Fleet Profile (As of May 17, 2010)
Vessel Name Type DWT Year Built
--------- --------- ---------
Star Beta (1) Capesize 174,691 1993
Star Sigma Capesize 184,403 1991
Star Ypsilon Capesize 150,940 1991
Star Gamma Supramax 53,098 2002
Star Delta Supramax 52,434 2000
Star Epsilon Supramax 52,402 2001
Star Zeta Supramax 52,994 2003
Star Theta Supramax 52,425 2003
Star Kappa Supramax 52,055 2001
Star Omicron Supramax 53,489 2005
Star Cosmo Supramax 52,247 2005
Total 11 931,178
Vessel to be acquired
Star Aurora (2) Capesize 171,199 2000
Newbuildings
Delivery
Vessel Name Type DWT Date
--------- --------- ---------
Star Bulk TBN (3) Capesize 180,000 Sept-2011
Star Bulk TBN (3) Capesize 180,000 Nov-2011
(1) On January 18, 2010 the Company entered into an agreement to sell the
vessel Star Beta to a third party for a contracted sale price of $22.0
million and expects to deliver the vessel to the buyers in the second
quarter of 2010.
(2) On February 18, 2010 the Company entered into a definitive agreement to
purchase a Capesize vessel of approximately 171,000 dwt, built in 2000 in
Japan, for $42.5 million from a third party with expected delivery in the
fourth quarter 2010. The Company intends to finance this vessel through a
combination of company cash and bank debt. The Company also entered into a
time charter agreement with Rio Tinto for the vessel for a period of about
3 years at a gross daily rate of $27,500.
(3) On March 24 and April 6, 2010 the Company signed two contracts with the
shipbuilder Hanjin to build two Capesize vessels at a price of $106.9
million in aggregate with expected delivery in September and November 2011,
respectively. The Company intends to finance both newbuildings through a
combination of company cash and bank debt.
First Quarter 2010 and 2009 Results
For the quarter ended March 31, 2010, total revenues amounted to $29.3
million compared to $45.1 million for the quarter
ended March 31, 2009. This was mainly due to lower charter rates imposed by
the market for most of our vessels and the decreased amortization of fair
value of below market acquired time charters amounting to $0.3 million for
the three-month period ended March 31, 2010 compared to $6.4 million for
the three-month period ended March 31, 2009. Operating loss amounted to
$31.5 million for the quarter ended March 31, 2010 compared to operating
income of $25.2 million for the quarter ended March 31, 2009. Net loss for
the first quarter of 2010 amounted to $33.0 million or $0.54 loss per share
calculated on 61,049,760 weighted average number of shares, basic and
diluted. Net income for the first quarter of 2009 amounting to $22.5
million or $0.37 per basic and diluted shares calculated on 60,390,219
weighted average numbers of shares.
The first quarter of 2010 net loss figure includes the following non-cash
items:
-- Impairment loss of $33.7 million or $0.55 per basic and diluted
share, in connection with the sale of the vessel Star Beta, which
has been classified as an asset held for sale in current assets and
recorded at fair value less cost to sell.
-- Net revenue of $0.3 million or $0.01 per basic and diluted share,
representing amortization of fair value of below market acquired
time charters, attached to vessels acquired, over the remaining
period of the time charter into revenue.
-- Expenses of $0.8 million, or $0.01 per basic and diluted share
relating to the amortization of stock based compensation recognized
in connection with the 1,150,600 unvested restricted shares issued
to directors and employees.
-- An unrealized loss of $0.3 million or $0.01 per basic and diluted
share associated with the mark-to-market valuation of the Company's
derivatives.
The first quarter of 2009 net income figure includes the following non-cash
items:
-- Net revenue of $6.4 million, or $0.11 per basic and diluted share,
representing amortization of fair value of below/above market
acquired time charters, attached to vessels acquired, over the
remaining period of the time charter into revenue.
-- A gain of $10.9 million or $0.18 per basic and diluted share
associated with the gain on the time charter agreement termination
which mainly relates to the unamortized fair value of below market
acquired time charter on a vessel early redelivery date.
-- Expenses of $1.5 million, or $0.02 per basic and diluted share
relating to the amortization of stock based compensation recognized
in connection with the 1,385,000 unvested restricted shares issued
to directors and employees.
