-- For the third quarter of 2009, the Company reported a net profit of
$35.6 million or $0.12 basic and diluted profit per share. Included
in the third quarter 2009 results is a loss of $39.3 million or $0.15
per share associated with the valuation of the Company's interest
rate swaps. Excluding this item, net income would amount to $74.9
million or $0.27 per share.
- Basic earnings per share for the third quarter of 2009 include a
non-cash accrual for the cumulative dividends on the Series A
Convertible Preferred Stock, amounting to $4.0 million, which
reduces the income available to common shareholders (basic earnings
per share is calculated as net income less accrued dividends on
preferred stock divided by weighted average number of common shares
outstanding).
George Economou, Chairman and Chief Executive Officer of the Company
commented:
"We are pleased to report another quarter of profitable operating results
for DryShips as both our drilling and drybulk units continued to perform at
high utilization rates. We are particularly pleased with the high
utilization rates achieved by the Eirik Raude, which is drilling off Ghana
at the Jubilee field for Tullow Oil. The Leiv Eiriksson is expected to
complete its assignment with Shell in the North Sea during October and
commence mobilization for drilling operations in the Black Sea under a
3-year contract for Petrobras. Most economic indicators for the world
economy seem to indicate the end of the recession and we are also seeing
the signs of recovery from countries besides China and India. The stimulus
plan implemented by the Chinese government earlier in the year has by no
means played itself out, as the majority of this money went to
infrastructure development which is medium to long term projects. While
drybulk shipping demand is projected to remain strong for the coming years,
the large orderbook remains a cause for concern, especially for 2010.
Actual deliveries in the first nine months of 2009 were much smaller than
were anticipated at the beginning of the year and offer some hope that
cancellations and delays will alleviate the projected oversupply.
"Our drybulk fleet is now virtually fully fixed for the remainder of 2009
and 2010 and 77% fixed for 2011 at healthy levels and we are prepared to
leverage the volatility in freight rates in the future through further
vessel acquisitions. DryShips now has $1.44 billion in fixed EBITDA from
its dry bulk and drilling units over the next 2.25 years and we are well
positioned to take advantage of acquisition opportunities as they arise."
Financial Review: 2009 Third Quarter
The Company recorded a net profit of $35.6 million, or $0.12 basic and
diluted profit per share for the three-month period ended September 30,
2009, as compared to a net profit of $180.0 million, or $4.13 basic and
diluted earnings per share for the three-month period ended September 30,
2008. EBITDA, which is defined and reconciled later in this press release,
was $104.8 million for the third quarter of 2009 as compared to $258.5
million for the same period in 2008.
Included in the third quarter results is a loss of $39.3 million or $0.15
per share associated with the valuation of the Company's interest rate
swaps. Excluding this item, net income would amount to $74.9 million or
$0.27 per share.
Basic earnings per share for the third quarter of 2009 include a non-cash
accrual for the cumulative dividends on the Series A Convertible Preferred
Stock, amounting to $4.0 million, which reduces the income available to
common shareholders.
For the drybulk carrier segment, net voyage revenues (voyage revenues minus
voyage expenses) decreased by $113.4 million to $114.8 million for the
three-month period ended September 30, 2009, as compared to $228.2 million
for the three-month period ended September 30, 2008. The decrease is
attributable to the substantially lower freight market during the third
quarter of 2009 as compared to the third quarter of 2008. For the offshore
drilling segment, revenues from drilling contracts amounted to $107.6
million for the three-month period ended September 30, 2009 as compared to
$88.1 for the same period in 2008.
Total vessel and rig operating expenses and total depreciation and
amortization decreased to $56.2 million and $49.4 million, respectively,
for the three-month period ended September 30, 2009 from $58.3 million and
$50.4 million, respectively, for the three-month period ended September 30,
2008. Total general and administrative expenses decreased to $22.9 million
from $27.8 million during the comparative periods.
Interest and finance costs net of interest income decreased to $16.3
million for the three-month period ended September 30, 2009, compared to
$27.4 million for the three-month period ended September 30, 2008. This
decrease is primarily attributable to decreased average interest rate
levels during the three-month period ended September 30, 2009, as compared
to the same period in 2008.
