-- A book loss of approximately $18.2 million associated with the sale of the M/V Pierre and M/V Juneau. -- An impairment loss of $116.4 million associated with the write down of the Company's tanker vessels to their fair market values. -- A gain of $1.3 million associated with the change in the fair value of the interest rate swaps. -- Excluding the above items Net loss for the fourth quarter of 2009 would be $2.6 million or $0.02 per share. -- EBITDA(1) for the year ended December 31, 2009 was $55.5 million as adjusted for the effect of the loss from the sale of vessels and impairment loss.Anthony Kandylidis, the Company's Chief Executive Officer, commented: "We are pleased to have put behind us a very challenging 2009. The impairment loss on our tanker fleet is the last piece of the puzzle in cleaning up OceanFreight's balance sheet. Going forward we have created the foundation for positive earnings per share for our shareholders. With operating results in line with expectations and the dramatic improvement in our fleet age profile we are entering 2010 with strong optimism. Our secured cash flows and our proven access to tap the capital markets put us in a unique position to take advantage of the low point in the shipping cycle."
Fleet Developments -- On December 9, 2009, the Company took delivery of the M/V Cohiba, a 2006-built 174,200 dwt Capesize drybulk carrier, for a total cost of $61.9 million. Upon delivery, the vessel commenced fixed rate employment for a five year minimum period at a gross daily rate of $26,250. -- On December 11, 2009, we agreed to sell the M/V Pierre to a third party for a gross sale price of $22.6 million, resulting in a loss of approximately $17.4 million. The vessel is scheduled to be delivered to its new owners between March 1, 2010 and April 15, 2010. -- In addition, as previously announced, the Company has entered into an agreement to purchase a 2005-built 180,263 dwt Capesize drybulk carrier, to be renamed M/V Montecristo, for a purchase price of $49.5 million. We expect to take delivery of the M/V Montecristo in the second quarter of 2010 following which it will commence on time charter employment for a minimum period of four years at a gross daily rate of $23,500. -- Upon completion of the above transactions, our fleet will consist of 13 vessels, comprised of nine dry bulk carriers (4 Capesizes, 5 Panamaxes) and 4 tankers (1 Suezmax, 3 Aframaxes) with a combined deadweight tonnage of approximately 1.5 million tons and a weighted average age of approximately 10.8 years.Fourth Quarter 2009 Results For the fourth quarter ended December 31, 2009, Voyage Revenues amounted to $28.2 million, Operating Loss amounted to $132.7 million which includes the effect of the loss from the sale of vessels of $18.2 million and impairment loss of $116.4 million. Net Loss amounted to $135.9 or $(0.98) per share. EBITDA(1) for the fourth quarter of 2009 was $11.4 million as adjusted for the effect of the loss from the sale of vessels and impairment loss. An average of 12.3 vessels were owned and operated during the fourth quarter of 2009, earning an average Time Charter Equivalent, or TCE rate, of $25,172 per day. Year Ended December 31, 2009 Results For the year ended December 31, 2009, Gross Revenue amounted to $118.5 million. Operating Loss was $164.9 million, which includes the effect of the loss from the sale of vessels of $69.3 million and impairment loss of $116.4 million. Net Loss amounted to $179.4 million or $(2.28) per share. EBITDA(1) for the year was $55.5 million as adjusted for the effect of the loss from the sale of vessels and impairment loss. An average of 12.7 vessels were owned and operated during the year 2009, earning an average Time Charter Equivalent, or TCE, rate of $28,523 per day. Capitalization On December 31, 2009, debt (debt, net of deferred financing fees) to total capitalization (debt and stockholders' equity) ratio was 50.8% and net debt (debt less cash, cash equivalents and restricted cash) to total capitalization ratio was 41.9%. Financing As of the date of this release we have raised approximately $98.2 million in net proceeds under the current Standby Equity Distribution Agreement with YA Global Master SPV ltd., an affiliate of Yorkville Advisors. The proceeds of this offering together with the existing loan facilities are expected to be sufficient to finance the vessel acquisitions announced to date. As of the date of this release the Company has 181,800,001 shares outstanding. Liquidity As of December 31, 2009, the Company had total liquidity of approximately $46.3 million including restricted cash. (1) Please see later in this release for a reconciliation of adjusted EBITDA to net cash provided by Operating activities.