-- An unrealized loss of $2.8 million or $0.05 per basic and diluted
share associated with the mark-to-market valuation of the Company's
derivatives.
Adjusted EBITDA for the first quarter of 2010 and 2009 excluding the above
items was $14.6 million and $27.8 million, respectively. A reconciliation
of EBITDA and adjusted EBITDA to net cash provided by cash flows from
operating activities is set forth below.
An average of 11.0 and 12.0 vessels were owned and operated during the
first quarter of 2010 and 2009, respectively, earning an average Time
Charter Equivalent ("TCE") rate per day of $25,919 and per day $35,158,
respectively. We refer you to the information under the heading "Summary
of Selected Data" later in this earnings release for further information
regarding our calculation of TCE rates.
Expenses, excluding the impairment loss from the sale of vessel Star Beta
in the first quarter of 2010 and the loss on time charter agreement
termination in the first quarter of 2009, decreased approximately 13% to
$27.1 million for the three-month period ended March 31, 2010 compared to
$31.1 million for the three-month period ended March 31, 2009. Vessel
operating expenses also decreased approximately 16% to $5.6 million for the
first quarter of 2010 compared to $6.7 million for the same period last
year. The decreases are mainly due to a more cost efficient in-house
management which was fully implemented during the first quarter of 2010.
Voyage expenses consist of hire paid for chartered-in vessels, port, canal
and fuel costs. There was a $1.6 million increase in voyage expenses in the
first quarter of 2010 as compared to the same period of 2009. The increase
is mainly due to the fact that on November 6, 2009 we chartered-in a third
party vessel to serve a shipment under a COA. During the first quarter of
2010 the vessel was chartered-in for 32 days.
Depreciation expenses decreased to $11.6 million for the first quarter of
2010 from $15.7 million for the first quarter of 2009. The decrease in
depreciation expense was due to the fact that our fleet was reduced from an
average of 12 vessels during the first quarter of 2009, to an average of 11
during the first quarter of 2010. Furthermore, depreciation expense was
further reduced due to the reclassification of the vessel Star Beta during
the first quarter of 2010 as an asset held for sale.
General and administrative expenses decreased to $2.4 million for the
quarter ended March 31, 2010 from $2.9 million for the quarter ended March
31, 2009, respectively. This 15% decrease is mainly due to lower
stock-based compensation expense.
Liquidity and Capital Resources
Cash Flows
Net cash provided by operating activities for the quarters ended March 31,
2010 and 2009, was $13.1 million and $24.6 million, respectively. Net cash
provided by operating activities for the quarter ended March 31, 2010 was
primarily a result of recorded net loss of $33.0 million, adjusted for
depreciation of $11.6 million, and an impairment loss of $33.7 million
resulting from the sale of vessel Star Beta which has been classified as
asset held for sale and recorded at fair value less costs to sell. Net cash
provided by operating activities for the quarter ended March 31, 2009 was
primarily a result of recorded net income of $22.5 million, mainly adjusted
for depreciation of $15.7 million and offset by amortization of fair value
of below/above market acquired time charter agreements of $6.4 million and
non-cash gain on time charter agreement termination of $10.9 million.
Net cash used in investing activities for the quarters ended March 31, 2010
and 2009 was $5.9 million and $20.0 million, respectively. Net cash used
in investing activities for the quarter ended March 31, 2010, was primarily
due to the 20% advance given for the vessel Star Aurora that is to be
acquired during the fourth quarter of 2010, amounting to $8.5 million,
offset by a decrease in restricted cash amounting to $2.6 million. For the
quarter ended March 31, 2009 there was no cash used in investing activities
due to the lack of acquisitions and/or sales of vessels during the period,
although, there was an increase in restricted cash of $20.0 million which
related to the waivers obtained for the existing loan agreements.
Net cash used in financing activities for the quarters ended March 31, 2010
and 2009 was $19.5 million and $10.1 million respectively. For the quarter
ended March 31, 2010, net cash used in financing activities consisted of
loan installment payments amounting to $16.3 million, cash dividend
payments of $3.1 million and financing fees amounting $0.2 million. For the
quarter ended March 31, 2009 net cash used in financing activities
consisted of the payments of loan installments amounting to $12.0 million
offset by cash provided from the Director's reinvesting their dividend of
$1.9 million.
