(in US Dollars 000s, 9 months 9 months except share data) Q3 2006 Q3 2005 2006 2005 ----------- ----------- ----------- ----------- Revenues $ 3,572 $ 2,748 $ 8,759 $ 7,197 Operating income (excluding non-cash compensation cost) $ 479 ($197) ($817) $ 690 Net income (excluding non-cash compensation cost) $ 213 ($487) ($1,732) ($31) Operating income (loss) $ 262 ($197) ($1,466) $ 690 Net (loss) income ($3) ($487) ($2,380) ($31) EBITDA $ 1,719 $ 1,228 $ 2,859 $ 3,549 Earnings per share ($0.0005) ($0.08) ($0.38) ($0.005) Shares Outstanding for the period 6,290,100 6,282,600 6,290,100 6,282,600 ----------- ----------- ----------- -----------Fleet Profile:
As of today, the fleet profile of FreeSeas is as follows: Delivered Age to Vessel Type Dwt Year Built (in years) FreeSeas ---------- ---------- ---------- ---------- ---------- M/V Free Destiny Handy-size 25,240 1982 24 08/04/2004 M/V Free Envoy Handy-size 26,318 1984 22 09/29/2004 M/V Free Fighter Handy-size 39,240 1982 24 06/15/2005 ========== ========== ========== ========== ========== Total Fleet 3 Vessels 90,798 23 ---------- ---------- ---------- ---------- ----------Summary Fleet Data:
3rd 2nd 1st Quarter Quarter Quarter FLEET DATA 2006 2006 2006 -------- -------- -------- Average number of vessels (1) 3 3 3 Available days for fleet (2) 258 255 270 Calendar days for fleet (3) 276 273 270 Fleet utilization (4) 93.5% 93.4% 100.0% AVERAGE DAILY RESULTS Time charter equivalent (5) $ 13,845 $ 9,984 $ 5,852 Vessel operating expenses (inclusive of management fees) (6) $ 6,420 $ 4,140 $ 4,459 General and administrative expenses (7) $ 1,193 $ 1,427 $ 1,688 ======== ======== ======== Total vessel operating expenses (8) $ 7,614 $ 5,567 $ 6,147 -------- -------- --------(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 calendar days each vessel was a part of our fleet during the period divided by the number of calendar days in that period. (2) Available days for fleet are the total calendar days the vessels were in our possession for the relevant period after subtracting for off hire days associated with major repairs, dry-docks or special or intermediate surveys. (3) Calendar days are the total days we possessed the vessels in our fleet for the relevant period including off hire days associated with major repairs, dry dockings or special or intermediate surveys. (4) Fleet utilization is the percentage of time that our vessels were available for revenue generating available days, and is determined by dividing available 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 revenue generated from voyage charters net of voyage expenses and commissions by available 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. 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 voyage charters, time charters and bareboat charters) under which the vessels may be employed between the periods. (6) Daily vessel operating expenses, which include management fees, crew costs, provisions, deck and engine stores, lubricating oil, insurance, and maintenance and repairs are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. (7) Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period. (8) Total vessel operating expenses, or TVOE, are a measurement of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.
FreeSeas Inc. Consolidated Balance Sheet For the Nine Month Period ended September 30, 2006 and 2005 (All amounts expressed in thousands of U.S. Dollars except for share data) 09/30/2006 09/30/2005 unaudited unaudited ---------- ---------- ASSETS CURRENT ASSETS: Cash and cash equivalents 1,363 70 Trade receivables, net 454 843 Inventories 247 55 Claims and other 290 216 Due from related party 796 319 Total current assets 3,150 1,502 Fixed assets, net 20,497 24,809 Deferred charges, net 962 942 Total fixed assets 21,459 25,751 Total assets 24,609 27,254 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Bank overdraft 2,000 376 Accounts payable 1,533 1,904 Accrued liabilities 900 478 Unearned revenue 317 - Due to related party 736 894 Long-term debt, current portion 1,055 7,075 Total current liabilities 6,542 9,974 Long-term debt, net of current portion 7,275 6,950 Shareholders loan, net of current portion 2,789 7,582 Other liabilities - - Total long-term liabilities 10,064 14,532 Total liabilities 16,606 24,506 SHAREHOLDERS' EQUITY Share capital (40,000,000 common shares authorized, 5,000,000 preferred shares authorized, 6,290,100 common shares issued and outstanding, with par value $.001 per share) 6 2 Additional paid-in capital 10,837 2,229 Retained earnings (1,758) 517 Deferred stock compensation (1,082) - Total shareholders' equity 8,003 2,748 Total liabilities and shareholders' equity 24,609 27,254 FreeSeas Inc. Consolidated Statement of Operations For the Nine Month Period ended September 30, 2006 and 2005 (All amounts expressed in thousands of U.S. Dollars) 09/30/2006 09/30/2005 unaudited unaudited ---------- ---------- OPERATING REVENUES 8,759 7,197 OPERATING EXPENSES : Vessel operating expenses (3,208) (2,518) Voyage expenses (550) (150) Depreciation expense (3,350) (2,592) Amortization