Fleet List
The table below describes our drybulk fleet profile as of October 23, 2009:
Year Gross rate Redelivery
Built DWT Type Per day Earliest Latest
Fixed rate employment
Capesize:
Alameda 2001 170,269 Capesize $ 21,000 Feb-11 May-11
Brisbane 1995 151,066 Capesize $ 25,000 Dec-11 Apr-12
Capri 2001 172,579 Capesize $ 61,000 Apr-18 Jun-18
Flecha 2004 170,012 Capesize $ 55,000 Jul-18 Nov-18
Manasota 2004 171,061 Capesize $ 67,000 Feb-13 Apr-13
Mystic 2008 170,500 Capesize $ 52,310 Aug-18 Dec-18
Samsara 1996 150,393 Capesize $ 57,000 Dec-11 Apr-12
Panamax:
Avoca 2004 76,500 Panamax $ 45,500 Aug-13 Dec-13
Bargara 2002 74,832 Panamax $ 43,750 May-12 Jul-12
Capitola 2001 74,832 Panamax $ 39,500 Jun-13 Aug-13
Catalina 2005 74,432 Panamax $ 40,000 Jun-13 Aug-13
Conquistador 2000 75,607 Panamax $ 17,750 Aug-11 Nov-11
Coronado 2000 75,706 Panamax $ 18,250 Sep-11 Nov-11
Ecola 2001 73,931 Panamax $ 43,500 Jun-12 Aug-12
Iguana * 1996 70,349 Panamax $ 13,456 Sep-11 Sep-11
La Jolla 1997 72,126 Panamax $ 14,750 Aug-11 Nov-11
Levanto 2001 73,931 Panamax $ 16,800 Sep-11 Nov-11
Ligari 2004 75,583 Panamax $ 55,500 Jun-12 Aug-12
Maganari 2001 75,941 Panamax $ 14,500 Jul-11 Sep-11
Majorca 2005 74,364 Panamax $ 43,750 Jun-12 Aug-12
Marbella 2000 72,561 Panamax $ 14,750 Aug-11 Nov-11
Mendocino 2002 76,623 Panamax $ 56,500 Jun-12 Sep-12
Ocean Crystal 1999 73,688 Panamax $ 15,000 Aug-11 Nov-11
Oliva 2009 75,000 Panamax $ 17,850 Oct-11 Dec-11
Oregon 2002 74,204 Panamax $ 16,350 Aug-11 Oct-11
Padre 2004 73,601 Panamax $ 46,500 Sep-12 Dec-12
Positano 2000 73,288 Panamax $ 42,500 Sep-13 Dec-13
Rapallo 2009 75,000 Panamax $ 15,400 Aug-11 Oct-11
Redondo 2000 74,716 Panamax $ 34,500 Apr-13 Jun-13
Saldanha 2004 75,500 Panamax $ 52,500 Jun-12 Sep-12
Samatan 2001 74,823 Panamax $ 39,500 May-13 Jul-13
Sorrento 2004 76,633 Panamax $ 17,300 Sep-11 Dec-11
Toro 1995 73,034 Panamax $ 16,750 May-11 Jul-11
Xanadu 1999 72,270 Panamax $ 39,750 Jul-13 Sep-13
Supramax:
Pachino (ex VOC
Galaxy) 2002 51,201 Supramax $ 20,250 Sep-10 Feb-11
Paros I (ex Clipper
Gemini) 2003 51,201 Supramax $ 27,135 Oct-11 May-12
Spot rate employment
Panamax:
Delray 1994 71,862 Panamax
Primera 1998 72,495 Panamax
Sonoma 2001 74,786 Panamax
* Based on a synthetic time charter
Summary Operating Data (unaudited)
(Dollars in thousands, except average daily results)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2008 2009 2008 2009
--------- --------- --------- ---------
Average number of vessels(1) 38.9 38.5 38.6 37.8
Total voyage days for vessels(2) 3,568 3,492 10,485 10,125
Total calendar days for
vessels(3) 3,578 3,541 10,567 10,326
Fleet utilization(4) 99.7% 98.6% 99.2% 98.1%
Time charter equivalent(5) $ 63,947 $ 32,887 $ 65,909 $ 29,986
Vessel operating expenses
(daily)(6) $ 5,488 $ 5,536 $ 5,421 $ 5,392
(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) Total voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of off hire days.
