-- Reported net earnings of $100.4 million or $1.84(1) per share for the first quarter of 2007 -- Operating Revenues of $67.6 million for the first quarter of 2007 -- EBITDA(2) of $116.6 million for the first quarter of 2007 -- Dividend of $0.44 per common share payable on May 18, 2007 to all shareholders of record as of May 4, 2007 -- During the first quarter of 2007 Danaos took delivery of one 4,300 TEU container ship, the Norasia Integra, and sold six vessels, five drybulk carriers and one containership, the APL England. -- Orders for 14 additional large containerships representing an investment of approximately $1.2 billion.Danaos' CEO Dr. John Coustas commented: "We are extremely pleased with our first quarter achievements as it was the busiest in terms of new order activity and the most profitable ever for Danaos. During this quarter we increased our order-book by four 6,800 TEU containerships to be built in Jiangnan - China, five 6,500 TEU containerships and five 3,500 TEU containerships to be built in Hanjin Heavy Industries - Korea. Danaos' total orders now stand at 28 large size containerships with a total of 147,524 TEUs equivalent to 104% of our current fleet. Notably, we have already secured fixed rate long time charters of 10 to 15 years for eight of these newly placed orders and we are actively pursuing further opportunities to charter in advance the rest. Consequently we have managed to increase our contracted revenues by approximately $1 billion to $3.9 billion. Further, consistent with our declared dividend strategy we announced today our quarterly cash dividend of $0.44 per share. In this first quarter of 2007 we took delivery of the Norasia Integra, a 4,300 TEU containership which is fixed for a 12 year charter to the Yang Ming Group. We also delivered to their new owner all but one of our dry bulk carriers, with the last one to be delivered during the month of April. Through the sale of these dry bulk vessels Danaos has become a pure containership company with charter cover of approximately 90% up to 2010 and above 60% for the subsequent period up to 2017. During the first quarter of 2007 tonnage demand from the charter market has accelerated, driving the charter rate indexes higher. The actual rise has been much more pronounced in the larger containership sizes above 3,000 TEUs, a market segment in which Danaos holds a prominent position. The strong demand also resulted in the re-chartering of three of our vessels at accretive rates for three years." Three months ended March 31, 2007 compared to the three months ended March 31, 2006 During the quarter ended March 31, 2007, Danaos had an average of 31.0 containerships and 2.8 drybulk carriers in its fleet as opposed to 25.1 containerships and 7.0 drybulk carriers for the same period of 2006. We took delivery of the Norasia Integra, a 4,300 TEU containership on March 12, 2007 and sold six vessels, five drybulk carriers, the Alexandra I, Fivos, Dimitris C, Roberto C and Maria C on January 8, January 10, January 30 and February 27 of 2007 for the last two respectively and one 5,506 TEU containership, the APL England, on March 7, 2007. Our net income was $100.4 million or $1.84(1) per share for the first quarter of 2007 compared to net income of $21.5 million or $0.48(1) per share for the first quarter of 2006, an increase in net income of 367.2%. Excluding one-off gain from sale of vessels of $72.7 million and a loss resulting from change in fair value of debt denominated in JPY of $2.6 million, our net income for the first quarter of 2007 is $30.3 million or $0.55(1) per share. Operating Revenue Operating revenue increased 23.9%, or $13.1 million, to $67.6 million in the quarter ended March 31, 2007, from $54.5 million in the quarter ended March 31, 2006. The increase was mainly a result of the addition to our fleet of seven vessels, the MOL Confidence, a 4,651 TEU containership on March 23, 2006, the CSCL Pusan, a 9,580 TEU containership on September 8, 2006, the CSCL Le Havre, a 9,580 TEU containership on November 20, 2006 and three 4,814 TEU vessels, the Maersk Marathon, Maersk Messologi and Maersk Mytilini, on December 13, 18 and 22 of 2006 respectively, and the Norasia Integra, a 4,300 TEU containership on March 12, 2007. These additions to our fleet collectively contributed revenues of $14.5 million during the three months ended March 31, 2007. In addition the Company sold seven vessels, six drybulk carriers, the Sofia III, Alexandra I, Fivos, Dimitris C, Roberto C and Maria C on May 11, 2006, January 8, January 10, January 30 and February 27 of 2007 for the last two respectively and one 5,506 TEU containership the APL England on March 7, 2007, which collectively contributed less revenue of $4.3 million during the three months ended March 31, 2007. Vessel Operating Expenses Vessel operating expenses increased 17.9%, or $2.4 million, to $16.1 million in the quarter ended March 31, 2007, from $13.7 million in the quarter ended March 31, 2006. This increase was due to the addition to our fleet of seven containerships, the sale of six drybulk carriers, one containership and a general increase of