SOURCE: Safe Bulkers, Inc.

Safe Bulkers, Inc.

February 09, 2011 16:05 ET

Safe Bulkers, Inc. Reports Fourth Quarter and Full Year 2010 Results and Declares Quarterly Dividend

ATHENS, GREECE--(Marketwire - February 9, 2011) - Safe Bulkers, Inc. (the "Company") (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the fourth quarter and the year ended December 31, 2010. The Company also declared a quarterly dividend of $0.15 per share for the fourth quarter of 2010.

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