(3) Calendar days are the total number of days the vessels were in our
possession for the relevant period including off hire days.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by dividing
voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is determined by
dividing voyage revenues (net of voyage expenses) by 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 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.
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2008 2009 2008 2009
--------- --------- --------- ---------
Voyage revenues 239,970 120,585 730,954 325,052
Voyage expenses (11,807) (5,742) (39,899) (21,447)
--------- --------- --------- ---------
Time charter equivalent
revenues 228,163 114,842 691,055 303,605
--------- --------- --------- ---------
Total voyage days for vessels 3,568 3,492 10,485 10,125
Time charter equivalent 63,947 32,887 65,909 29,986
(6) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and repairs
is calculated by dividing vessel operating expenses by fleet calendar days
for the relevant time period.
Financial Statements
Unaudited Condensed Consolidated Income Statements
(Expressed in Thousands
of U.S. Dollars except Three Months Ended Nine Months Ended
for share and per September 30, September 30,
share data) ------------------------ ------------------------
2008 2009 2008 2009
----------- ----------- ----------- -----------
REVENUES:
Voyage revenues $ 239,970 $ 120,584 $ 730,954 $ 325,052
Revenues from drilling
contracts 88,064 107,619 131,859 310,251
----------- ----------- ----------- -----------
328,034 228,203 862,813 635,303
EXPENSES:
Voyage expenses 11,807 5,742 39,899 21,447
Vessel operating
expenses 19,637 19,602 57,287 55,680
Drilling rigs operating
expenses 38,691 36,598 52,079 105,924
Depreciation and
amortization 50,378 49,416 108,313 146,569
Gain on sale of vessels (65,766) - (226,024) (2,432)
Loss on contract
cancellations, net - - - 215,532
General and
administrative
expenses 27,795 22,893 53,142 66,313
----------- ----------- ----------- -----------
Operating income 245,492 93,952 778,117 26,270
OTHER INCOME:
Interest and finance
costs, net of interest
income (27,444) (16,276) (65,988) (64,930)
Gain (loss) on interest
rate swaps (36,997) (39,306) (30,918) 20,988
Other, net (396) 1,839 103 1,304
Equity in loss of
investee - - (6,893) -
Income taxes (641) (3,505) (1,508) (9,859)
----------- ----------- ----------- -----------
Total other income
(expenses), net (65,478) (57,248) (105,204) (52,497)
----------- ----------- ----------- -----------
Net income (loss) 180,014 36,704 672,913 (26,227)
Net income attributable
to Noncontrolling
interests (12) (1,063) (16,825) (7,178)
----------- ----------- ----------- -----------
Net income (loss)
attributable to
DryShips Inc. common
stockholders $ 180,002 $ 35,641 $ 656,088 $ (33,405)
=========== =========== =========== ===========
Earnings per common
share, basic $ 4.13 $ 0.12 $ 15.73 $ (0.19)
Weighted average number
of shares, basic 42,721,141 253,824,880 41,029,206 193,621,270
Earnings per common
share, diluted $ 4.13 $ 0.12 $ 15.73 $ (0.19)
Weighted average number
of shares, diluted 42,721,141 253,824,880 41,029,206 193,621,270
Unaudited Condensed Consolidated Balance Sheets
(Expressed in Thousands of U.S. Dollars December September
except for share and per share data) 31, 2008 30, 2009
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 303,114 $ 291,583
Restricted cash 320,560 377,713
Trade accounts receivable, net 52,441 44,819
Other current assets 44,312 59,250
----------- -----------
Total current assets 720,427 773,365
----------- -----------
FIXED ASSETS, NET:
Advances for vessels under construction and
acquisitions 535,616 1,138,087
Vessels, net 2,134,650 2,089,781
Drilling rigs, machinery and equipment, net 1,393,158 1,340,364
----------- -----------
Total fixed assets, net 4,063,424 4,568,232
----------- -----------
OTHER NON CURRENT ASSETS:
Other non-current assets 58,829 63,246
----------- -----------
Total non current assets, net 58,829 63,246
----------- -----------
Total assets $ 4,842,680 $ 5,404,843
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,370,556 $ 1,762,777
Other current liabilities 154,492 137,667
----------- -----------
Total current liabilities 2,525,048 1,900,444