operating expenses experienced by the overall industry. Depreciation & Amortization Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs. Depreciation Depreciation expense increased 49.1%, or $3.4 million, to $10.2 million in the quarter ended March 31, 2007, from $6.8 million for the quarter ended March 31, 2006. The increase in depreciation expense was due to the increase in the average number of vessels in our fleet as well as the addition of more expensive vessels as compared to those sold during the quarter ended March 31, 2007. Amortization of Deferred Dry-docking and Special Survey Costs Amortization of deferred dry-docking and special survey costs increased 34.0%, or $0.4 million, to $1.5 million in the quarter ended March 31, 2007, from $1.1 million in the quarter ended March 31, 2006. This was due to the costs of dry-docking and special surveys conducted for an additional 13 of our vessels during the last year. General and Administrative Expenses General and administrative expenses increased 33.1%, or $0.6 million, to $2.3 million in the quarter ended March 31, 2007 from $1.7 million in the same quarter of 2006, reflecting public company related costs which were not applicable in the quarter ended March 31, 2006. Other Operating Expenses Other Operating Expenses include Voyage Expenses Voyage Expenses Voyage expenses increased 39.7%, or $0.7 million, to $2.5 million in the quarter ended March 31, 2007, from $1.8 million for the quarter ended March 31, 2006. The increase in voyage expenses was due to commissions paid to our Manager for the vessels we acquired or sold during the period in accordance with our management contract. Interest Expense and Interest Income Interest expense decreased $1.3 million, or 18.0%, to $5.8 million in the quarter ended March 31, 2007, from $7.1 million in the quarter ended March 31, 2006. The decrease in interest expense was primarily due to the financing of our extensive newbuilding program which resulted in capitalizing $2.8 million of interest for the quarter ended March 31, 2007 as opposed to $1.7 million of capitalized interest for the quarter ended March 31, 2006. Interest income increased $0.1 million or 11.1% to $1.3 million for the quarter ended March 31, 2007 from $1.2 million in the quarter ended March 31, 2006, due to decreased bank deposits on which interest was earned which was offset by higher interest rates. Gain on Sale of vessels The gain on sale of vessels of $72.7 million for the period ended March 31, 2007 reflects the sale of the Alexandra I, Fivos, Dimitris C, Roberto C and Maria C to a third party drybulk operator for $118.0 million resulting in a gain of $72.9 million over the depreciated book value of these vessels at the time of their sale. On March 7, 2007 we sold and delivered the APL England to APL following the exercise of the call option APL had for this vessel. The sale consideration was $44.5 million. We incurred a loss on this sale of $0.2 million. EBITDA EBITDA increased 229.2%, or $81.2 million, to $116.6 million in the quarter ended March 31, 2007, from $35.4 million in the quarter ended March 31, 2006. Excluding one-off gain from sale of vessels of $72.7 million and a loss resulting from change in fair value of debt denominated in JPY of $2.6 million our EBITDA for the first quarter of 2007 is $46.5 million, representing an increase of 31.3% over the EBITDA of the same period of 2006. A table with analytical EBITDA calculations reconciling EBITDA to net income can be found at the end of this press release. Dividend Payment On January 18, 2007 we declared a dividend of $0.44 per common share for the fourth quarter of 2006 for all shareholders on record as of January 29, 2007 which was paid on February 14, 2007. On April 23, 2007, the Board of Directors declared a dividend of $0.44 per common share for the first quarter of 2007. The dividend is payable on May 18, 2007 to all shareholders of record as of May 4, 2007. We currently intend to pay quarterly dividends of $0.44 per share, or $1.76 per share per year. Recent News During the first quarter of 2007 Danaos Corporation entered into new shipbuilding contracts for 14 more large containership vessels, four of 6,800 TEU each, five of 6,500 TEU each and a further five of 3,400 TEU of capacity, all scheduled to be delivered throughout the end of 2009 and 2010. The total amount of this new investment program is in the region of $1.2 billion and brings the company's order-book to a total of 28 containership vessels, or 104% of its current fleet capacity. Further, during the last months, APL has declared their purchase option regarding the APL Scotland and the APL Holland according to their existing agreement with Danaos. Danaos Corporation now expects to sell these vessels back to APL at the end of their respective charter on or about June 22 and July 20, 2007 respectively for a total of $88 million. Conference Call and Webcast On Thursday, April 26, 2007 at 9:30 A.M. EDT, the Company's management will host a conference call to discuss the results. Conference Call details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote "Danaos" In case of any problems with the above numbers, please dial 1 866 223 0615 (US Toll Free Dial In). 