Fleet Data
(Dollars in thousands, except
Average Daily results - unaudited) Three months Ended Year Ended
December 31, December 31,
------------------ ------------------
2008 2009 2008 2009
-------- -------- -------- --------
Average number of vessels (1) 12.7 12.3 11.4 12.7
-------- -------- -------- --------
Total voyage days for fleet (2) 1,135 1,125 4,125 4,466
-------- -------- -------- --------
Total calendar days for fleet (3) 1,166 1,131 4,164 4,650
-------- -------- -------- --------
Time charter equivalent (5) $ 32,815 $ 25,172 $ 34,705 $ 28,523
-------- -------- -------- --------
Fleet utilization (4) 97.3% 99.5% 99.1% 96.1%
-------- -------- -------- --------
(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.
(3) Calendar days are the total 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 rate, 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 gross 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.
The following table reflects the calculation of our TCE rates for the
periods then ended:
(Dollars in thousands, except Three months Ended Year Ended
Average Daily results - unaudited) December 31, December 31,
------------------ ------------------
2008 2009 2008 2009
-------- -------- -------- --------
Gross revenue 38,863 29,412 157,434 132,935
-------- -------- -------- --------
Voyage expenses (1,618) (1,094) (14,275) (5,549)
-------- -------- -------- --------
Time charter equivalent 37,245 28,318 143,159 127,386
-------- -------- -------- --------
-------- -------- -------- --------
Total voyage days for fleet 1,135 1,125 4,125 4,466
-------- -------- -------- --------
Time charter equivalent (TCE) rate $ 32,815 $ 25,172 $ 34,705 $ 28,523
-------- -------- -------- --------
Financial Statements
The following are OceanFreight Inc.'s Consolidated Statements of Operations
for the three-month periods and the years ended December 31, 2008 and 2009:
(Dollars in thousands, Three Months Ended
except for share and December 31, Year Ended December 31,
per share data) ------------------------ ------------------------
2008 2009 2008 2009
----------- ----------- ----------- -----------
STATEMENT OF OPERATIONS
DATA (unaudited) (unaudited) (audited) (unaudited)
Voyage revenues $ 36,269 $ 28,228 $ 147,116 $ 118,462
Gain /(loss) on forward
freight agreements - (263) - 570
Imputed revenue 2,594 1,184 10,318 14,473
----------- ----------- ----------- -----------
Gross revenue 38,863 29,149 157,434 133,505
Voyage expenses (1,618) (1,094) (14,275) (5,549)
Vessels operating
expenses (8,442) (9,771) (26,387) (39,063)
Depreciation (12,629) (10,715) (43,658) (49,182)
Management fees (831) (1,361) (2,593) (4,852)
General and
administrative
expenses (3,495) (4,322) (9,127) (8,540)
Dry docking costs (736) - (736) (5,570)
Loss from sale of
vessels - (18,150) - (69,250)
Impairment on vessels - (116,431) - (116,431)
----------- ----------- ----------- -----------
Operating income / (loss) 11,112 (132,695) 60,658 (164,932)
----------- ----------- ----------- -----------
Interest income 91 17 776 271
Interest expense and
finance costs (5,437) (4,485) (17,565) (19,834)
Gain/(loss) on
derivative instruments (17,333) 1,272 (16,147) 5,098
----------- ----------- ----------- -----------
Net income/(loss) $ (11,567) $ (135,891) $ 27,722 $ (179,397)
=========== =========== =========== ===========
Basic and fully diluted
