-- Declared a cash dividend of $0.20 per share for the third quarter of
2010.
-- Reported third quarter net loss of $0.5 million or $0.03 per share.
-- Earned average Time Charter Equivalent ('TCE') of $21,554 per day for
the two Very Large Crude Carriers ('VLCCs') and $18,867 per day for
the three Suezmaxes in the Company's fleet.
-- Employed four vessels out of its five vessel fleet with Shell
Trading & Shipping Co. ('Shell') under spot index related time charter
agreements.
Crude Carriers Corp. ("Crude Carriers" or the "Company") today reported its
financial results and declared a cash dividend of $0.20 per share for the
third quarter of 2010.
The Company's net loss for the quarter was $0.5 million or $0.03 per basic
and diluted share, principally as a result of the weaker spot crude tanker
market environment that prevailed throughout the quarter. Gross revenues
amounted to $14.9 million for the quarter, including $0.2 million of profit
sharing revenues. Specifically, the average TCE earnings for the Company's
VLCC and Suezmax vessels on operations during the quarter were $21,554 and
$18,867 per day, respectively. During the quarter the Company employed on
average 2.2 vessels under the Shell spot index-related time charter.
Total expenses for the quarter amounted to $14.0 million, of which $5.8
million were voyage expenses, comprised mostly of bunker costs, and $3.3
million were operating expenses. General and administrative expenses were
$1.0 million for the quarter, including a non-cash item of $0.2 million
related to the equity compensation expense.
Net interest expense and finance cost for the quarter was $1.4 million,
principally relating to the $134.6 million outstanding debt during the
third quarter of 2010, drawn under our $200.0 million revolving credit
facility.
Quarterly Dividend of $0.20 per share
The Company's dividend policy, as described in the listing prospectus, is
to pay a variable quarterly dividend based on its cash available for
distribution, which represents net cash flow generated by its vessels
trading in the spot crude tanker market during the previous quarter, less
any amount required to maintain a reserve that its Board of Directors (the
"Board") determines from time to time as appropriate for the operation and
future growth of the fleet.
The Company generated approximately $3.2 million in cash available for
distribution during the quarter and its Board declared a cash dividend of
$0.20 per share for the period of July 1, 2010 to September 30, 2010. The
cash dividend is payable on December 7, 2010 to all shareholders of record
on November 24, 2010.
Cash available for distribution is a non US GAAP financial measure and is
discussed in more detail in Appendix A of this press release and in the
Company's second quarter 2010 earnings release.
Crude Tanker Market Overview
Crude spot market rates remained depressed for most of the third quarter,
as seasonally weaker demand coincided with the return of a number of crude
tankers to the spot market, which were previously deployed in the storage
business.
This resulted in the availability of a large number of vessels in the
trading areas of particular interest to the Company, as it is reflected by
the Baltic Dirty Tanker Route 3 ('TD3') (Middle Eastern Gulf-Japan) and the
Baltic Dirty Tanker Route 5 ('TD5') (West Africa - US East Coast) indices,
which averaged approximately $16,332 per day and $8,537 per day,
respectively, for the quarter.
Employed Fourth Vessel to Shell under Spot Related Time Charter
The Company agreed to employ the VLCC vessel M/T 'Achilleas' (297,863 dwt,
built 2010, Universal Shipbuilding, Japan) under a spot index-related time
charter for a period of approximately 12 months (+/- 30 days) commencing on
September 9, 2010. Under the terms of the spot index-related time charter
agreement, the minimum base rate received by the vessel will be the monthly
average of the Baltic Dirty Tanker Route 3 ('TD3') (Middle Eastern Gulf -
Japan) index, one of the main spot VLCC trading routes. The charter is also
subject to a profit sharing arrangement, settled quarterly, allowing the
Company to receive 50 percent of any additional revenues earned by the
vessel in excess of the index related minimum base rate over the period of
the actual voyage.
