-- Net revenue for the third quarter of 2010 increased by 11% to
$40.8 million from $36.9 million during the same period in 2009.
-- Net income for the third quarter of 2010 decreased by 1% to
$22.0 million from $22.2 million during the same period in 2009.
-- EBITDA(1) for the third quarter of 2010 increased by 8% to
$28.6 million from $26.5 million during the same period in 2009.
-- Earnings per share for the third quarter 2010 equaled $0.33, calculated
on weighted average number of shares of 65,874,601, compared to $0.41
in the third quarter 2009, calculated on weighted average number of
shares of 54,512,014.
-- Declaration of a dividend of $0.15 per share for the third quarter
of 2010.
Summary of Nine Months Ended September 30, 2010 Results
-- Net revenue for the nine months ended September 30, 2010 decreased by
10% to $115.7 million from $128.0 million during the same period in
2009.
-- Net income for the nine months ended September 30, 2010 decreased by
45% to $78.5 million from $142.2 million during the same period in
2009.
-- EBITDA for the nine months ended September 30, 2010, decreased by 40%
to $95.5 million from $159.2 million during the same period in 2009.
-- Earnings per share for the nine months ended September 30, 2010 equaled
$1.26, calculated on weighted average number of shares of 62,431,775
compared to $2.61 in the nine months ended September 30, 2009,
calculated on weighted average number of shares of 54,509,508.
(1) EBITDA represents net income plus interest expense, tax, depreciation
and amortization. See "EBITDA Reconciliation".
Fleet and Employment Profile
The Company's operational fleet as of September 30, 2010, was comprised of
15 drybulk vessels with an average age of 3.80 years. The Company has
contracted for seven additional drybulk newbuild vessels with deliveries
scheduled at various times through 2013. The newbuilds consist of three
Post-Panamax, two Kamsarmax, one Panamax and one Capesize vessel.
As of November 1, 2010, the contracted employment of the Company's fleet
was 85% of fleet ownership days for the remaining days of 2010, 68% for
2011, 58% for 2012 and 52% for 2013, including vessels which will be
delivered to us in the future.
In August 2010, we entered into a new period time charter for the Kanaris,
a 177,000 dwt Capesize class vessel, for a minimum duration of 12 months
and a maximum duration of 14 months, at a gross daily charter rate of
$31,000, less 5% total commissions. Upon the completion of this new period
time charter, the vessel will commence a 20-year period time charter under
a contract the Company entered into in 2008.
In October 2010, we entered into a new period time charter for the Maria, a
76,000 dwt Panamax class vessel, for a duration of 34 months to 36 months,
with a forward delivery date in second quarter of 2011, at a gross daily
charter rate of $20,250 less 3.5% total commissions.
Dividend Declaration
The Company declared a cash dividend on its common stock of $0.15 per share
payable on or about November 26, 2010 to shareholders of record at the
close of trading of the Company's common stock on the New York Stock
Exchange (the "NYSE") on November 19, 2010.
The Company had 65,876,507 shares of common stock outstanding as of
November 1, 2010.
The Board of Directors of the Company is continuing a policy of paying out
a portion of the Company's free cash flow at a level it considers prudent
in light of the current economic and financial environment. The declaration
and payment of dividends, if any, will always be subject to the discretion
of the Board of Directors of the Company. The timing and amount of any
dividends declared will depend on, among other things: (i) our earnings,
financial condition and cash requirements and availability, (ii) decisions
in relation to our growth strategies, (iii) provisions of Marshall Islands
and Liberian law governing the payment of dividends, (iv) restrictive
covenants in our existing and future debt instruments and (v) global
financial conditions. We can give no assurance that dividends will be paid
in the future.
Management Commentary
Dr. Loukas Barmparis, President of the Company, said: "As we head towards
the year end our attention is focused on increasing our charter coverage
for future periods. Our charter coverage has reached 85% for the remainder
of this year and 68% for 2011. We believe our strong balance sheet provides
us with considerable financial flexibility. We continue to monitor market
condition for further acquisition opportunities. At the same time, we have
paid our tenth consecutive quarterly dividend, in line with our dividend
policy."
Conference Call
On Tuesday, November 9, 2010 at 09:00 A.M. EST, the Company's management
team will host a conference call to discuss the financial results.
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),
0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard
International Dial In). Please quote "Safe Bulkers" to the operator.
A telephonic replay of the conference call will be available until November
19, 2010 by dialing 1 (866) 247-4222 (US Toll Free Dial In), 0(800)
953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard
International Dial In). Access Code: 1859591#
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the conference
call, available through the Company's website (www.safebulkers.com).