loss per share $ (0.65) $ (0.98) $ 1.94 $ (2.28)
Weighted average common
and subordinated
shares 17,754,797 138,395,248 14,321,471 78,556,327
The following are OceanFreight Inc.'s Consolidated Balance Sheets as at
December 31, 2008 and 2009
(Dollars in thousands, except per share data)
2008 2009
----------- -----------
ASSETS (audited) (unaudited)
CURRENT ASSETS:
Cash and cash equivalent $ 23,069 $ 37,272
Restricted cash - 2,500
Receivables 2,073 2,254
Inventories 1,338 1,158
Prepayments and other 2,197 4,753
Vessel held for sale - 22,580
----------- -----------
Total current assets 28,677 70,517
----------- -----------
FIXED ASSETS, NET:
Advances for vessel acquisition - 9,900
Vessels, net of accumulated depreciation of
$56,837 and $223,577, respectively 587,189 450,742
Other, net of accumulated depreciation of $31 and
$123, respectively 159 856
----------- -----------
Total fixed assets, net 587,348 461,498
----------- -----------
OTHER NON-CURRENT LIABILITIES
Deferred financing fees, net of accumulated
amortization of $1,634 and $2,378, respectively 2,081 1,362
Restricted cash 6,511 6,511
Other 953 9,725
----------- -----------
Total assets 625,570 549,613
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Account payable 1,767 2,394
Due to related parties 111 500
Accrued liabilities 9,731 11,219
Unearned revenue 1,822 1,323
Derivative liability 6,771 7,443
Sellers' credit 25,000 -
Current portion of imputed deferred revenue 10,290 1,558
Current portion of long-term debt 60,889 47,030
----------- -----------
Total current liabilities 116,381 71,467
=========== ===========
NON-CURRENT LIABILITIES:
Derivative liability, net of current portion 9,376 3,606
Imputed deferred revenue, net of current portion 5,741 -
Long-term debt, net of current portion 247,111 218,644
----------- -----------
Total non-current liabilities 262,228 222,250
=========== ===========
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' EQUITY:
Preferred shares, par value $0.01; 5,000,000
shares authorized, none issued - -
Common Shares, par value $0.01; 1,000,000,000
shares authorized, 18,544,493 and 158,450,001
shares issued and outstanding as of December 31,
2008 and 2009, respectively 185 1,584
Subordinated Shares, par value $0.01; 10,000,000
shares authorized, none issued - -
Additional paid-in capital 271,824 458,757
Accumulated deficit (25,048) (204,445)
----------- -----------
Total stockholders' equity 246,961 255,896
----------- -----------
Total liabilities and stockholders' equity 625,570 549,613
=========== ===========
Adjusted EBITDA Reconciliation
OceanFreight Inc. considers EBITDA to represent net income before interest,
taxes, depreciation and amortization. Adjusted EBITDA excludes loss on sale
of vessels and impairment on vessels. EBITDA and Adjusted EBITDA do not
represent and should not be considered as an alternative to net income or
cash flow from operations, as determined by U.S. GAAP and our calculation
of EBITDA may not be comparable to that reported by other companies.
Adjusted EBITDA is included in this earnings release because it is a basis
upon which we assess our liquidity position, because it is used by our
lenders as a measure of our compliance with certain loan covenants and
because we believe that it presents useful information to investors
regarding our ability to service and/or incur indebtedness.
