- Net loss of $0.93 per share, including special items of $0.83 per share
- New time charter agreements for three dry-bulk vessels
- New employment agreements for all newbuilding vessels
ATHENS, Greece, June 12 /PRNewswire-FirstCall/ -- TOP Ships Inc.(Nasdaq: TOPS) today announced its operating results for the first quarterended March 31, 2008.
For the three months ended March 31, 2008, the Company reported net lossof $18,841,000, or $0.93 per share, compared with net income of $2,999,000, or$0.28 per share, for the first quarter of 2007. The weighted average numbersof basic shares used in the computations were 20,295,240 and 10,777,043 forthe first quarter of 2008 and 2007, respectively. The results for the firstquarter of 2008 and 2007 include net charges of $16,737,000, or $0.83 pershare and net revenues of $980,000, or $0.09 per share, respectively, ofspecial items(1) that affected the Company's net results for the first quarterof 2008 and 2007 that are typically excluded by securities analysts in theirpublished estimates of the Company's financial results, which are described inAppendix A of this release. For the three months ended March 31, 2008,operating loss was $2,434,000, compared with operating income of $3,448,000for the first quarter of 2007. Revenues for the first quarter of 2008 were$72,637,000, compared to $73,988,000 recorded in the first quarter of 2007.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP ShipsInc., commented:
'In the first quarter of 2008 we had a net loss of $0.93 per share,including special items of $0.83 per share, consisting of cash and non-cashcharges. The special cash charges we incurred were mainly a result ofunplanned repairs on some of our vessels. Three of these vessels (Faultless,Noiseless and Bertram), which caused the majority of these unplanned cashexpenses, were sold and delivered to new owners during the first and earlysecond quarters.
We expect to recover approximately $6,500,000 from our insuranceunderwriters during the second, third and fourth quarters of 2008 with respectto these and previous unexpected repairs, that will significantly offset thesecharges.
The special non-cash charges we incurred relate mostly to the change offair value of swaps that was caused by the significant decrease of theinterest rates in the first quarter. All special items are described in theAppendix of this earnings release.
Consistent with our strategy to operate a fleet with a balanced employmentprofile, and in order to further reduce our spot market exposure, we concludeda number of significant time charter arrangements for our dry-bulk and tankervessels.
Regarding our dry-bulk fleet, we have previously announced the timecharter arrangements for the Cyclades and Astrale at $50,860 net per day forthree years and $67,500 net per day for one year respectively. In addition, wehave recently agreed to charter the Pepito for a period of five years at a netdaily rate of $38,950. Finally we have agreed to extend the bareboat charterof the Voc Gallant after its current expiration in May 2009. The extendedagreement will have an additional period of three years at a net dailybareboat rate of $23,580.
Regarding our tanker fleet, we have recently concluded charteringagreements for all six of our newbuilding product tankers with three majorcharterers. The new charter periods range between seven and ten years at dailyrates between $14,300 and $14,550 on a bareboat basis. Since in bareboatagreements the charterers are responsible for the operating, maintenance andother administrative expenses, we estimate that the daily rates for thesebareboat charters to be in excess of $21,500 for the period, on a time charterequivalent basis.
Finally we are continuing our efforts to unwind additional charter-incontracts in order to further reduce our leasing expenditure.'