Participants in the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
Management Discussion of Third Quarter 2010 Results
Net income decreased by 1% to $22.0 million for the third quarter of 2010
from $22.2 million for the third quarter of 2009. This decrease is mainly
attributable to the following factors:
Net revenues: Net revenues were $40.8 million for the third quarter of
2010, an 11% increase compared to $36.9 million for the third quarter of
2009. Net revenues increased due to an increase in operating days. The
Company operated 15.0 vessels on average during the third quarter of 2010,
earning a Time Charter Equivalent ("TCE")(2) rate of $29,605, compared to
13.2 vessels and a TCE rate of $30,113 during the third quarter of 2009.
The decrease in the TCE rate resulted mainly from lower time charter rates.
Vessel operating expenses: Vessel operating expenses increased 18% to $5.9
million for the third quarter of 2010, compared to $5.0 million for the
same period in 2009. The increase is mainly attributed to increased crew,
repairs, maintenance and spare parts costs. Such costs increased mainly due
to an increase in ownership days to 1,380 or 13% in the third quarter of
2010 from 1,218 in the third quarter of 2009, and higher drydocking costs
due to the timing of the drydock. Daily vessel operating expenses for the
same periods, increased by 4% to $4,294 for the third quarter 2010,
compared to $4,130 for the third quarter of 2009.
Early redelivery income/(cost): During the third quarter of 2010, we
recorded $0.2 million of early redelivery cost mainly related to the early
termination of a period time charter for our vessel Maria, versus $2.9
million of early redelivery income relating to the early termination of
period time charters of our vessels Pedhoulas Leader and Stalo for the same
period in 2009. Maria was redelivered early at our request on August 24,
2010, instead of November 30, 2010, the latest agreed redelivery date at
the charterer's option, as per the relevant charter party agreement. In
connection with the early redelivery of Maria, we paid cash compensation of
$0.2 million to the relevant charterer.
(Loss)/Gain on derivatives: Loss on derivatives decreased to $3.9 million
in the third quarter of 2010, compared to $6.0 million for the same period
in 2009, as a result of the mark-to-market valuation of the Company's
interest rate swap transactions that we employ to manage the risk and
interest rate exposure of our loan and credit facilities. These swaps
economically hedged the interest rate exposure of 89.6% of the Company's
aggregate loans outstanding for a weighted average remaining period of swap
contracts of 2.3 years as of September 30, 2010. The valuation of these
interest rate swap transactions at the end of each quarter is affected by
the prevailing interest rates at that time.
Depreciation: Depreciation increased to $5.2 million in the third quarter
of 2010, compared to $3.4 million for the same period in 2009, as a result
of the increase in the average number of vessels operated by the Company
during the third quarter of 2010.
Cash, time deposits & restricted cash: As of September 30, 2010, we had
$136.8 million in cash and short-term time deposits, $5.4 million in
long-term restricted cash and $50.0 million in a long-term floating rate
note. Additionally, we have $24.0 million in an undrawn loan commitment to
be secured by our vessel Panayiota K.
(2) Refer to definition of "TCE" in Note 6 of Fleet Data Table.
Management Discussion of the Nine Months Ended September 30, 2010 Results
Net revenues: Net revenues for the nine months ended September 30, 2010,
decreased by 10% to $115.7 million from $128.0 million during the same
period in 2009. The Company operated 14.4 vessels on average during the
first nine months of 2010, earning a TCE rate of $29,583, compared to 12.9
vessels and a TCE rate of $36,241 during the first nine months of 2009.
Net income: Net income for the nine months ended September 30, 2010, was
$78.5 million, a decrease of 45% from net income of $142.2 million in the
first nine months of 2009. The decrease of $63.7 million is mainly
attributed to: (i) early redelivery income of $0.1 million compared to
$75.0 million, (ii) zero loss on asset cancellations compared to $20.7
million, (iii) gain on sale of assets of $15.2 million, compared to none,
(iv) loss from derivatives of $13.0 million, compared to loss from
derivatives of $3.2 million and (v) net revenue of $115.7 million compared
to $128.0 million, during the first nine months of 2010 and 2009
respectively.