800 694 1503 (UK Toll Free Dial In) or +44 (0)1452 586 513 (Standard International Dial In). Quote "Danaos" A telephonic replay of the conference call will be available until May 3, 2007 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 1186615# Slides and audio webcast: There will also be a live and then archived webcast of the conference call through the Danaos website (www.danaos.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. About Danaos Corporation Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Its current fleet of 31 containerships aggregating 138,931 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is the largest US listed containership company based on fleet size and market capitalization. Furthermore, the company has on order 28 additional containerships aggregating 147,524 TEU with scheduled deliveries up to 2010. The company's shares trade on the New York Stock Exchange under the symbol "DAC." Forward-Looking Statements Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 Danaos Corporation 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, Danaos Corporation 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 Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, 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 Danaos Corporation with the U.S. Securities and Exchange Commission. Visit our website at www.danaos.com (1) Based on basic and diluted weighted average number of shares for the respective period. (2) EBITDA is a NON-GAAP financial measure. Please see below for the reconciliation of EBITDA to Net Income. Appendix Fleet Utilization Danaos had 66 off-hire days in total in the first quarter, of which 63 were attributed to scheduled dry-docking & special survey operations. The following tables summarize vessel utilization and the impact of the off-hire days on the company's revenue relating to the last four quarters.
Second Third Fourth First Totals Quarter Quarter Quarter Quarter 2006 2006 2006 2007 -------- -------- -------- -------- --------- No. of No. of No. of No. of No. of Vessel utilization Days Days Days Days Days -------- -------- -------- -------- --------- Ownership days 2,953 2,967 3,123 3,040 12,083 Less Off-hire Days: Scheduled Dry-docking - (49) (22) (63) (134) Other Off-hire Days (1) (2) (2) (3) (8) Operating Days 2,952 2,916 3,099 2,974 11,941 -------- -------- -------- -------- --------- Vessel Utilization 100.0% 98.2% 99.2% 97.8% 98.8% Second Third Fourth First Totals Quarter Quarter Quarter Quarter 2006 2006 2006 2007 -------- -------- -------- -------- --------- Revenue - Impact of Off-hire (in '000s of US dollars) Revenue Revenue Revenue Revenue Revenue -------- -------- -------- -------- --------- 100% fleet utilization $ 60,034 $ 62,940 $ 69,720 $ 69,141 $ 261,835 Less Off-hire: Scheduled Dry-docking - (1,066) (455) (1,463) (2,984) Other Off-hire Days (35) (48) (38) (102) (223) -------- -------- -------- -------- --------- Actual Revenue Earned $ 59,999 $ 61,826 $ 69,227 $ 67,576 $ 258,628Fleet List The following table describes in detail our current fleet deployment profile.
Vessel Expiration of Vessel Name Size(TEU) Year Built Charter(1) ----------------------- ------------ ------------ ------------------ Containerships ----------------------- CSCL Pusan 9,580 2006 September 2018 CSCL Le Havre 9,580 2006 November 2018 CSCL America 8,468 2004 November 2016 CSCL Europe 8,468 2004 August 2016 APL Belgium 5,506 2002 January 2008 APL Holland(2) 5,506 2001 July 2007 APL Scotland(2) 5,506 2001 June 2007 Maersk Marathon 4,814 1991 December 2011 Maersk Messologi 4,814 1991 December 2011 Maersk Mytilini 4,814 1991 December 2011 Hyundai Commodore 4,651 1992 May 2011 Hyundai Duke 4,651 1992 April 2011 MOL Confidence 4,651 1994 November 2012 Norasia Integra 4,300 2004 May 2007 Maersk Derby 4,253 2004 April 2009 Vancouver Express 4,253 2004 March 2009 Norasia Hamburg 3,908 1989 March 2008 YM Yantian 3,908 1989 September 2011 YM Milano 3,129 1988 July 2008 Victory I 3,098 1988 July 2007 Independence 3,045 1986 June 2007 Henry 3,039 1986 May 2007 CMA CGM Elbe 2,917 1991 August 2010 CMA CGM Kalamata 2,917 1991 August 2010 CMA CGM Komodo 2,917 1991 August 2010 Pacific Bridge 2,130 1984 September 2008 Eagle Express 1,704 1978 October 2007 ----------------------- Bareboat Containerships ----------------------- Maersk Constantia 3,101 1979 April 2008 S.A. Helderberg 3,101 1977 December 2007 S.A. Sederberg 3,101 1978 January 2008 S.A. Winterberg 3,101 1978 March 2008 Drybulk Carriers (DWT) ----------------------- MV Achilleas(2) 69,180 1994 April 2007 (1) Earliest date charters could expire. Some charters include options to extend their term. (2) We have agreed to sell this vessel upon expiration of its current charter. Under the leading "Expiration of Charter" we include the expected month of delivery of this vessel to its new owner.New Deliveries The following table describes the expected additions to our fleet as a result of our new building containership program as well as the acquisition of a second hand containership.