With the employment of the M/T 'Achilleas' under this arrangement, four out
of the Company's five vessels are now trading under index-related time
charter arrangements with Shell, which provide exposure to the tanker spot
market, ensuring high fleet utilization and reflects the Company's
continued ability to leverage its network of relationships with oil majors.
Equity Incentive Plan
On August 31, 2010, the Company completed the allocation of its first
management incentive award, in accordance with the terms of the Company's
2010 Equity Incentive Plan dated March 1, 2010 (the "Equity Plan"). The
award is comprehensive in its breadth and depth, with the Company having
issued a total of 394,400 (or 2.5% of the Company's stock as of September
30, 2010) of the 400,000 common shares approved for issuance by the Board,
with the majority of issued shares vesting after 3 years from the date of
issue. Awards were issued to all members of the Company's Board and of its
manager Capital Ship Management Corp., as well as to employees of key
affiliates, all of whom play a significant role in the daily commercial and
technical management of the Company's vessels. For additional information
regarding the Equity Plan please refer to the description included in the
Company's registration statement on Form F-1 dated March 11, 2010.
Management Commentary:
Mr. Evangelos Marinakis, the Company's CEO, commented: "Third quarter crude
tanker rates were amongst the lowest the industry has experienced over the
last 10 years. Nevertheless, our Board of Directors declared a $0.20
dividend per share, as our minimal leverage policy and efficient technical
operations allow us to enjoy a low cash breakeven point and to pay
substantial dividends even in a depressed market environment. Overall, we
believe that the medium- to long-run industry fundamentals of the crude
tanker market remain positive, as demand for crude oil and crude tankers
has resumed a positive trajectory in 2010, which is expected to continue to
grow into 2011.
"Having expanded our strategic partnership with Shell by employing two of
our Suezmaxes and our two VLCCs under spot index related time charter
agreements with a 50 percent profit share element on the actual trading of
the vessels, we ensure that the Company will immediately benefit from any
market upturn. This arrangement further aligns the Company's revenues with
the spot tanker market performance. We remain committed to our strategy of
growing our fleet on an accretive basis and returning to our shareholders
all our available cash generated by deploying our vessels in the spot
market."
Conference Call and Webcast
Today, Friday, November 12, 2010 at 11:00 a.m. EST, the Crude Carriers
management team will hold a conference call, to discuss the financial
results.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: by dialing 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 "Crude Carriers".
A telephonic replay of the conference call will be available until August
17, 2010 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533
(UK Toll Free Dial In) or +44 (0)1452 55 00 00 (Standard International Dial
In). Access Code required for the reply is: 70469247#
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.crudecarrierscorp.com).
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
Forward Looking Statements
This press release may contain forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, without limitation,
statements with respect to the duration of any voyage charters under which
our vessels are employed, our outlook on the market and our expectations
with respect to our strategy and distributions to our shareholders and our
ability to grow our fleet, and are based on management's current
expectations and observations. Included among the important factors that,
in our view, could cause actual results to differ materially from the
forward looking statements contained in this press release are the
following: (i) conditions in the United States capital markets; (ii)
conditions affecting the crude spot market and the crude market generally;
and other factors listed from time to time under "Risk Factors" and other
sections of our public filings with the SEC including, without limitation,
Crude Carriers Corp.'s registration statement on Form F-1. We make no
prediction or statement about the performance of shares.
About Crude Carriers Corp.
Crude Carriers Corp. (
CRUDE CARRIERS CORP.
