-- Net loss of $1.8 million or $0.06 per share. -- Operating income of $4.1 million. -- Revenues of $21.8 million.For the six months ended June 30, 2010, the Company reported:
-- Net loss of $0.9 million or $0.03 per share. -- Operating income of $9.5 million. -- Revenues of $44.9 million.Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc., commented: We are pleased to report a positive operating income for the second quarter and the first six months of 2010 which is a result of our committed charter portfolio. Net profit would have been marginally positive for the second quarter and $1.8 million for the first six months of 2010, respectively, before drydocking costs. We are also pleased to report that we expect to complete an agreement with DVB Bank to restructure the bridge loan which was due to be repaid on July 30, 2010. We expect that the agreement will involve a partial repayment and new maturity date. We believe that our relationship with DVB Bank remains excellent. The visibility of our cash flows has been further enhanced following our entry into a 3-year time charter contract for the M/V Cyclades with a well-established charterer at a daily rate of $20,000. The charter will commence upon redelivery of the vessel from its present charterer. The following indicators serve to highlight the operational performance of the Company's current fleet during the three-month and six-month periods ended June 30, 2009 and 2010:
CURRENT FLEET FIGURES
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
2009 2010 2009 2010
-------- -------- -------- --------
Total number of vessels 12 13 12 13
-------- -------- -------- --------
Total calendar days for fleet (1) 1,040 1,183 1,767 2,353
-------- -------- -------- --------
Total available days for fleet (2) 1,013 1,151 1,703 2,303
-------- -------- -------- --------
Total operating days for fleet (3) 995 1,149 1,674 2,301
-------- -------- -------- --------
Fleet utilization (4) 98.21% 99.82% 98.33% 99.88%
-------- -------- -------- --------
(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:
Daily Profit
Year Base Sharing
Dwt Built Charter Type Expiry Rate Base Rate
------- ---- ------------ --------- -------- -----------
Eight Tanker
Vessels
Dauntless 46,168 1999 Time Charter Q1/2012 $10,500 50%
Ioannis P 46,346 2003 Time Charter Q4/2010 $18,000 100% first
$1,000+ 50%
thereafter
Bareboat
Miss Marilena 50,000 2009 Charter Q1-2/2019 $14,400 None
Bareboat
Lichtenstein 50,000 2009 Charter Q1-2/2019 $14,550 None
Bareboat
Ionian Wave 50,000 2009 Charter Q1-2/2016 $14,300A None
Bareboat
Tyrrhenian Wave 50,000 2009 Charter Q1-2/2016 $14,300A None
Bareboat
Britto 50,000 2009 Charter Q1-2/2019 $14,550 None
Bareboat
Hongbo 50,000 2009 Charter Q1-2/2019 $14,550 None
Total Tanker dwt 392,514
Five Drybulk
Vessels
Cyclades 75,681 2000 Time Charter Q2/2011 $54,250
Subsequent charter Time Charter Q2/2014 $20,000 None
Amalfi 45,526 2000 Time Charter Q4/2011- $14,000 None
Q1/2012
Papillon (ex Voc 51,200 2002 Bareboat Q1-3/2012 $24,000 None
Gallant) Charter
Pepito 75,928 2001 Time Charter Q1-2/2013 $41,000 None
Astrale 75,933 2000 Time Charter Q3-4/2011 $18,000 None
Total Drybulk
dwt 324,268
TOTAL DWT 716,782
A. On January 11, 2010 we announced that we 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. We have been
examining this unilateral reduction and intend to take all necessary steps
to recover the amounts owed since the said charterer is considered to be in
breach of the charter.
Outstanding Indebtedness
As of June 30, 2010, we had total indebtedness under senior secured and
unsecured credit facilities with our lenders of $383.9 million (excluding
unamortized deferred financing fees of $4.1 million) with maturity dates
from 2010 through 2019.
We expect to complete an agreement with DVB Bank in relation to
restructuring the DVB bridge loan which was due to be repaid on July 30,
2010.
As of June 30, 2010, we had no non-restricted cash.
Loan Covenants and Discussions with Banks
As of June 30, 2010, we were in breach of loan covenants relating to
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA),
overall cash position (minimum liquidity covenants), adjusted net worth,
net asset value and asset cover with certain banks. As a result of these
covenant breaches with certain banks, we have classified all of our debt
and financial instruments as current. The amount of long-term debt and
financial instruments that have been reclassified and presented together
with current liabilities amounts to $333.7 million and $10.3 million,
respectively.
We have been in discussions with all of our banks in relation to these
covenant breaches as well as covenant breaches previously waived, for which
waiver periods expired as of the end of the first quarter.
We have obtained waivers from Emporiki Bank for all covenant breaches until
June 30, 2011.