Summary of Selected Data
(TCE rates expressed in U.S. dollars)
Quarter ended Quarter ended
March 31, March 31,
2009 2010
------------ ------------
Average number of vessels(1) 12.0 11.0
------------ ------------
Number of vessels (as of the last day of the
periods reported) 12 11
------------ ------------
Average age of operational fleet (in years) (2) 9.9 10.4
------------ ------------
Ownership days (3) 1,080 990
------------ ------------
Available days (4) 1,056 969
------------ ------------
Voyage days for fleet (5) 1,037 967
------------ ------------
Fleet utilization (6) 98.0% 99.7%
------------ ------------
Average per-day TCE rate (7) $ 35,158 25,919
------------ ------------
(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) Average age of operational fleet is calculated as at March 31, 2009 and
2010, respectively.
(3) Ownership days are the total calendar days each vessel in the fleet was
owned by Star Bulk for the relevant period.
(4) Available days for the fleet are the ownership days after subtracting
for off-hire days with major repairs, dry-docking or special or
intermediate surveys or transfer of ownership.
(5) Voyage days are the total days the vessels were in our possession for
the relevant period after subtracting all off-hire days incurred for any
reason (including off-hire for dry-docking, major repairs, special or
intermediate surveys).
(6) Fleet utilization is calculated by dividing voyage days by available
days for the relevant period and takes into account the dry-docking
periods.
(7) Represents the weighted average per-day TCE rates, of our entire fleet.
TCE rate is a measure of the average daily revenue performance of a vessel
on a per voyage basis. Our method of calculating TCE rate is determined by
dividing voyage revenues (net of voyage expenses and amortization of fair
value of above/below market acquired time charter agreements) 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 rate 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. We included TCE revenues, a non-GAAP
measure, as it provides additional meaningful information in conjunction
with voyage revenues, the most directly comparable GAAP measure, because it
assists our management in making decisions regarding the deployment and use
of its vessels and in evaluating their financial performance. TCE rate is
also included herein because it 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 and because we believe that it presents
useful information to investors.
Unaudited Consolidated Condensed Statement of Operations
Quarter Quarter
ended ended
(Expressed in thousands of U.S. dollars except for March 31, March 31,
share and per share data) 2009 2010
---------- ----------
Revenues: 45,115 29,279
Expenses:
Voyage expenses (2,306) (3,892)
Vessel operating expenses (6,721) (5,622)
Drydocking expenses (262) (1,072)
Depreciation (15,661) (11,580)
Management fees (285) (41)
Loss on derivative instruments (3,023) (2,415)
General and administrative expenses (2,863) (2,439)
---------- ----------
(31,121) (27,061)
Vessel impairment loss - (33,732)
Gain on time charter agreement termination 11,179 -
---------- ----------
Operating income /(loss) 25,173 (31,514)
---------- ----------
Interest and finance costs (2,742) (1,662)
Interest income 23 159
---------- ----------
Total other expenses, net (2,719) (1,503)
---------- ----------
---------- ----------
Net income / (loss) 22,454 (33,017)
========== ==========
Earnings/ (loss) per share, basic and diluted 0.37 (0.54)
---------- ----------
Weighted average number of shares outstanding,
basic and dilutive 60,390,219 61,049,760
---------- ----------
Unaudited Consolidated Condensed Balance Sheets
(Expressed in thousands of U.S. dollars)
December 31, March 31,
ASSETS 2009 2010
------------ ------------
Cash and restricted cash 48,495 34,706
Vessel held for sale - 21,270
Other current assets 12,333 12,914
------------ ------------
TOTAL CURRENT ASSETS 60,828 68,890
Fixed assets, net 668,698 610,651
Restricted cash 29,920 26,020
Other non-current assets 1,195 1,274
------------ ------------
TOTAL ASSETS 760,641 706,835
============ ============
Current portion of long-term debt 59,675 51,400
Other current liabilities 11,417 9,930
------------ ------------
TOTAL CURRENT LIABILITIES 71,092 61,330
Long-term debt 187,575 179,550
Other non-current liabilities 2,717 1,988
------------ ------------
TOTAL LIABILITIES 261,384 242,868
STOCKHOLDERS' EQUITY 499,257 463,967
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 760,641 706,835
============ ============
Unaudited Cash Flow Data
Quarter Quarter
ended March ended March
(Expressed in thousands of U.S. dollars) 31, 2009 31, 2010
----------- -----------
Net cash provided by operating activities 24,551 13,135
Net cash (used in) investing activities (20,004) (5,934)
Net cash (used in) financing activities (10,114) (19,535)
EBITDA and adjusted EBITDA Reconciliation
Star Bulk considers EBITDA to represent net income before interest, income
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, ("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 the Company's ability to service
and/or incur indebtedness.
