ATHENS, Greece, July 31 /PRNewswire-FirstCall/ -- TOP Ships Inc.
(Nasdaq: TOPS) today announced its operating results for the second quarter
and first half of 2008.
For the three months ended June 30, 2008, the Company reported a net loss
of $5,589,000, or $0.22 per share, compared with net income of $7,276,000, or
$0.67 per share, for the second quarter of 2007. The weighted average numbers
of basic shares used in the computations were 25,182,389 and 10,825,912(1) for
the second quarter of 2008 and 2007, respectively. The results for the second
quarter of 2008 include net charges of $6,661,000, or $0.26 per share of
special items(2) that affected the Company's net results that are typically
excluded by securities analysts in their published estimates of the Company's
financial results, which are described in Appendix A to this release. For the
three months ended June 30, 2008, operating income was $7,078,000, compared
with operating income of $8,651,000 for the second quarter of 2007. Revenues
for the second quarter of 2008 were $76,687,000, compared to $75,289,000
recorded in the second quarter of 2007.
For the six months ended June 30, 2008, the Company reported a net loss of
$24,430,000, or $1.07 per share, compared with net income of $10,275,000, or
$0.95 per share, for the first half of 2007. The weighted average numbers of
basic shares used in the computations were 22,738,815 and 10,801,6121 for the
first half of 2008 and 2007, respectively. The results for the first half of
2008 include net charges of $23,109,000, or $1.02 per share of special items
that affected the Company's net results that are typically excluded by
securities analysts in their published estimates of the Company's financial
results, which are described in Appendix A to this release. For the six months
ended June 30, 2008, operating income was $4,644,000, compared with
$12,099,000 for the first half of 2007. Revenues for the six-month period
ended June 30, 2008 were $149,324,000, compared to $149,277,000 recorded in
the first half of 2007.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships
Inc., commented: 'We are pleased to see the Company returning to operating
profitability after posting losses in the preceding three quarters. We believe
that this proves that our strategy to diversify into the drybulk sector and to
further unwind our leasing contracts was successful. Moreover, during the
second quarter of 2008 we completed a number of transactions in order to
further enhance shareholders' value. The most notable events of the quarter
were:
-- The delivery of our last drybulk vessel, which completed the
diversification of the Company into the drybulk sector. We agreed to acquire
these vessels in July and August of 2007 and since then we have successfully
raised debt and equity capital in excess of $390 million to fund our capital
expenditures in the drybulk and the tanker sector.
-- The chartering arrangements of all our drybulk vessels are with major
charterers for periods between one and five years. These fixed rate charter
agreements significantly reduce any potential downside of the drybulk market
for the next years and provide stable operating cash-flows for the Company.
-- We entered into fixed rate charter agreements for all six of our
newbuilding product tankers with three major charterers for periods that range
between seven and ten years. These charters have been agreed on a bareboat
basis, which not only reduces our long-term market risk relating to the
vessels, but also eliminates the Company's operational risk for that period.
-- The private placement of 7.3 million common shares for aggregate net
proceeds of $51 million.
-- The agreement to sell five Suezmax tankers built between 1992 and 1996
for an aggregate sale price of $240 million. Two of the vessels have already
been delivered and the remaining three are expected to be delivered to their
new owners by the end of August 2008. The net proceeds of the sales of
approximately $90 million may be applied to acquisitions and general corporate
purposes.
-- Finally we are close to completing the termination of additional vessel
charter-in contracts in order to further reduce our future charter hire
expense.'
The following key indicators serve to highlight changes in the financial
performance of the Company's vessels during the second quarters and six-month
periods ended June 30, 2007 and 2008:
Suezmax Vessels
(In U.S. Dollars Three Months Ended Six Months Ended
unless otherwise June 30, June 30,
stated) 2007 2008 Change 2007 2008 Change
Total available
ship days 1,122 814 -27.5% 2,292 1,784 -22.2%
Total operating
days 1,016 646 -36.4% 2,100 1,370 -34.8%
Utilization 90.6% 79.4% -12.4% 91.6% 76.8% -16.2%
TCE(3) per ship
per day under
spot voyage
charter 42,106 42,670 1.3% 40,236 45,342 12.7%
TCE per ship per
day under time
charter 35,831 41,910 17.0% 35,481 40,209 13.3%
Average TCE 39,840 42,125 5.7% 38,595 42,653 10.5%
Other vessel
operating
expenses per
ship per day 8,371 11,750* 40.4% 8,300 13,730* 65.4%
Handymax Vessels
(In U.S. Dollars Three Months Ended Six Months Ended
