fleet expansion at attractive prices, funded to a large extent from operational surplus, will support our future revenues as newbuilds enter our fleet. We remain committed to the solid growth of our company, through flexible asset management and consistent chartering policy, for the benefit of our shareholders.'' Conference Call On Thursday, February 10, 2011 at 9:00 A.M. EST, the Company's management team will host a conference call to discuss the financial 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), 0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Safe Bulkers" to the operator. A telephonic replay of the conference call will be available until February 18, 2011 by dialing 1 (866) 247-4222 (US Toll Free Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard International Dial In). Access Code: 1859591# Slides and Audio Webcast There will also be a live, and then archived, webcast of the conference call, available through the Company's website (www.safebulkers.com). Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. Management Discussion of Fourth Quarter 2010 Results Net income increased by 34% to $31.1 million for the fourth quarter of 2010 from $23.2 million for the fourth quarter of 2009. This increase is mainly attributable to the following factors: Net revenues: Net revenues were $41.3 million for the fourth quarter of 2010, a 13% increase compared to $36.6 million for the fourth quarter of 2009. Net revenues increased due to increases in the number of operating days and the Time Charter Equivalent ("TCE")(2) rate. The Company operated 15.3 vessels on average during the fourth quarter of 2010, earning a TCE rate of $29,395, compared to 14.0 vessels and a TCE rate of $28,605 during the fourth quarter of 2009. The increase in the TCE rate resulted mainly from higher time charter rates. Vessel operating expenses: Vessel operating expenses increased by 21% to $6.3 million for the fourth quarter of 2010, compared to $5.2 million for the same period in 2009. The increase in operating expenses is mainly attributed to an increase in ownership days of 9% to 1,409 in the fourth quarter of 2010 from 1,288 in the fourth quarter of 2009 and to a further increase in crew, repairs, maintenance, spare parts and stores costs associated with the delivery of our latest newbuild vessel Venus Heritage. Daily vessel operating expenses increased by 10% to $4,463 for the fourth quarter of 2010, compared to $4,053 for the fourth quarter of 2009. (Loss)/Gain on derivatives: Gain on derivatives increased to $4.9 million in the fourth quarter of 2010, compared to a loss of $1.2 million for the same period in 2009, as a result of the mark-to-market valuation of the Company's interest rate swap transactions that we employ to manage the risk and interest rate exposure of our loan and credit facilities. These swaps economically hedged the interest rate exposure of the Company's aggregate loans outstanding. The average remaining period of our swap contracts is 3.2 years as of December 31, 2010. The valuation of these interest rate swap transactions at the end of each quarter is affected by the prevailing interest rates at that time. Depreciation: Depreciation increased to $5.4 million in the fourth quarter of 2010, compared to $3.9 million for the same period in 2009, as a result of the increase in the average number of vessels operated by the Company during the fourth quarter of 2010. Cash, time deposits & restricted cash: As of December 31, 2010, we had $100.4 million in cash and short-term time deposits, $5.4 million in long-term restricted cash and $50.0 million in a long-term floating rate note, from which the Company may borrow up to 80% under certain conditions. Additionally, we have $82.7 million in an undrawn loan commitments, $24.0 million to be secured by our existing vessel Panayiota K and $58.7 million to be secured by our newbuild with Hull number 1074 expected to be delivered by the third quarter of 2011, whilst our recently delivered post-panamax newbuild vessel Venus Heritage remains debt free. (2) Refer to definition of "TCE" in Note 6 of Fleet Data Table. Management Discussion of the Twelve months ended December 31, 2010 Results Net revenues: Net revenues for the twelve months ended December 31, 2010 decreased by 5% to $157.0 million from $164.6 million during the same period in 2009. The Company operated 14.6 vessels on average during the twelve months of 2010, earning a TCE rate of $29,534, compared to 13.2 vessels and a TCE rate of $34,208 during the twelve months of 2009. Net income: Net income for the twelve months ended December 31, 2010 was $109.6 million, a decrease of 34% from net income of $165.4 million for the twelve months ended December 31, 2009. The decrease of $55.8 million is mainly attributed to: (i) early redelivery income of $0.1 million, compared to $75.0 million, (ii) zero loss on asset cancellations, compared to $20.7 million, (iii) gain on sale of assets of $15.2 million, compared to none, (iv) a loss on derivatives of $8.2 million, compared to a loss on derivatives of $4.4 million, (v) depreciation of $19.7 million, compared to $13.9 million, (vi) interest expense of $6.4 million, compared to $10.3 million, (vii) vessel operating expenses of $23.1 million, compared to $19.6 million, and (viii) net revenues of $157.0 million, compared to $164.6 million, during the twelve months of 2010 and 2009 respectively.