of deferred dry-docking and special survey costs (326) (267) Management fees to a related party (405) (353) Commissions (604) (338) Compensation costs (649) - General and administrative expenses (1,134) (289) Total operating expenses (10,225) (6,507) Income from operations (1,466) 690 OTHER INCOME ( EXPENSES ) Finance costs (795) (726) Interest income 16 4 Bad debts write-off (135) - Total other income / ( expenses ) (914) (721) Net ( loss ) (2,380) (31) FreeSeas Inc. Consolidated Statement of Operations For the Third Quarter ended September 30, 2006 and 2005 (All amounts expressed in thousands of U.S. Dollars except for share data) Q3 2006 Q3 2005 unaudited unaudited ---------- ---------- OPERATING REVENUES 3,572 2,748 OPERATING EXPENSES : Vessel operating expenses (1,109) (1,142) Voyage expenses (46) (20) Depreciation expense (1,129) (1,296) Amortization of deferred dry-docking and special survey costs (112) (130) Management fees to a related party (135) (134) Commissions (254) (147) Compensation costs (216) - General and administrative expenses (308) (75) Total operating expenses (3,309) (2,945) Income from operations 263 (197) OTHER INCOME ( EXPENSES ) Finance costs (268) (290) Interest income 3 0.2 Bad debts write-off - - Total other income / ( expenses ) (265) (290) Net ( loss ) (3) (487) FreeSeas Inc. Consolidated Statement of Cash Flows (All amounts expressed in thousands of U.S. Dollars) For the nine months ended September 30, 2006 -------------- Cash Flows from Operating Activities: Net (loss) (2,380) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,350 Amortization of deferred charges 282 Amortization of debt discount 89 Dry-docking and special survey 387 Compensation costs for stock options granted 650 Changes in: Trade receivables (447) Claims and other receivables (471) Inventories 205 Due from related party 118 Accounts payable (175) Accrued liabilities (690) Unearned revenue 317 Due to related party 157 Net Cash provided by Operating Activities 1,265 Net Cash used in Investing Activities 0 Cash Flows from Financing Activities: Proceeds from long-term debt 2,331 Payments of long-term debt (7,000) Payments of loans from shareholders (500) Proceeds from bank overdraft 2,000 Reduction of common stock, net (128) Deferred financing costs (17) Net Cash used in Financing Activities (3,187) Net decrease in cash in hand and at bank (1,922) Cash in hand and at bank, Beginning of Period 3,285 Cash in hand and at bank, End of Period 1,363 Supplemental Cash Flow Information: Cash paid for interest 595 Non-cash shareholder distributions 9 FreeSeas Inc. Reconciliation of Net Income to Adjusted EBITDA (All amounts expressed in thousands of U.S. Dollars) Q3 2006 Q3 2005 9 MONTHS 9 MONTHS (unaudited) (unaudited) 2006 2005 (unaudited)(unaudited) --------- --------- --------- --------- Net loss (3) (487) (2,380) (31) Interest and finance costs, net 266 289 914 721 Depreciation 1,129 1,296 3,350 2,592 Amortization 112 130 326 267 Compensation costs 216 - 649 - Adjusted EBITDA 1,719 1,228 2,859 3,549 --------- --------- --------- ---------Adjusted EBITDA Reconciliation: FreeSeas Inc. considers Adjusted EBITDA to represent net earnings before interest, taxes, depreciation and amortization plus certain non-cash compensation expense. 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 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 we assess our liquidity position and because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. The Company's definition of EBITDA may not be the same as that used by other companies in the shipping or other industries. About FreeSeas Inc. FreeSeas Inc. is a Marshall Islands corporation with principal offices in Piraeus, Greece. FreeSeas is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry-bulk vessels. Currently, it has a fleet of three Handy-size vessels. FreeSeas' common stock and warrants trade on the NASDAQ Capital Market under the symbols FREE, FREEW and FREEZ, respectively. Risks and uncertainties are described in reports filed by FreeSeas Inc. with the US Securities and Exchange Commission, which can be obtained free of charge on the SEC's website at www.sec.gov. For more information about FreeSeas Inc. please go to our corporate website www.freeseas.gr. Forward-Looking Statements This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and 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 be correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which 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 dry bulk 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 obligation 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: Stathis D. Gourdomichalis Chief Financial Officer FreeSeas Inc. 93 Akti Miaouli Street 185 38 Piraeus, Greece Tel: 011-30-210-45-28-770 Fax: 011-30-210-429-10-10 E-Mail: info@freeseas.gr sdg@freeseas.gr www.freeseas.gr Investor Relations / Financial Media: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue - Suite 1536 New York, NY 10160, USA Tel: (212) 661-7566 Fax: (212) 661-7526 E-Mail: nbornozis@capitallink.com www.capitallink.com