UNAUDITED CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS
(NOTES 1, 2)
(In thousands of U.S. Dollars, except number
of shares and earnings per share)
For the three month period For the nine month period
ended September 30, ended September 30,
-------------------------- --------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Revenues $ 14,921 $ 5,034 43,211 12,963
------------ ------------ ------------ ------------
Expenses:
Voyage expenses 5,567 1,853 17,440 3,525
Voyage expenses-
related party 183 - 450 -
Vessel operating
expenses 2,883 634 6,100 1,800
Vessel operating
expenses -related
party 391 135 695 405
General and
administrative
expenses 976 - 1,600 -
Vessel depreciation 4,006 839 7,311 2,518
------------ ------------ ------------ ------------
Operating income $ 915 $ 1,573 9,615 4,715
------------ ------------ ------------ ------------
Other income
(expense), net:
Interest expense
and finance cost (1,348) (125) (2,334) (408)
Interest and other
income 23 2 317 -
Foreign currency
(loss)/gain, net (87) (3) (52) 3
------------ ------------ ------------ ------------
Total other
expense, net (1,412) (126) (2,069) (405)
------------ ------------ ------------ ------------
Net (loss)/income $ (497) $ 1,447 $ 7,546 $ 4,310
============ ============ ============ ============
Net (loss)/income
per share (basic
and diluted): $ (0.03) $ 0.69 $ 0.63 $ 2.05
Weighted-average
number of shares
Common shares
(basic and
diluted) 13,500,000 - 9,791,209 -
Class B shares
(basic and
diluted) 2,105,263 2,105,263 2,105,263 2,105,263
Total shares (basic
and diluted) 15,605,263 2,105,263 11,896,472 2,105,263
CRUDE CARRIERS CORP.
UNAUDITED CONDENSED AND CONSOLIDATED BALANCE SHEETS (NOTE 1)
(In thousands of U.S. Dollars)
As of As of
September 30, December 31,
2010 2009
------------- -------------
ASSETS
Current assets
Cash and cash equivalents $ 12,576 $ 1
Trade accounts receivable 2,482 1,340
Due from related party - 1,878
Prepayments and other assets 666 45
Inventories 819 1,411
------------- -------------
Total current assets 16,543 4,675
------------- -------------
Fixed assets
Vessels, net 396,975 76,238
------------- -------------
Total fixed assets 396,975 76,238
Other non-current assets
Deferred charges, net 1,628 347
Restricted cash 5,000 -
------------- -------------
Total non-current assets 403,603 76,585
------------- -------------
TOTAL ASSETS $ 420,146 $ 81,260
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of credit facility $ 4,826 $ -
Current portion of related-party long-term debt - 3,161
Trade accounts payable 2,825 1,344
Due to related party 1,304 27
Accrued liabilities 2,707 569
Deferred revenue 837 -
------------- -------------
Total current liabilities 12,499 5,101
------------- -------------
Long-term liabilities
Credit facility 129,754 -
Long-term related-party debt - 29,299
------------- -------------
Total long-term liabilities 129,754 29,299
------------- -------------
Total liabilities 142,253 34,400
------------- -------------
Commitments and contingencies
Stockholders' equity
------------- -------------
Total stockholder's equity 277,893 46,860
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 420,146 $ 81,260
============= =============
CRUDE CARRIERS CORP.
UNAUDITED CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
(NOTE 1)
(In thousands of U.S. Dollars)
For the nine month period
ended September 30,
2010 2009
------------ ------------
Cash flows from operating activities:
Net income $ 7,546 $ 4,310
Adjustments to reconcile net income to net
cash provided by operating activities:
Vessel depreciation 7,311 2,518
Amortization of deferred charges 556 9
Equity compensation expense 192 -
Changes in operating assets and liabilities:
Trade accounts receivable (3,883) (1,071)
Due from related parties 1,878 (739)
Prepayments and other assets (774) (51)
Inventory (663) (246)
Trade accounts payable 2,535 (738)
Due to related parties (1,384) (1,634)
Accrued liabilities 2,076 13
Deferred revenue 837 -
------------ ------------
Net cash provided by operating activities 16,227 2,371
------------ ------------
Cash flow for investing activities:
Vessels' acquisition (399,161) -
Additions to restricted cash (5,000) -
------------ ------------
Net cash used in investing activities (404,161) -
------------ ------------
Cash flows from financing activities:
Proceeds from credit facility 134,580 -
Repayments of related party debt (791) (2,371)
Loans issuance costs (1,346)
Proceeds from issuance of common and class B
stock 278,545 -
Payment of Offering expenses (746) -
Commission paid for vessel acquisition (1,930) -
Dividends paid to stockholders (7,803) -
------------ ------------
Net cash provided by/(used in) financing
activities 400,509 (2,371)
------------ ------------
Net increase in cash and cash equivalents 12,575 -
Cash and cash equivalents at beginning of the
period 1 1
------------ ------------
Cash and cash equivalents at end of period $ 12,576 $ 1
------------ ------------
Supplemental Cash Flow Information
Cash paid for interest $ 1,008 $ 396
Non Cash Investing and Financing activities
Net liabilities assumed by CMTC upon
contribution of vessel to the Company 56,908 -
Difference of net book value of the M/T
Miltiadis M II over the cash consideration
paid to CMTC 4,158 -
Capital expenditures included in liabilities at
the end of the period. 137 -
Loan issuance costs included in liabilities at
the end of the period. 835 -
Notes
(1) The unaudited condensed and consolidated statements of operations and
cash flows for the nine-month period ended September 30, 2010 and for the
three and nine month periods ended September 30, 2009 include the results
of operations of M/T Miltiadis M II which was acquired from Capital
Maritime & Trading Corp. ("Capital Maritime"), an entity which prior to the
offering was under common control, on March 30, 2010, as though the
transfer had occurred at the beginning of the earliest period presented.
The unaudited condensed and consolidated balance sheet as of December 31,
2009 includes the balance sheets of Crude Carriers Corp. and the
vessel-owning company of the M/T Miltiadis M II.
(2) The Company considers the Class B shares as an equity recapitalization
and used the number of Class B shares of 2,105,263 to calculate earnings
per share, prior to the offering, for the three and nine month periods
ended September 30, 2009 and for the period from January 1, 2010 to March
16, 2010.
Appendix A - Reconciliation of Non-GAAP Financial Measure (In thousands of U.S. dollars) Description of Non-GAAP Financial Measure - Cash Available for DistributionDescription of Non-GAAP Financial Measure - Cash Available for Distribution Cash Available for Distribution is a quantitative standard used in the publicly-traded Companies to assist in evaluating a Company's ability to make quarterly cash distributions. Cash Available for Distribution is not required by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any other indicator of the Company's performance required by accounting principles generally accepted in the United States. We determine our Cash Available for Distribution as: Net income (loss)
plus - depreciation and amortization - non-cash items, - loan fees amortization - any write-offs or other non-recurring items less - any net income attributable to the historical results of vessels acquired by the company from Capital Maritime, our Manager. - any amount required to maintain a reserve that our board of directors determines from time to time is appropriate for the conduct and growth of the company's fleet.
Appendix A - Reconciliation of Non-GAAP Financial Measure - Continued (In thousands of U.S. dollars) Description of Non-GAAP Financial Measure - Cash Available for DistributionThe tables below reconcile net loss to Cash Available for Distribution for the three month period ended September 30, 2010
Reconciliation of Non-GAAP Financial For the three-month
Measure - Cash Available for distribution period ended
September 30, 2010
Net loss (497)
Add:
Depreciation 4,006
Other Non Cash Items 321
Less:
Recommended Reserves (630)
Cash Available for Distribution 3,200
Number of total shares outstanding 15,999,663
Dividend per Share 0.20
Contact Information: For further information please contact: Company contacts: Ioannis Lazaridis President Tel: +30 (210) 4584 950 E-mail: i.lazaridis@crudecarrierscorp.com Jerry Kalogiratos CFO Tel: +30 (210) 4584 950 E-mail: j.kalogiratos@crudecarrierscorp.com Investor Relations / Media: Nicolas Bornozis President Matthew Abenante Capital Link, Inc. 230 Park Avenue - Suite 1536 New York, NY 10169, USA Tel: (212) 661-7566 Fax: (212) 661-7526 E-mail: crudecarriers@capitallink.com www.capitallink.com