Unaudited Interim Financial Information and Other Data
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE PERIODS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2010
Three Month Period Twelve Month Period
(In thousands of U.S. Ended December 31, Ended December 31,
Dollars except for share ---------------------- ----------------------
and per share data) 2009 2010 2009 2010
---------- ---------- ---------- ----------
REVENUES:
Revenues 37,435 41,908 168,400 159,698
Commissions (867) (621) (3,794) (2,678)
Net revenues 36,568 41,287 164,606 157,020
EXPENSES:
Voyage expenses (97) (134) (577) (610)
Vessel operating expenses (5,220) (6,289) (19,628) (23,128)
Depreciation (3,941) (5,421) (13,893) (19,673)
General and administrative
expenses (1,544) (2,011) (7,046) (7,018)
Early redelivery income - - 74,951 132
Loss on asset
cancellations - - (20,699) -
Gain on sale of assets - - - 15,199
Operating income 25,766 27,432 177,714 121,922
OTHER (EXPENSE) / INCOME:
Interest expense (1,523) (1,652) (10,342) (6,423)
Other finance costs (51) (147) (442) (331)
Interest income 298 380 2,164 2,627
(Loss)/gain on derivatives (1,241) 4,882 (4,416) (8,163)
Foreign currency (loss)/gain (65) 287 838 281
Amortization and write-off of
deferred finance charges (20) (50) (106) (266)
Net income 23,164 31,132 165,410 109,647
Earnings per share 0.42 0.47 3.03 1.73
Weighted average number of
shares 54,513,787 65,878,212 54,510,587 63,300,466
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF DECEMBER 31, 2009 AND DECEMBER 31, 2010
December 31, December 31,
(In thousands of U.S. Dollars) 2009 2010
------------ ------------
ASSETS
Cash, time deposits, and restricted cash 82,714 100,415
Asset held for sale 16,969 -
Other current assets 5,965 3,861
Vessels, net 373,924 541,244
Advances for vessel acquisition and vessels
under construction 93,520 99,014
Other fixed assets, net 69 -
Restricted cash non-current 4,763 5,423
Long-term investment 50,000 50,000
Other non-current assets 800 5,415
Total assets 628,724 805,372
LIABILITIES AND EQUITY
Current portion of long-term debt & liability
directly associated with asset held for sale 50,242 27,674
Other current liabilities 15,309 25,309
Long-term debt, net of current portion 420,994 467,070
Other non-current liabilities 44,960 41,186
Shareholders' equity 97,219 244,133
Total liabilities and equity 628,724 805,372
Fleet Data
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2010 2009 2010
-------- -------- -------- --------
Number of vessels at period's end 14 16 14 16
Average age of fleet (in years) at
period's end 3.80 3.80 3.80 3.80
Ownership days (1) 1,288 1,409 4,817 5,326
Available days (2) 1,275 1,400 4,795 5,296
Operating days (3) 1,273 1,398 4,778 5,269
Fleet utilization (4) 98.8% 99.2% 99.2% 98.9%
Average number of vessels in the
period (5) 14.00 15.32 13.20 14.59
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 28,605 $ 29,395 $ 34,208 $ 29,534
Daily vessel operating expenses (7) $ 4,053 $ 4,463 $ 4,075 $ 4,342
(1) Ownership days represent the aggregate number of days in a period
during which each vessel in our fleet has been owned by us.
