-- A net loss of $35.9 million or $1.20 per share. The results of the
fourth quarter of 2009 include an impairment charge of $36.6 million
relating to the write-down of the older two of the Company's tanker
vessels to their fair market values. Excluding the impairment charge,
the net loss would have amounted to net income of $0.7 million, or
$0.02 per share.
-- An operating loss of $31.7 million. Excluding the impairment charge of
$36.6 million operating loss would have amounted to operating income of
$4.9 million
-- Revenues of $24.4 million.
For the year ended December 31, 2009, the Company reported:
-- A net loss of $50.2 million, or $1.78 per share. Excluding net
expenses of $12.2 million, relating to the termination of leases and
the impairment charge of $36.6 million, the net loss would have
amounted to $1.4 million, or $0.05 per share.
-- An operating loss of $34.2 million. Excluding net expenses of $12.2
million, relating to the termination of leases and the impairment
charge of $36.6 million, the operating loss would have amounted to
operating income of $14.6 million.
-- Revenues of $108.0 million.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships
Inc., commented:
During 2009, we reached two very important milestones in the history of our
company under a very tough financial environment for the global economy and
the shipping industry:
-- We completed our newbuilding program by taking delivery of six product
tankers, from a well-established Korean yard, all of which we
immediately chartered out at fixed rates for periods that range between
7 and 10 years. These charters have been agreed on a bareboat basis,
which not only reduces our long-term market risk relating to the
vessels, but also eliminates our operational risk for that period.
-- We terminated the charters on the last five chartered-in vessels in our
fleet. These vessels were product tankers and their daily cost, taking
into account lease hire payments and operating expenses, was
significantly higher than the market rates that have been prevailing in
the product tanker segment.
We took an impairment charge during the fourth quarter, on our two older
tankers in our fleet, due to the fact that their present time charters
expire during the current year, and we expect that future charters will be
at lower rates given the market conditions that have been prevailing in the
product tanker segment.
I would also like to bring to everyone's attention, the impeccable
utilization rates of the last quarter of 2009. We will do our best to
maintain these rates going forward.
Looking into the future, we believe that we offer a solid growth platform
due to the following characteristics:
-- We do not have any capital commitments.
-- We have a very young owned fleet made up of 13 vessels; eight product
tankers with an average age of 2.9 years and five dry bulk vessels with
an average age of 8.9 years.
-- We have a diverse charter portfolio with significant value. 84% of
total ship days until the end of 2011 are under fixed employment and
the gross revenue that we expect to receive from these charters amounts
to approximately $151 million. Looking further into the future, 75% of
our total ship days until the end of 2012 are under fixed employment
and the gross revenue that we expect to receive from these charters
amounts to approximately $199 million.
The following indicators serve to highlight the operational performance of the Company's current fleet during the fourth quarters of 2008 and 2009 and the years ended December 31, 2008 and 2009:
CURRENT FLEET DATA
Three Months Ended Year Ended -
- December 31, December 31,
------------------ ------------------
2008 2009 2008 2009
-------- -------- -------- --------
Total number of vessels 7 13 7 13
-------- -------- -------- --------
Total calendar days for fleet (1) 644 1,196 2,406 4,126
-------- -------- -------- --------
Total available days for fleet (2) 630 1,196 2,338 4,060
-------- -------- -------- --------
Total operating days for fleet (3) 622 1,196 2,314 4,028
-------- -------- -------- --------
Fleet utilization (4) 98.73% 100.00% 98.97% 99.21%
-------- -------- -------- --------
(1) We define calendar days as the total days the vessels were in our
possession for the relevant period. Calendar days are an indicator of the
size of our fleet over the relevant period and affect both the amount of
revenues and expenses that we record during that period.
(2) We define available days as the number of calendar days less the
aggregate number of days that our vessels are off-hire due to scheduled
repairs or scheduled guarantee inspections in the case of newbuildings,
vessel upgrades or special surveys and the aggregate amount of time that we
spend positioning our vessels. Companies in the shipping industry generally
use available days to measure the number of days in a period during which
vessels should be capable of generating revenues. We determined to use
available days as a performance metric for the first time, in the second
quarter and first half of 2009. We have determined to adjust the
calculation method of utilization to include available days in order to be
comparable with shipping companies that calculate utilization using
operating days divided by available days.
(3) We define operating days as 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 the vessels
actually generate revenues.