The following table reconciles net cash provided by operating activities to
EBITDA as adjusted for the effect of the loss from the sale of vessels and
impairment loss:
Three Months Ended Year Ended
December 31, December 31,
2008 2009 2008 2009
Net Cash provided by operating activities
Net cash from operating activities 12,970 6,314 82,309 26,552
Net increase in operating assets 2,293 (1,652) 3,941 11,329
Net (increase)/decrease in operating
liabilities 672 2,453 (5,865) (1,198)
Net interest expense 5,346 4,468 16,789 19,563
Amortization of deferred financing costs
included in interest expense (119) (169) (475) (744)
------ ------ ------ ------
Adjusted EBITDA 21,162 11,414 96,699 55,502
====== ====== ====== ======
Fleet List
The table below describes our fleet and current employment profile as of
February 22, 2010:
Current Gross Rate Earliest Latest Year Built DWT Type Employment per Day
Redelivery Redelivery
Gross
Vessel Year Curent Rate Earliest Latest
Name Built DWT Type Employment per Day Redelivery Redelivery
----- ------- -------- ---------- ------- ---------- ----------
Drybulk
Carriers
M/V
Robusto 2006 173,949 Capesize TC 26,000 Aug-14 Dec-14
M/V Cohiba 2006 174,200 Capesize TC 26,250 Oct-14 Feb-15
M/V
Partagas 2004 173,880 Capesize TC 27,500 Jul-12 Dec-12
M/V Topeka
(1) 2000 74,710 Panamax TC 18,000 Jan-11 Mar-11
M/V Helena 1999 73,744 Panamax TC 32,000 May-12 Jan-13
M/V
Augusta 1996 69,053 Panamax TC 16,000 Nov-11 Mar-12
M/V Austin 1995 75,229 Panamax TC 26,000 Mar-10 Aug-10
M/V Trenton 1995 75,229 Panamax TC 26,000 Apr-10 Aug-10
Tanker Vessels
M/T Olinda 1996 149,085 Suezmax POOL - - -
M/T Pink
Sands 1993 93,723 Aframax TC 27,450 Oct-10 Jan-11
M/T Tigani 1991 95,951 Aframax POOL - - -
M/T Tamara 1990 95,793 Aframax TC 27,000 Dec-11 Mar-11
Drybulk Carrier
to be Sold
M/V Pierre 1996 70,316 Panamax TC 23,000 Mar-10 Apr-10
Drybulk
Carrier
to be
Acquired
M/V
Montecristo 2005 180,263 Capesize TC 23,500 Apr-14 Sep-14
Conference Call and Webcast: Tuesday, February 23, 2010 at 08:30 A.M. EST
OceanFreight management team will host a conference call tomorrow, on
February 23, 2010, at 08:30 A.M. Eastern Standard Time (EST) to discuss the
Company's financial results for the Quarter and Year ended December 31,
2009.
Conference Call details:
Participants should Dial-Into the call 10 minutes before the scheduled time
using the following numbers: 1 866 819 7111 (U.S. Toll Free Dial -In), 0800
953 0329 (U.K. Toll Free Dial -In) or +44 (0) 1452 542 301 (Standard
International Dial -In). Please quote "OceanFreight."
A telephonic replay of the conference call will be available until March 2,
2010 by dialing 1 866 247 4222 (U.S. Toll Free Dial -In), 0800 953 1533
(U.K. Toll Free Dial -In) or +44 (0) 1452 550 000 (Standard International
Dial -In). Access Code: 7445162#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the OceanFreight Inc. website (www.oceanfreightinc.com). Participants to
the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
About OceanFreight Inc.
OceanFreight Inc., is an owner and operator of both drybulk and tanker
vessels that operate worldwide. As of the date of this release,
OceanFreight owns a fleet of 13 vessels, comprised of 9 drybulk vessels (3
Capesize, 6 Panamaxes) and 4 crude carrier tankers (1 Suezmax, 3 Aframaxes)
with a combined deadweight tonnage of about 1.4 million tons.
OceanFreight Inc.'s common stock is listed on the NASDAQ Global Market
where it trades under the symbol "OCNF." Visit our website at
www.oceanfreightinc.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 OceanFreight 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, OceanFreight
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 charter hire rates and vessel values, changes in
demand that may affect attitudes of time charterers to scheduled and
unscheduled drydocking, changes in OceanFreight 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
OceanFreight Inc. with the U.S. Securities and Exchange Commission.
Contact Information: Investor Relations/Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel: +1-212-661-7566 E-mail: oceanfreight@capitallink.com