(2) Available days represent the total number of days in a period during
which each vessel in our fleet was in our possession net of off-hire
days associated with scheduled maintenance, which includes major
repairs, drydockings, vessel upgrades or special or intermediate
surveys.
(3) Operating days represent the number of our available days in a
period less the aggregate number of days that our vessels are
off-hire due to any reason, excluding scheduled maintenance.
(4) Fleet utilization is calculated by dividing the number of our
operating days during a period by the number of our ownership days
during that period.
(5) Average number of vessels in the period is calculated by dividing
ownership days in the period by the number of days in the period.
(6) Time charter equivalent rates, or TCE rates, represent our charter
revenues less commissions and voyage expenses during a period
divided by the number of our available days during the period.
(7) Daily vessel operating expenses include the costs for crewing,
insurance, lubricants, spare parts, provisions, stores, repairs,
maintenance, statutory and classification expense, drydocking,
intermediate and special surveys and other miscellaneous items.
Daily vessel operating expenses are calculated by dividing vessel
operating expenses by ownership days for the relevant period.
EBITDA RECONCILIATION
(In thousands of U.S. Dollars)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2010 2009 2010
Net Income 23,164 31,132 165,410 109,647
Plus Net Interest Expense 1,225 1,272 8,178 3,796
Plus Depreciation 3,941 5,421 13,893 19,673
Plus Amortization 20 50 106 266
EBITDA 28,350 37,875 187,587 133,382
EBITDA represents net income before interest, income tax expense,
depreciation and amortization. EBITDA is not a recognized measurement under
US GAAP. EBITDA assists the Company's management and investors by
increasing the comparability of the Company's fundamental performance from
period to period and against the fundamental performance of other companies
in the Company's industry that provide EBITDA information. The Company
believes that EBITDA is useful in evaluating the Company's operating
performance compared to that of other companies in the Company's industry
because the calculation of EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects of capital expenditures
and acquisitions, items which may vary for different companies for reasons
unrelated to overall operating performance.
EBITDA has limitations as an analytical tool, and should not be considered
in isolation, or as a substitute for analysis of the Company's results as
reported under US GAAP. EBITDA should not be considered a substitute for
net income and other operations data prepared in accordance with US GAAP or
as a measure of profitability. While EBITDA is frequently used as a measure
of operating results and performance, it is not necessarily comparable to
other similarly titled captions of other companies due to differences in
methods of calculation.
Existing Fleet Employment Profile as of January 31, 2010
Set out below is a table showing our existing vessels and their contracted
employment.
Year Charter Rate
Vessel Name DWT Built (a) USD/day Charter Duration (b)
------- ----- ------------ ----------------------
17,750 Sep 2010 - Apr 2011
MV Maria 76,000 2003 20,250 Apr 2011 - Apr 2014
------- ----- ------------ ----------------------
MV Vassos 76,000 2004 29,000 Nov 2008 - Oct 2013
------- ----- ------------ ----------------------
MV Katerina 76,000 2004 20,000 Jan 2011 - Jan 2014
------- ----- ------------ ----------------------
MV Maritsa 76,000 2005 28,000 (c) Mar 2010 - Mar 2015
------- ----- ------------ ----------------------
MV Pedhoulas Merchant 82,300 2006 27,250 Apr 2010 - Apr 2011
------- ----- ------------ ----------------------
MV Pedhoulas Trader 82,300 2006 41,500 (d) Aug 2008 - Jul 2013
------- ----- ------------ ----------------------
18,750 Dec 2010 - Mar 2011
MV Pedhoulas Leader 82,300 2007 18,350 (g) Aug 2011 - Aug 2013
------- ----- ------------ ----------------------
MV Stalo 87,000 2006 34,160 Mar 2010 - Feb 2015
------- ----- ------------ ----------------------
MV Marina 87,000 2006 41,500 (e) Dec 2008 - Mar 2009
------- ----- ------------ ----------------------
MV Sophia 87,000 2007 34,720 Oct 2008 - Sep 2013
------- ----- ------------ ----------------------
MV Eleni 87,000 2008 41,640 (f) Nov 2008 - Mar 2015
------- ----- ------------ ----------------------
MV Martine 87,000 2009 40,500 Feb 2009 - Feb 2014
------- ----- ------------ ----------------------
MV Andreas K 92,000 2009 22,000 Feb 2011 - Nov 2011
------- ----- ------------ ----------------------
MV Panayiota K 92,000 2010 22,750 Apr 2010 - Apr 2011
------- ----- ------------ ----------------------
31,000 Sep 2010 - Sep 2011
M/V Kanaris 178,100 2010 25,928 Sep 2011 - Jun 2031
------- ----- ------------ ----------------------
M/V Venus Heritage 95,800 2010 22,000 Dec 2010 - Apr 2011
------- ----- ------------ ----------------------
(a) Either gross charter rate or average gross charter rate for charter
parties with variable rates among periods or for consecutive
charter parties with the same charterer under similar basic terms.
