(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