(4) We calculate fleet utilization by dividing the number of operating days
during a period by the number of available days during that 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 scheduled guarantee inspections in the case of newbuildings, vessel
upgrades, special or intermediate surveys and vessel positioning. We used a
new calculation method for fleet utilization for the first time, in the
second quarter and first half of 2009. In all prior filings and reports,
utilization was calculated by dividing operating days by calendar days. We
have determined to adjust the calculation method in order to be comparable
with most shipping companies, which calculate utilization using operating
days divided by available days.
The following table presents the Company's current fleet and employment
profile:
Profit
Sharing
Above
Year Charter Daily Base Rate
Dwt Built Type Expiry Base Rate (2009)
------- ----- -------- --------- --------- ----------
Eight Tanker Vessels
100% first
$ 1,000 +
Time 50%
Dauntless 46,168 1999 Charter Q1/2010 $ 16,250 thereafter
100% first
$ 1,000 +
Time 50%
Ioannis P 46,346 2003 Charter Q4/2010 $ 18,000 thereafter
Bareboat
Miss Marilena 50,000 2009 Charter Q1-2/2019 $ 14,400 -
Bareboat
Lichtenstein 50,000 2009 Charter Q1-2/2019 $ 14,550 -
Bareboat
Ionian Wave 50,000 2009 Charter Q1-2/2016 $ 14,300A -
Bareboat
Tyrrhenian Wave 50,000 2009 Charter Q1-2/2016 $ 14,300A -
Bareboat
Britto 50,000 2009 Charter Q1-2/2019 $ 14,550 -
Bareboat
Hongbo 50,000 2009 Charter Q1-2/2019 $ 14,550 -
Total Tanker dwt 392,514
Five Drybulk Vessels
Time
Cyclades 75,681 2000 Charter Q2/2011 $ 54,250 -
Time
Amalfi 45,526 2000 Charter Q4/2011 $ 14,000 -
Papillon (ex Voc Bareboat
Gallant) 51,200 2002 Charter Q2/2012 $ 24,000 -
Time
Pepito 75,928 2001 Charter Q1-2/2013 $ 41,000 -
Time
Astrale 75,933 2000 Charter Q3/2011 $ 18,000 -
Total Drybulk dwt 324,268
TOTAL DWT 716,782
A. On January 11, 2010 the Company announced that it had received from the
bareboat charterer of the M/T Ionian Wave and the M/T Tyrrhenian Wave, a
reduced charter hire rate of $10,000 per day, rather than the $14,300 per
day on a bareboat basis that is set forth in the charter agreement. As a
result, TOP Ships Inc. believes that such charterer is in breach of the
charter. TOP Ships Inc. is examining this unilateral reduction and intends
to take all necessary steps to recover the amounts owed.
Outstanding Indebtedness
As of December 31, 2009, we had total indebtedness under senior secured and
unsecured credit facilities with our lenders of $404.3 million (excluding
unamortized deferred financing fees of $5.2 million) with maturity dates
from 2010 through 2019.
Loan Covenants and Discussions with Banks
As of the date of this release, we have received waivers and signed
amendments to our loan agreements with all five of our lending banks in
relation to certain loan covenant breaches that have occurred since
December 31, 2008. However, as of December 31, 2009, we were in breach of
additional covenants with all of our banks, which had not been previously
waived. These breaches relate to EBITDA, our overall cash position (minimum
liquidity covenants), adjusted net worth and the asset value cover of our
product tankers with certain banks.
As of the date of this release, we are in discussions with all banks to
receive waivers for these breaches. We expect that our lenders will not
demand payment of our loans before their maturity, provided that we pay
loan installments and accumulated or accrued interest as they fall due
under the existing credit facilities.
Due to these breaches the Company expects to classify all of its debt and
swap facilities as current in its audited annual financial statements for
the year ended December 31, 2009.
Passive Foreign Investment Company Status
The Company previously announced that it would likely be considered a
passive foreign investment company, or PFIC, for U.S. federal income tax
purposes for 2009. The Company confirms that it will be treated as a PFIC
for 2009. As a result, U.S. taxable holders of the Company's shares may be
subject to adverse U.S. federal income tax consequences upon the
disposition of the shares or the receipt of certain distributions from the
Company. These consequences may be ameliorated if a U.S. taxable
shareholder makes a timely "qualified electing fund," or QEF, election.