The Company excluded amortization of the fair value of above/below market
acquired time charters associated with time charters attached to vessels
acquired, vessel impairment loss, non-cash gain or loss related to early
time charter termination and stock-based compensation expense recognized
during the period, to derive adjusted EBITDA. The Company excluded the
above non-cash items to derive adjusted EBITDA because the Company believes
that these non-cash items do not reflect the operational cash inflows and
outflows of the Company's fleet.
The following table reconciles net cash provided by operating activities to
EBITDA and adjusted EBITDA:
Quarter Quarter
ended March ended March
(Expressed in thousands of U.S. dollars) 31, 2009 31, 2010
----------- -----------
Net cash provided by operating activities 24,551 13,135
Net increase/(decrease) in current assets 2,888 (1,907)
Net (increase)/decrease in operating
liabilities, excluding current portion of long
term debt (2,311) 1,936
Amortization of fair value of above/below market
acquired time charter agreements 6,364 335
Vessel impairment loss - (33,732)
Other non cash charges (6)
Amortization of deferred finance charges (56) (86)
Stock - based compensation (1,452) (782)
Change in fair value of derivatives (2,788) (330)
Non-cash gain on time charter agreement
termination 10,919 -
Net Interest expense 2,719 1,503
----------- -----------
EBITDA 40,834 (19,934)
=========== ===========
Less:
Amortization of fair value of above/below market
acquired time charter agreements (6,364) (335)
Non-cash gain on time charter agreement
termination (10,919) -
Plus:
Stock - based compensation 1,452 782
Vessel impairment loss - 33,732
Change in fair value of derivatives 2,788 330
----------- -----------
Adjusted EBITDA 27,791 14,575
=========== ===========
Conference Call details:
Star Bulk's management team will host a conference call to discuss the
Company's financial results tomorrow, Thursday, May 20, 2010, at 9:30 a.m.,
Eastern Daylight Time (EDT).
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329
(from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote
"Star Bulk."
A replay of the conference call will be available until May 27, 2010. The
United States replay number is 1(866) 247-4222; from the UK 0(800)
953-1533; the standard international replay number is (+44) (0) 1452 550
000 and the access code required for the replay is: 3128607#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the Star Bulk website (www.starbulk.com). Participants to the live webcast
should register on the website approximately 10 minutes prior to the start
of the webcast.
About Star Bulk
Star Bulk is a global shipping company providing worldwide seaborne
transportation solutions in the dry bulk sector. Star Bulk's vessels
transport major bulks, which include iron ore, coal and grain and minor
bulks such as bauxite, fertilizers and steel products. Star Bulk was
incorporated in the Marshall Islands on December 13, 2006 and maintains
executive offices in Athens, Greece. Its common stock trades on the Nasdaq
Global Market under the symbol "SBLK". Currently, Star Bulk has an
operating fleet of eleven dry bulk carriers with definitive agreements to
buy one and sell one Capesize vessel as well as to build two Capesize
vessels. The total fleet consists of six Capesize, and eight Supramax dry
bulk vessels with a combined cargo carrying capacity of 1,462,377
deadweight tons. The average age of our current operating fleet is 10.4
years.
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," "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, examination by the Company's management of
historical operating trends, data contained in its 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 it 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 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 our filings with
the Securities and Exchange Commission for a more complete discussion of
these and other risks and uncertainties. The information set forth herein
speaks only as of the date hereof, and the Company disclaims any intention
or obligation to update any forward-looking statements as a result of
developments occurring after the date of this communication.
Contact Information: Contacts : Company: George Syllantavos CFO Star Bulk Carriers Corp. c/o Star Bulk Management Inc. 7 Fragoklisias Str. Maroussi 15125 Athens, Greece www.starbulk.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: starbulk@capitallink.com www.capitallink.com