Conference Call and Webcast
TOP Ships' management team will host a conference call on Thursday, August
5, 2010, at 11:00 a.m. EDT 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 August 12, 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 3.3
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 11
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
7.7 years.
-- A fleet of five drybulk vessels with a total carrying capacity of
approximately 0.3 million dwt and an average age of 9.3 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.
TABLES FOLLOW
TOP SHIPS INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
2009 2010 2009 2010
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
Revenues $ 28,636 $ 21,803 $ 58,429 $ 44,944
EXPENSES:
Voyage expenses 1,435 434 2,585 801
Charter hire expense 5,019 - 10,806 -
Amortization of
deferred gain on
sale and leaseback
of vessels and
write-off of
seller's credit (6,942) - (7,750) -
Lease termination
expense 15,385 - 15,385 -
Vessel operating
expenses 9,506 2,864 18,159 6,107
Dry-docking costs 2,939 1,809 4,202 2,669
Vessel Depreciation 7,969 8,157 14,309 16,313
General and
administrative
expenses 4,827 4,459 9,878 9,513
----------- ----------- ----------- -----------
Operating (loss)
income (11,502) 4,080 (9,145) 9,541
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSES):
Interest and finance
costs (3,493) (3,475) (5,764) (6,652)
(Loss) / gain on
financial
instruments (941) (2,412) 264 (3,811)
Interest income 19 33 208 65
Other, net (32) - (142) (33)
----------- ----------- ----------- -----------
Total other
expenses, net (4,447) (5,854) (5,434) (10,431)
----------- ----------- ----------- -----------
Net Loss $ (15,949) $ (1,774) $ (14,579) $ (890)
=========== =========== =========== ===========
Loss per share, basic
and diluted $ (0.58) $ (0.06) $ (0.53) $ (0.03)
=========== =========== =========== ===========
Weighted average common
shares outstanding,
basic and diluted 27,476,436 30,654,530 27,509,700 30,654,061
=========== =========== =========== ===========
TOP SHIPS INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
December 31, June 30,
2009 2010
----------- -----------
ASSETS (Unaudited) (Unaudited)
CASH AND CASH EQUIVALENTS $ - $ -
VESSELS, NET 642,953 626,640
RESTRICTED CASH 22,244 22,442
OTHER ASSETS 9,952 8,105
----------- -----------
Total assets $ 675,149 $ 657,187
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
FINANCIAL INSTRUMENTS 13,803 14,754
DEBT 399,087 379,772
OTHER LIABILITIES 15,063 15,609
----------- -----------
Total current liabilities 427,953 410,135
----------- -----------
COMMITMENTS AND CONTINGENCIES
----------- -----------
STOCKHOLDERS' EQUITY 247,196 247,052
----------- -----------
----------- -----------
Total liabilities and stockholders' equity $ 675,149 $ 657,187
=========== ===========
TOP SHIPS INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Expressed in thousands of U.S. Dollars)
Six Months Ended
June 30,
----------- -----------
2009 2010
----------- -----------
(Unaudited) (Unaudited)
Cash Flows (used in) provided by Operating
Activities:
Net loss $ (14,579) $ (890)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization of deferred
financing costs 15,351 17,911
Translation gain of foreign currency
denominated loan - (326)
Stock-based compensation expense 1,035 746
Change in fair value of financial instruments (2,145) 951
Amortization of deferred gain on sale and
leaseback of vessels and write-off of seller's
credit (7,750) -
Amortization of fair value below market time
charter (3,911) -
Loss on sale of other fixed assets 93 33
Provision for Doubtful Accounts 412 -
Change in operating assets and liabilities 810 724
---------- ----------
Net Cash (used in) provided by Operating Activities (10,684) 19,149
---------- ----------
Cash Flows (used in) provided by Investing
Activities:
Advances for vessels acquisitions / under
construction (19,573) -
Vessel acquisitions and improvements (102,102) -
Insurance claims recoveries 151 1,310
Increase in restricted cash - (198)
Decrease in restricted cash 29,733 -
Net proceeds from sale of other fixed assets 197 244
Acquisition of other fixed assets (399) (314)
----------- -----------
Net Cash (used in) provided by Investing Activities (91,993) 1,042
----------- -----------
Cash Flows provided by (used in) Financing
Activities:
Proceeds from long-term debt 92,660
Payments of long-term debt (30,144) (20,074)
Financial instrument termination payments (5,000)
Payment of common stock issuance costs (62) (25)
Repurchase and cancellation of common stock (732)
Payment of financing costs (287) (92)
---------- ----------
Net Cash provided by (used in) Financing Activities 56,435 (20,191)
---------- ----------
Net (decrease) increase in cash and cash
equivalents (46,242) -
Cash and cash equivalents at beginning of period 46,242 -
---------- ----------
Cash and cash equivalents at end of period $ - $ -
========== ==========
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