Unaudited Interim Financial Information and Other Data
SAFE BULKERS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three-Month Period Nine-Month Period
(In thousands of U.S. Ended September 30, Ended September 30,
Dollars, except for share ---------------------- ----------------------
and per share data) 2009 2010 2009 2010
---------- ---------- ---------- ----------
REVENUES:
Revenues 37,791 41,599 130,965 117,790
Commissions (885) (767) (2,927) (2,057)
Net revenues 36,906 40,832 128,038 115,733
EXPENSES:
Voyage expenses (261) (184) (480) (476)
Vessel operating expenses (5,030) (5,926) (14,408) (16,838)
Depreciation (3,409) (5,242) (9,952) (14,252)
General and administrative
expenses (1,774) (1,945) (5,502) (5,008)
Early redelivery
income/(expense)-net 2,887 (193) 74,951 132
Loss on asset
cancellations - - (20,699) -
Gain on sale of asset - - - 15,199
Operating income 29,319 27,342 151,948 94,490
OTHER (EXPENSE) / INCOME:
Interest expense (1,941) (1,754) (8,819) (4,771)
Other finance costs (143) (49) (391) (183)
Interest income 1,025 474 1,866 2,246
Loss on derivatives (6,006) (3,928) (3,175) (13,046)
Foreign currency
(loss)/gain (57) (16) 903 (6)
Amortization and write-off
of deferred finance
charges (38) (60) (86) (215)
Net income 22,159 22,009 142,246 78,515
Earnings per share 0.41 0.33 2.61 1.26
Weighted average number of
shares 54,512,014 65,874,601 54,509,508 62,431,775
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, September 30,
(In thousands of U.S. Dollars) 2009 2010
------------- -------------
ASSETS
Cash, time deposits & restricted cash 76,322 136,791
Restricted cash 6,392 -
Asset held for sale 16,969 -
Other current assets 5,965 3,822
Total fixed assets 467,513 590,448
Long-term investment 50,000 50,000
Restricted cash: non-current 4,763 5,423
Other non-current assets 800 950
Total assets 628,724 787,434
LIABILITIES AND EQUITY
Current portion of long-term debt 15,742 25,137
Liability directly associated with asset
held for sale 34,500 -
Other current liabilities 15,309 17,491
Long-term debt, net of current portion 420,994 472,070
Other non-current liabilities 44,960 49,887
Shareholders' equity 97,219 222,849
Total liabilities and equity 628,724 787,434
------------- -------------
Fleet Data
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2009 2010 2009 2010
-------- -------- -------- --------
FLEET DATA
Number of vessels at period end 14.00 15.00 14.00 15.00
Average age of fleet (in years) 3.54 3.80 3.54 3.80
Ownership days (1) 1,218 1,380 3,529 3,917
Available days (2) 1,217 1,373 3,520 3,896
Operating days (3) 1,202 1,372 3,505 3,870
Fleet utilization (4) 98.7% 99.4% 99.3% 98.8%
Average number of vessels in the
period (5) 13.24 15.00 12.93 14.35
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 30,113 $ 29,605 $ 36,241 $ 29,583
Daily vessel operating expenses (7) $ 4,130 $ 4,294 $ 4,083 $ 4,299
(1) Ownership days represent the aggregate number of days in a
period during which each vessel in our fleet has been owned by us.
(2) Available days represent the total number of days in a period
during which each vessel in our fleet was in our possession net of
off-hire days associated with scheduled maintenance, which includes
major repairs, drydockings, vessel upgrades or special or
intermediate surveys.
(3) Operating days represent the number of our available days in a
period less the aggregate number of days that our vessels are
off-hire due to any reason, excluding scheduled maintenance.
(4) Fleet utilization is calculated by dividing the number of our
operating days during a period by the number of our ownership days
during that period.
(5) Average number of vessels in the period is calculated by
dividing ownership days in the period by the number of days in that
period.
(6) Time charter equivalent rates, or TCE rates, represent our
charter revenues less commissions and voyage expenses during a
period divided by the number of our available days during the
period.
(7) Daily vessel operating expenses include the costs for crewing,
insurance, lubricants, spare parts, provisions, stores, repairs,
maintenance, statutory and classification expense, drydocking,
intermediate and special surveys and other miscellaneous items.
Daily vessel operating expenses are calculated by dividing vessel
operating expenses by ownership days for the relevant period.
EBITDA RECONCILIATION
(In thousands of U.S. Dollars)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2009 2010 2009 2010
--------- --------- --------- ---------
Net Income 22,159 22,009 142,246 78,515
Plus Net Interest Expense 916 1,280 6,953 2,525
Plus Depreciation 3,409 5,242 9,952 14,252
Plus Amortization 38 60 86 215
EBITDA 26,522 28,591 159,237 95,507
EBITDA represents net income before interest, income tax expense,
depreciation and amortization. EBITDA is not a recognized measurement under
US GAAP. EBITDA assists the Company's management and investors by
increasing the comparability of the Company's fundamental performance from
period to period and against the fundamental performance of other companies
in the Company's industry that provide EBITDA information. The Company
believes that EBITDA is useful in evaluating the Company's operating
performance compared to that of other companies in the Company's 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.
EBITDA has limitations as an analytical tool, and should not be considered
in isolation, or as a substitute for analysis of the Company's results as
reported under US GAAP. EBITDA should not be considered a substitute for
net income and other operations data prepared in accordance with US GAAP or
as a measure of profitability. While EBITDA is frequently used as a measure
of operating results and performance, it is not necessarily comparable to
other similarly titled captions of other companies due to differences in
methods of calculation.