unless otherwise June 30, June 30,
stated) 2007 2008 Change 2007 2008 Change
Total available
ship days 1,001 728 -27.3% 1,991 1,456 -26.9%
Total operating
days 933 667 -28.5% 1,844 1,288 -30.2%
Utilization 93.2% 91.6% -1.7% 92.6% 88.5% -4.5%
TCE per ship per
day under spot
voyage charter - 24,363 - - 24,259 -
TCE per ship per
day under time
charter 21,554 18,567 -13.9% 20,924 18,461 -11.8%
Average TCE 21,554 19,262 -10.6% 20,924 18,825 -10.0%
Other vessel
operating
expenses per
ship per day 6,190 8,898* 43.7% 6,382 9,843* 54.2%
Tanker Fleet
(In U.S. Dollars Three Months Ended Six Months Ended
unless otherwise June 30, June 30,
stated) 2007 2008 Change 2007 2008 Change
Total available
ship days 2,123 1,542 -27.4% 4,283 3,240 -24.4%
Total operating
days 1,949 1,313 -32.6% 3,944 2,658 -32.6%
Utilization 91.8% 85.1% -7.2% 92.1% 82.0% -10.9%
TCE per ship per
day under spot
voyage charter 42,106 38,846 -7.7% 40,236 43,068 7.0%
TCE per ship per
day under time
charter 25,585 27,176 6.2% 25,032 26,444 5.6%
Average TCE 31,086 30,511 -1.9% 30,333 31,106 2.6%
Other vessel
operating
expenses per
ship per day 7,343 10,404 41.7% 7,408 11,983 61.8%
Drybulk Fleet
(In U.S. Dollars Three Months Ended Six Months Ended
unless otherwise June 30, June 30,
stated) 2007 2008 Change 2007 2008 Change
Total available
ship days - 470 - - 860 -
Total operating
days - 466 - - 851 -
Utilization - 99.1% - - 99.0% -
TCE per ship per
day under spot
voyage charter - - - - - -
TCE per ship per
day under time
charter - 50,071 - - 50,559 -
Average TCE - 50,071 - - 50,559 -
Other vessel
operating
expenses per
ship per day - 5,409* - - 6,513* -
Total Fleet
(In U.S. Dollars Three Months Ended Six Months Ended
unless otherwise June 30, June 30,
stated) 2007 2008 Change 2007 2008 Change
Total available
ship days 2,123 2,012 -5.2% 4,283 4,100 -4.3%
Total operating
days 1,949 1,779 -8.7% 3,944 3,509 -11.0%
Utilization 91.8% 88.4% -3.7% 92.1% 85.6% -7.1%
TCE per ship per
day under spot
voyage charter 42,106 38,846 -7.7% 40,236 43,068 7.0%
TCE per ship
per day under
time charter 25,585 34,754 35.8% 25,032 33,852 35.2%
Average TCE 31,086 35,635 14.6% 30,333 35,824 18.1%
Other vessel
operating
expenses per
ship per day 7,343 9,237 25.8% 7,408 10,836 46.3%
General and
administrative
expenses per
ship per day** 2,631 3,706 40.9% 2,518 3,698 46.9%
* Other vessel operating expenses per ship per day for our Suezmax,
Handymax and Drybulk vessels for the second quarter of 2008 include
approximately $392, $861 and $0, respectively, and for the first half
of 2008 include approximately $3,043, $1,241 and $408, respectively,
for specific unexpected repairs.
** General and Administrative expenses per ship per day include
approximately $138 and $324 for the three-month period and $178 and
$323 for the six-month period ended June 30, 2007 and 2008,
respectively, of non-cash restricted stock expense, specific legal fees
and depreciation for other fixed assets.
(1) Adjusted for our 1:3 reverse stock split effective in March 2008.
(2) See Appendix A to this release for information about special items.
(3) Time charter equivalent rate, or TCE rate, is a measure of the average
daily revenue performance of a vessel on a per voyage basis. Our
method of calculating TCE rate is consistent with industry standards
and is determined by dividing time charter equivalent revenues or TCE
revenues by voyage days for the relevant time period. TCE revenues are
revenues minus voyage expenses. 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 revenues and TCE rate non-GAAP
measures, provide additional meaningful information in conjunction
with shipping revenues, the most directly comparable GAAP measure,
because it assists Company's management in making decisions regarding
the deployment and use of its vessels and in evaluating their
financial performance.
Fleet Report:
As of June 30, 2008, the Company's fleet consisted of 21 vessels, or 1.9
million dwt (including 11 owned and 10 vessels sold and leased back for a
period of five to seven years) as compared to 23 vessels, or 2.3 million dwt
on June 30, 2007 (including 9 owned and 14 vessels sold and leased back for a
period of 5 to 7 years).
In June 2008, the Company entered into agreements to sell five Suezmax
tankers (M/T Stormless, M/T Edgeless, M/T Ellen P., M/T Limitless and M/T
Endless) to unrelated third parties for a total consideration of $240.0
million. The M/T Stormless was delivered to its new owners on June 26, 2008
and a gain from the sale of $1.8 million was recognized upon that vessel's
delivery. The M/T Edgeless was delivered to its new owners on July 10, 2008
and a gain from the sale of approximately $2.9 million will be recognized in
the third quarter of 2008. The remaining three vessels are expected to be
delivered to their new owners by the end of August 2008. A gain from these
sales of approximately $16.6 million will be recognized upon these vessels'
deliveries.
Fleet Deployment:
During the second quarter of 2008, the Company had approximately 78% of
the fleet's operating days on long-term employment contracts.