The Company will provide all necessary information to allow shareholders to
make and maintain a QEF election and will post such information on its
website at www.topships.org. In addition, it should be noted that, as a
result of the Company being treated as a PFIC in 2009, any dividends paid
by the Company in 2009 or 2010 will not be eligible to be treated as
"qualified dividend income," which is eligible for preferential income tax
rates in the hands of non-corporate U.S. shareholders. THIS PARAGRAPH IS
NOT INTENDED AS TAX ADVICE. SHAREHOLDERS ARE STRONGLY ENCOURAGED TO
CONSULT THEIR TAX ADVISORS REGARDING MAKING A TIMELY QEF ELECTION WITH
RESPECT TO THE COMPANY AND THE CONSEQUENCES OF THE COMPANY BEING TREATED AS
A PFIC IN THEIR SPECIFIC TAX SITUATION.
Conference Call and Webcast
TOP Ships' management team will host a conference call on Friday, March 12,
2010, at 11:00 a.m. EST to discuss the Company's financial results.
Conference Call details:
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 "TOP Ships".
A replay of the conference call will be available until March 19, 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: 39394642#.
Audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the TOP Ships Inc. website (www.topships.org) under "Investor Relations".
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
About TOP Ships Inc.
TOP Ships Inc., formerly known as TOP Tankers Inc., is an international
provider of worldwide seaborne crude oil and petroleum products and drybulk
transportation services. The Company operates a combined tanker and drybulk
fleet as follows:
-- A fleet of eight double-hull Handymax tankers and an average age of 2.9
years with a total carrying capacity of approximately 0.4 million dwt,
of which 76%, in terms of dwt, are sister ships. Two of the Company's
Handymaxes are on time charter contracts with an average term of 5
months with both of the time charters including profit sharing
agreements above their base rates. Six of the Company's Handymax
tankers are fixed on a bareboat charter basis with an average term of
8.1 years.
-- A fleet of five drybulk vessels with a total carrying capacity of
approximately 0.3 million dwt and an average age of 8.9 years, of which
47%, in terms of dwt, are sister ships. All of the Company's drybulk
vessels have fixed rate employment contracts for an average period of
24 months.
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, our management's examination of historical
operating trends, data contained in our records and other data available
from third parties. Although we believe that these assumptions were
reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, we cannot assure you that
we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in
our view, could cause actual results to differ materially from those
discussed in the forward-looking statements include the strength of world
economies and currencies, general market conditions, including fluctuations
in charter rates and vessel values, failure of a seller to deliver one or
more vessels or of a buyer to accept delivery of one or more vessels,
inability to procure acquisition financing, default by one or more
charterers of our ships, changes in the demand for crude oil and petroleum
products, changes in demand for dry bulk shipping capacity, changes in our
operating expenses, including bunker prices, drydocking and insurance
costs, the market for our 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.
TOP SHIPS INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Expressed in thousands of U.S. Dollars - except for share and
per share data)
Three Months Ended Year Ended
December 31, December 31,
2008 2009 2008 2009
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
Revenues $ 36,962 $ 24,397 $ 257,380 $ 107,979
EXPENSES:
Voyage expenses 1,712 420 38,656 3,372
Charter hire
expense 5,810 - 53,684 10,827
Amortization of
deferred gain on
sale and leaseback
of vessels and
write-off of
seller's credit (807) - (18,707) (7,799)
Lease termination
expense - - - 15,391
Other vessel
operating expenses 9,184 2,414 67,114 23,739
Dry-docking costs 364 18 10,036 4,602
Depreciation 5,856 8,726 32,664 31,585
General and
administrative
expenses 6,891 7,919 31,388 23,835
Gain on sale of
vessels - - (19,178) -
Impairment on
vessels - 36,638 - 36,638
----------- ----------- ----------- -----------
Operating
income (loss) 7,952 (31,738) 61,723 (34,211)
----------- ----------- ----------- -----------
OTHER INCOME
(EXPENSES):
Interest and
finance costs (3,233) (4,337) (25,764) (13,969)
Gain (loss) on
financial
instruments 2,914 224 (12,024) (2,081)
Interest income 815 18 1,831 235
Other, net (19) (112) (127) (170)
----------- ----------- ----------- -----------
Total other income
(expenses), net 477 (4,207) (36,084) (15,985)
----------- ----------- ----------- -----------
Net Income (loss) $ 8,429 $ (35,945) $ 25,639 $ (50,196)
=========== =========== =========== ===========
Earnings (loss) per
common share, basic
and diluted $ 0.28 $ (1.20) $ 0.97 $ (1.78)
=========== =========== =========== ===========
Weighted average common
shares outstanding,
basic and diluted 28,090,125 30,038,570 25,445,031 28,230,585
=========== =========== =========== ===========
On January 1, 2009 the Company adopted ASC 260-10-45-61A "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities" (formerly known as FSP FASB 03-6-1). Upon
adoption of the new guidance, unvested share-based payment awards that
contain rights to receive non forfeitable dividends or dividend equivalents
(whether paid or unpaid) are participating securities, and thus, should be
included in the two-class method of computing earnings per share (EPS).