Fleet Employment Profile as of November 1, 2010
Set out below is a table showing our existing vessels and their contracted
employment.
Charter
Year Rate (a)
Vessel Name DWT Built USD/day Charter Duration (b)
----------- ------- ------ ---------- ---------------------
17,750 Sep 2010 - Apr 2011
Maria 76,000 2003 20,250 Apr 2011 - Apr 2014
------- ------ ---------- ---------------------
Vassos 76,000 2004 29,000 Nov 2008 - Oct 2013
------- ------ ---------- ---------------------
15,500 Jun 2009 - Jan 2011
Katerina 76,000 2004 20,000 Mar 2011 - Mar 2014
------- ------ ---------- ---------------------
Maritsa 76,000 2005 28,000 (c) Mar 2010 - Mar 2015
------- ------ ---------- ---------------------
Pedhoulas Merchant 82,300 2006 27,250 Apr 2010 - Apr 2011
------- ------ ---------- ---------------------
Pedhoulas Trader 82,300 2006 41,500 (d) Aug 2008 - Jul 2013
------- ------ ---------- ---------------------
Pedhoulas Leader 82,300 2007 18,500 Jul 2009 - Nov 2010
------- ------ ---------- ---------------------
Stalo 87,000 2006 34,160 Mar 2010 - Feb 2015
------- ------ ---------- ---------------------
Marina 87,000 2006 41,500 (e) Dec 2008 - Dec 2013
------- ------ ---------- ---------------------
Sophia 87,000 2007 34,720 Oct 2008 - Sep 2013
------- ------ ---------- ---------------------
Eleni 87,000 2008 41,640 (f) Nov 2008 - Mar 2015
------- ------ ---------- ---------------------
Martine 87,000 2009 40,500 Feb 2009 - Feb 2014
------- ------ ---------- ---------------------
Andreas K 92,000 2009 20,500 Nov 2009 - Nov 2010
------- ------ ---------- ---------------------
Panayiota K 92,000 2010 22,750 Apr 2010 - Apr 2011
------- ------ ---------- ---------------------
31,000 Aug 2010 - Aug 2011
Kanaris 177,000 2010 25,928 Aug 2011 - Apr 2031
------- ------ ---------- ---------------------
(a) Either gross charter rate or average gross charter rate for charter
parties with variable rates among periods or for consecutive charter
parties with the same charterer under similar basic terms.
(b) Delivery / redelivery dates reflect the Company's best estimates.
Actual delivery / redelivery dates can differ pursuant to the terms of
the relevant charter contract.
(c) Five-year variable rate contract, first and second year at $32,000,
third year at $28,000, and fourth and fifth years at $24,000.
(d) Five-year variable rate contract, first year at $69,000, second year at
$56,500, third year at $42,000, and fourth and fifth years at $20,000.
(e) Five-year variable rate contract, $61,500 from Dec. 2008 to Mar. 2009,
$57,500 from Apr. 2009 to Dec. 2009, $52,500 from Dec. 2009 to
Dec. 2010, $42,500 from Dec. 2010 to Dec. 2011, $32,500 from Dec. 2011
to Oct. 2012, $31,500 from Oct. 2012 to Dec. 2012 and $21,500 from
Dec. 2012 to Dec. 2013.
(f) Three contracts in direct continuation, the first from Nov. 2008 to
Oct. 2009 at $70,000, the second from Oct. 2009 to Mar. 2010 at $66,400
and the third from Apr. 2010 to Mar. 2015 at $34,160.
The contracted charter coverage, including newbuilds, based on Company's
best estimate as of November 1, 2010, is:
2010 (remaining) 85%
2011 68%
2012 58%
2013 52%
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk transportation
services, transporting bulk cargoes, particularly coal, grain and iron ore,
along worldwide shipping routes for some of the world's largest users of
marine drybulk transportation services. The Company's common stock is
listed on the NYSE, where it trades under the symbol "SB". The Company's
current fleet consists of 15 drybulk vessels, all built post-2003, and the
Company has contracted to acquire seven additional drybulk newbuild vessels
to be delivered at various times through 2013.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in
Section 27A of the Securities Exchange Act of 1933, as amended, and in the
Section 21E of the Securities Act of 1934, as amended) concerning future
events, 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 have been correct. These statements involve
known and unknown risks and are based upon a number of assumptions and
estimates that 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 drybulk 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
obligations 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: Dr. Loukas Barmparis President Safe Bulkers, Inc. Athens, Greece Tel.: +30 (210) 899-4980 Fax: +30 (210) 895-4159 E-Mail: directors@safebulkers.com Investor Relations / Media Contact: 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: safebulkers@capitallink.com