----------- -----------
NON CURRENT LIABILITIES
Long term debt, net of current portion 788,314 694,896
Other non-current liabilities 237,746 141,864
----------- -----------
Total non current liabilities 1,026,060 836,760
----------- -----------
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' EQUITY:
Total DryShips Inc. stockholders' equity 1,291,572 2,667,639
----------- -----------
Total liabilities and stockholders equity $ 4,842,680 $ 5,404,843
=========== ===========
EBITDA Reconciliation
EBITDA represents net income before interest, taxes, depreciation and
amortization. EBITDA does not represent and should not be considered as an
alternative to net income or cash flow from operations, as determined by
United States generally accepted accounting principles, or 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
a company's ability to service and/or incur indebtedness.
The following table reconciles net income to EBITDA:
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
(Dollars in thousands) 30, 2008 30, 2009 30, 2008 30, 2009
---------- ---------- ---------- ---------
Net income / (loss) 180,002 35,641 656,088 (33,405)
Add: Net interest expense 27,444 16,276 65,988 64,930
Add: Depreciation and
amortization 50,378 49,416 108,313 146,569
Add: Income taxes 641 3,505 1,508 9,859
---------- ---------- ---------- ---------
EBITDA 258,465 104,838 831,897 187,953
========== ========== ========== =========
Conference Call and Webcast: Tuesday, October 27th , 2009
As announced, the Company's management team will host a conference call, on
Tuesday, October 27, 2009 at 8:30 AM Eastern Daylight Time 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) 1452 542 301 (from outside the US). Please quote
"DryShips."
A replay of the conference call will be available until October 29, 2009.
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 55 00
00 and the access code required for the replay is: 2133051#
A replay of the conference call will also be available on the Company's
website at www.dryships.com under the Investor Relations section.
Slides and Audio Webcast
There will also be a simultaneous live webcast over the Internet, through
the DryShips Inc. website (www.dryships.com). Participants to the live
webcast should register on the website approximately 10 minutes prior to
the start of the webcast.
About DryShips, Inc.
DryShips Inc., based in Greece, is an owner and operator of drybulk
carriers and offshore oil deep water drilling that operate worldwide. As of
the day of this release, DryShips owns a fleet of 39 drybulk carriers
comprising seven Capesize, 30 Panamax and two Supramax, with a combined
deadweight tonnage of over 3.4 million tons, 2 ultra deep water
semisubmersible drilling rigs and 4 ultra deep water newbuilding
drillships.
DryShips Inc.'s common stock is listed on the NASDAQ Global Market where it
trades under the symbol "DRYS."
Visit the Company's website at www.dryships.com
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking
statements. Forward-looking statements reflect our current views with
respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical
operating trends, data contained in our records and other data available
from third parties. Although DryShips Inc. 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 our control, DryShips Inc. cannot
assure you that it will achieve or accomplish these expectations, beliefs
or projections.
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 changes in charterhire rates and vessel values, changes in demand
that may affect attitudes of time charterers to scheduled and unscheduled
drydocking, changes in DryShips Inc.'s operating expenses, including bunker
prices, dry-docking and insurance costs, or actions taken by regulatory
authorities, potential liability from pending or future litigation,
domestic and international political conditions, potential disruption of
shipping routes due to accidents and political events or acts by
terrorists.
Risks and uncertainties are further described in reports filed by DryShips
Inc. with the US Securities and Exchange Commission.
Contact Information: Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel. 212-661-7566 E-mail: dryships@capitallink.com