(b) Delivery/redelivery dates reflect the Company's best estimates, but
actual delivery/redelivery dates can differ pursuant to the terms
of the relevant charter contract.
(c) Five-year variable rate contract, first and second years at
$32,000, third year at $28,000, fourth and fifth years at $24,000
(d) Five-year variable rate contract, first year at $69,000, second
year at $56,500, fourth year at $42,000, fourth and fifth years at
$20,000.
(e) Five-year variable rate contract, $61,500 from Dec. 2008 to
Mar. 2009, $57,500 from Apr. 2009 to Dec. 2009, $52,500 from
Dec. 2009 to Dec. 2010, $42,500 from Dec. 2010 to Dec. 2011,
$32,500 from Dec. 2011 to Oct. 2012, $31,500 from Oct. 2012 to Dec.
2012 and $21,500 from Dec. 2012 to Dec. 2013.
(f) Three contracts in direct continuation, the first from Nov. 2008 to
Oct. 2009 at $70,000, the second from Oct. 2009 to Mar. 2010 at
$66,400 and the fourth from Apr. 2010 to Apr. 2015 at $34,160.
(g) Charter agreement which provides us with choice of deploying either
Pedhoulas Merchant or Pedhoulas Leader.
The contracted charter coverage including newbuilds, based on the Company's
best estimates as of January 31, 2011 is:
2011 78%
2012 59%
2013 54%
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk transportation
services, transporting bulk cargoes, particularly coal, grain and iron ore,
along worldwide shipping routes for some of the world's largest users of
marine drybulk transportation services. The Company's common stock is
listed on the NYSE, where it trades under the symbol "SB". The Company's
current fleet consists of 16 drybulk vessels, all built post-2003, and the
Company has contracted to acquire nine additional drybulk newbuild vessels
to be delivered at various times through 2013.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in
Section 27A of the Securities Exchange Act of 1933, as amended, and in
Section 21E of the Securities Act of 1934, as amended) concerning future
events, the Company's growth strategy and measures to implement such
strategy, including expected vessel acquisitions and entering into further
time charters. Words such as "expects," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates" and variations of such words and
similar expressions are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. These statements involve
known and unknown risks and are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. Actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to, changes in the demand
for drybulk vessels, competitive factors in the market in which the Company
operates, risks associated with operations outside the United States and
other factors listed from time to time in the Company's filings with the
Securities and Exchange Commission. The Company expressly disclaims any
obligations or undertaking to release publicly any updates or revisions to
any forward-looking statements contained herein to reflect any change in
the Company's expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based.
Contact Information: For further information please contact: Company Contact: Dr. Loukas Barmparis President Safe Bulkers, Inc. Athens, Greece Tel.: +30 (210) 899-4980 Fax: +30 (210) 895-4159 E-Mail: directors@safebulkers.com Investor Relations / Media Contact: Ramnique Grewal Vice President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (212) 661-7566 Fax: (212) 661-7526 E-Mail: safebulkers@capitallink.com