(1) See Appendix A to this release for information about special items
The following key indicators serve to highlight changes in the financialperformance of the Company's vessels during the first quarters of 2007 and2008:
Suezmax Vessels (In U.S. Dollars unless Three Months Ended March 31, otherwise stated) 2007 2008 Change Total available ship days 1,170 970 -17.1% Total operating days 1,084 724 -33.2% Utilization 92.6% 74.6% -19.4% TCE(2) per ship per day under spot voyage charter 38,565 47,548 23.3% TCE per ship per day under time charter 35,123 38,574 9.8% Average TCE 37,428 43,123 15.2% Other vessel operating expenses per ship per day 8,231* 15,391* 87.0%
Handymax Vessels (In U.S. Dollars unless Three Months Ended March 31, otherwise stated) 2007 2008 Change Total available ship days 990 728 -26.5% Total operating days 911 621 -31.8% Utilization 92.0% 85.3% -7.3% TCE per ship per day under spot voyage charter - 16,000 - TCE per ship per day under time charter 20,279 18,360 -9.5% Average TCE 20,279 18,356 -9.5% Other vessel operating expenses per ship per day 6,576 10,789* 64.1%
Tanker Fleet (In U.S. Dollars unless Three Months Ended March 31, otherwise stated) 2007 2008 Change Total available ship days 2,160 1,698 -21.4% Total operating days 1,995 1,345 -32.6% Utilization 92.4% 79.2% -14.2% TCE per ship per day under spot voyage charter 38,565 47,462 23.1% TCE per ship per day under time charter 24,467 25,746 5.2% Average TCE 29,597 31,688 7.1% Other vessel operating expenses per ship per day 7,473 13,418 79.6%
Drybulk Fleet (In U.S. Dollars unless Three Months Ended March 31, otherwise stated) 2007 2008 Change Total available ship days - 390 - Total operating days - 385 - Utilization - 98.7% - TCE per ship per day under spot voyage charter - - - TCE per ship per day under time charter - 51,151 -
Average TCE - 51,151 - Other vessel operating expenses per ship per day - 7,842* -
Total Fleet (In U.S. Dollars unless Three Months Ended March 31, otherwise stated) 2007 2008 Change Total available ship days 2,160 2,088 -3.3% Total operating days 1,995 1,730 -13.3% Utilization 92.4% 82.9% -10.3% TCE per ship per day under spot voyage charter 38,565 47,462 23.1% TCE per ship per day under time charter 24,467 32,927 34.6% Average TCE 29,597 36,019 21.7% Other vessel operating expenses per ship per day 7,473 12,376 65.6% General and administrative expenses per ship per day** 2,406 3,690 53.3%
(2) 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.
* The daily Other vessel operating expenses for the Suezmax, Handymax and Drybulk Vessels for the first quarter of 2007 include approximately $332, $0 and $0, respectively, and for the first quarter of 2008 include approximately $5,269, $1,621 and $890, respectively, for specific unexpected repairs.
** The daily General and Administrative expenses include approximately $218 and $322 for the first quarter of 2007 and 2008, respectively, of non-cash restricted stock expense, specific legal fees and depreciation for other fixed assets.
Fleet Report:
As of March 31, 2008, the Company's fleet consisted of 23 vessels, or 2.1million dwt (including 12 owned, one under capital lease and 10 vessels soldand leased back for a period of five to seven years) as compared to 24vessels, or 2.5 million dwt on March 31, 2007 (including 18 vessels sold andleased back for a period of 5 to 7 years).
In December 2007, the Company entered into an agreement to sell the vesselM/T Noiseless to an unrelated party. The gain from the sale of $0.6 millionwas recognized upon the delivery of the vessel to the buyer on January 30,2008.
In January 2008, the Company agreed to sell the vessel M/T Stainless to anunrelated party and entered into a bareboat charter with the buyer until July31, 2008 (the vessel's delivery date). According to the terms of the bareboatcharter, all bareboat hire payments made up to the end of the charter periodwill be deducted from the purchase price and ownership of the vessel will betransferred to the buyer at the end of the charter period. As ownership of thevessel will be transferred to the buyer at the end of the bareboat charter,the Company classified the charter and vessel's sale as a capital lease.
In August 2007, the Company entered into an agreement to acquire the M/VAstrale, a panamax drybulk vessel of 75,933 dwt built in Japan in 2000, froman unrelated third party with an expected delivery date between January andMarch 2008. In February 2008, the Company agreed with the owners of the M/VAstrale to charter the vessel up to April 27, 2008, for a daily hire. On May1, 2008, the Company took ownership of the M/V Astrale, which was entered intoa time charter contract for a period of 1 year at a net daily rate of $67,500.As the ownership of the vessel was transferred to the Company at the end ofthe charter the Company accounted for the purchase and related charter as acapital lease.
In February 2008, the Company took delivery of the M/V Voc Gallant, asuper handymax, or supramax, drybulk vessel of 51,200 dwt built in China in2002, from an unrelated third party. The vessel was chartered back to thesellers for a period of 18 months at a daily net rate of $25,650 on a bareboatbasis. This employment agreement was later extended for an additional periodof three years at a daily net rate of $23,580.
In March 2008, the Company took delivery of the M/V Pepito, a panamaxdrybulk vessel of 75,928 dwt built in Japan in 2001 and entered into a timecharter contract for a period of 5 years at a net daily rate of $38,950.
In March 2008, the owner and lessor of M/T Faultless agreed to sell thevessel to a third party. The Company and the lessor mutually agreed toterminate the bareboat charter. The Company had sold the vessel in 2006 in asale and lease-back transaction.