Vessel Size Expected Delivery Expiration Vessel Name (TEU) Date(1) of Charter ----------------------- ------------ ------------------ ------------ Newbuildings ----------------------- HN 1639(1) 4,253 Sept 2007 2019 HN 1640(1) 4,253 Dec 2007 2019 HN 1670(1) 4,253 July 2008 2020 HN 1671(1) 4,253 Sept 2008 2020 HN 1672(1) 4,253 Oct 2008 2020 HN 1673(1) 4,253 Nov 2008 2020 HN 1698(1) 4,253 Mar 2009 2021 HN 1699(1) 4,253 June 2009 2021 HN S4001(2) 6,500 April 2009 2021 HN S4002(2) 6,500 June 2009 2021 HN S4003(2) 6,500 Aug 2009 2021 HN S4004(2) 6,500 Oct 2009 2021 HN S4005(2) 6,500 Dec 2009 2021 HN Z 00001 6,800 June 2010 - HN Z 00002 6,800 July 2010 - HN Z 00003 6,800 Aug 2010 - HN Z 00004 6,800 Aug 2010 - HN N-214 6,572 Nov 2009 - HN N-215 6,572 Jan 2010 - HN N-216 6,572 Mar 2010 2025 HN N-217 6,572 May 2010 2025 HN N-218 6,572 July 2010 2025 HN N-219 3,400 Nov 2009 2017 HN N-220 3,400 Jan 2010 2017 HN N-221 3,400 Feb 2010 2017 HN N-222 3,400 Apr 2010 2017 HN N-223 3,400 Jun 2010 2017 Secondhand ----------------------- E.R. Wellington 4,300 Sept 2007 2019 (1) Although the expected delivery dates are as set forth in the table above, the contracted delivery dates for our contracted vessels are as follows: HN 1639--September 30, 2007; HN 1640--November 30, 2007; HN 1670--July 31, 2008; HN 1671--October 31, 2008; HN 1672--November 30, 2008; HN 1673--December 31, 2008; HN 1698--March 31, 2009; HN 1699--June 30, 2009 and E.R. Wellington--September 15, 2007 to October 15,2007. (2) Vessel subject to charterer's option to purchase vessel after first eight years of time charter term for $78.0 million. DANAOS CORPORATION Statement of Operations (Expressed in thousands of United States dollars, except per share amounts) Three months Three months ended March 31, ended March 31, -------------- -------------- 2006 2007 -------------- -------------- (unaudited) (unaudited) OPERATING REVENUES $ 54,536 $ 67,576 OPERATING EXPENSES Vessel operating expenses (13,650) (16,101) Depreciation & amortization (7,942) (11,673) General & administrative (1,745) (2,322) Gain on sale of vessels 0 72,696 Other operating expenses (1,811) (2,530) -------------- -------------- Income From Operations 29,388 107,646 -------------- -------------- OTHER EARNINGS (EXPENSES) Interest income 1,136 1,263 Interest Expense (7,136) (5,849) Other finance income (cost), net 525 (596) Other income / (expense) 363 (2,206) Gain (loss) on derivatives (2,793) 108 -------------- -------------- Total Other Income (Expenses), net (7,905) (7,280) -------------- -------------- Net income $ 21,483 $ 100,366 ============== ============== EARNINGS PER SHARE Basic and dilluted net income per share $ 0.48 $ 1.84 ============== ============== Basic and dilluted weighted average number of shares 44,308 54,558 ============== ============== DANAOS CORPORATION Balance Sheets (Expressed in thousands of United States dollars) Year ended Three months December 31, ended March 31, --------------- --------------- 2006 2007 --------------- --------------- (audited) (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 43,075 $ 35,506 Restricted cash 2,493 22 Accounts receivable, net 2,170 2,861 Other current assets 11,962 18,815 --------------- --------------- 59,700 57,204 NON-CURRENT ASSETS Vessels 1,016,608 979,989 Advances for vessel acquisitions and vessels under construction 205,366 256,771 Deferred charges, net 9,399 9,511 Fair value of financial instruments 5,832 6,865 Other assets 285 357 --------------- --------------- 1,237,490 1,253,493 --------------- --------------- TOTAL ASSETS $ 1,297,190 $ 1,310,697 =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Long-term debt, current portion $ 22,760 $ 25,619 Accounts payable, accrued liabilities & other current liabilities 21,488 16,550 Fair value of financial instruments, current portion 1,466 1,438 --------------- --------------- 