This standard was applied retroactively to all periods presented and
reduced basic EPS by $0.02 and $0.04 for the three and twelve months ended
December 31, 2008, respectively.
TOP SHIPS INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars - except for share and
per share data)
Year Ended
December 31,
2008 2009
----------- -----------
ASSETS (Unaudited) (Unaudited)
CASH AND CASH EQUIVALENTS $ 46,242 $ -
ADVANCES FOR VESSELS ACQUISITIONS / UNDER
CONSTRUCTION 159,971 -
VESSELS, NET 414,515 642,953
RESTRICTED CASH 52,575 22,244
OTHER ASSETS 25,072 10,733
----------- -----------
Total assets $ 698,375 $ 675,930
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
FINANCIAL INSTRUMENTS 16,438 13,803
FAIR VALUE OF BELOW MARKET TIME CHARTER 3,911 -
DEBT 342,479 399,087
DEFERRED GAIN ON SALE AND LEASEBACK OF VESSELS 15,479 -
OTHER LIABILITIES 28,017 15,844
----------- -----------
Total liabilities 406,324 428,734
----------- -----------
COMMITMENTS AND CONTINGENCIES
----------- -----------
STOCKHOLDERS' EQUITY 292,051 247,196
----------- -----------
----------- -----------
Total liabilities and stockholders' equity $ 698,375 $ 675,930
=========== ===========
TOP SHIPS INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
Year Ended
December 31,
2008 2009
----------- -----------
(Unaudited) (Unaudited)
Cash Flows provided by (used in) Operating
Activities:
Net income (loss) $ 25,639 $ (50,196)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization and write off
of deferred financing costs 38,605 35,005
Stock-based compensation expense 5,116 3,467
Change in fair value of financial instruments 10,650 (2,635)
Financial instrument termination payments (7,500) -
Amortization of deferred gain on sale and
leaseback of vessels and write off of
seller's credit (18,707) (7,799)
Amortization of fair value below market time
charter (21,795) (3,911)
Loss (gain) on sale of other fixed assets 126 165
Gain on sale of vessels (19,178) -
Impairment on vessels - 36,638
Change in operating assets and liabilities (1,109) (4,158)
----------- -----------
Net Cash provided by Operating Activities 11,847 6,576
----------- -----------
Cash Flows provided by (used in) Investing
Activities:
Principal payments received under capital lease 46,000 -
Principal payments paid under capital lease (68,828) -
Advances for vessels acquisitions / under
construction (114,260) -
Vessel acquisitions and improvements (118,142) (136,678)
Insurance claims recoveries 3,447 2,656
Increase in restricted cash (26,075) -
Decrease in restricted cash - 30,331
Net proceeds from sale of vessels 338,143 -
Net proceeds from sale of other fixed assets 58 156
Acquisition of other fixed assets (1,792) (836)
----------- -----------
Net Cash provided by (used in) Investing
Activities 58,551 (104,371)
----------- -----------
Cash Flows (used in) provided by Financing
Activities:
Proceeds from long-term debt 271,156 111,670
Payments of long-term debt (368,563) (54,274)
Financial instrument termination payments - (5,000)
Financial instrument upfront receipt 1,500 -
Proceeds from issuance of common stock, net of
issuance costs 50,601 2,569
Cancellation of fractional shares (2) -
Repurchase and cancellation of common stock (731) (732)
Payment of financing costs (4,129) (2,680)
----------- -----------
Net Cash (used in) provided by Financing
Activities (50,168) 51,553
----------- -----------
Net increase (decrease) in cash and cash
equivalents 20,230 (46,242)
Cash and cash equivalents at beginning of year 26,012 46,242
----------- -----------
Cash and cash equivalents at end of year $ 46,242 $ 0
=========== ===========
Contact Information: Contacts: Investor Relations / Media: 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: topships@capitallink.com Company: Alexandros Tsirikos Chief Financial Officer TOP Ships Inc. 1, Vassilissis Sofias Str. & Meg. Alexandrou Str. 151 24, Maroussi, Greece Tel: +30 210 812 8180 Email: atsirikos@topships.org