45,714 43,607 LONG-TERM LIABILITIES Long-term debt 639,556 578,557 Fair value of financial instruments, net of current portion 5,775 5,294 Other liabilities 40,293 39,793 --------------- --------------- 685,624 623,644 STOCKHOLDERS' EQUITY Common stock 546 546 Additional paid-in capital 288,530 288,530 Other comprehensive income 3,941 5,174 Retained earnings 272,835 349,196 --------------- --------------- 565,852 643,446 --------------- --------------- Total liabilities and stockholders' equity $ 1,297,190 $ 1,310,697 =============== =============== DANAOS CORPORATION Statement of Cash Flows (Expressed in thousands of United States dollars) Three months Three months ended March 31, ended March 31, -------------- -------------- 2006 2007 -------------- -------------- (unaudited) (unaudited) Cash Flows provided by/ (used in): Operating Activities: Net Earnings $ 21,483 $ 100,366 Adjustments to reconcile Net Earnings to Cash from Operating Activities: Depreciation 6,819 10,169 Amortization of deferred charges 1,157 1,547 Written off amount of deferred charges 259 284 Payments for dry-docking / special survey (3,359) (1,858) Change in fair value of debt and financial instruments 2,680 2,409 Loss / (Gain) on sale of vessels 0 (72,696) Accounts receivable (1,444) (691) Other assets short and long term (4,139) (6,925) Accounts payable and accrued liabilities 2,393 (3,421) Other liabilities short and long term 1,398 (2,017) -------------- -------------- Cash provided by operating activities 27,247 27,167 -------------- -------------- Investing Activities: Vessel acquisitions including advances (40,584) (55,751) Vessels under construction (136) (57,580) Proceeds from sale of vessels 0 161,487 -------------- -------------- Cash (used in)/ provided by Investing Activities (40,720) 48,156 -------------- -------------- Financing Activities: Debt draw downs 30,375 121,500 Debt repayment (11,064) (182,358) Contributions 0 0 Dividends on common shares 0 (24,005) Deferred costs (416) (500) (Increase)/decrease in restricted cash 633 2,471 -------------- -------------- Cash provided by/ (used in) Financing Activities 19,528 (82,892) -------------- -------------- Net change in cash and cash equivalents 6,055 (7,569) -------------- -------------- Cash and cash equivalents, beginning of period 38,000 43,075 -------------- -------------- Cash and cash equivalents, end of period $ 44,055 $ 35,506 ============== ============== Supplementary Cash Flow information Cash paid for interest 7,172 11,232 Non-cash capitalized interest on vessels under construction 1,746 0 Non-cash value on vessel acquisition 14,416 14,416 Three months Three months ended March 31, ended March 31, -------------- -------------- 2006 2007 -------------- -------------- (unaudited) (unaudited) Reconciliation of Net Income to EBITDA (unaudited) Net Income $ 21,483 $ 100,366 Depreciation 6,819 10,169 Amortization of deferred charges 1,123 1,504 Interest income (1,136) (1,263) Interest Expense 7,136 5,849 -------------- -------------- EBITDA (unaudited) $ 35,425 $ 116,625 ============== ============== (1) EBITDA represents net income before interest, income tax expense, depreciation and amortization. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that EBITDA is useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that EBITDA is useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity.
Contact Information: For further information please contact: Company Contact: Dimitri Andritsoyiannis Chief Financial Officer Danaos Corporation Athens, Greece Tel: +30 210 419 6481 E-Mail: cfo@danaos.com Iraklis Prokopakis Chief Operating Officer Danaos Corporation Athens, Greece Tel. +30 210 419 6400 E-Mail: coo@danaos.com Investor Relations and Financial Media: Nicolas Bornozis President Capital Link, Inc. New York Tel. 212-661-7566 E-Mail: nbornozis@capitallink.com