Nov. 4, 2009 (GlobeNewswire) --
NEW YORK, Nov. 4, 2009 (GLOBE NEWSWIRE) -- Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today announced its results for the third quarter of 2009.
Third quarter 2009 highlights included:
* Net Income, as adjusted for one-time, non-cash charge relating
to the amendment to the Company's credit facility, of
$3.9 million or $0.06 per share (based on a weighted average of
62.0 million shares). Net Income for the quarter without this
adjustment was $0.5 million or $0.01 per share.
* Net Revenues were $41.6 million;
* EBITDA, as adjusted for exceptional items under the terms of the
Company's credit agreement, was $25.0 million;
* Fleet utilization rate for the third quarter was 99.7%.
* Four vessels in the fleet were chartered on rates that are tied
to the Baltic Supramax Index ("BSI")
Subsequent to the close of the third quarter, Eagle Bulk successfully took delivery of the Bittern, a 58,000 dwt Supramax dry bulk vessel. The vessel immediately entered service into a previously contracted ten year time charter. The charter rate through December 2014 is $18,850 per day; thereafter the contract converts to a profit-sharing charter with a base rate of $18,000 per day. In aggregate, the Bittern is expected to contribute approximately $62 million in minimum contracted revenue.
Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, "Eagle Bulk's third quarter performance highlights steady cash flow and continued solid operating performance, with a utilization rate of 99.7%. During the quarter, we opportunistically sought to balance our fixed-rate charters with four index-based charters that are performing well. Looking forward, charter coverage of 63% for 2010 will ensure revenue stability with upside potential, while newbuild deliveries increase EBITDA."
Mr. Zoullas continued, "Our fleet expanded with the delivery of the Bittern, a Supramax newbuilding, which commenced a long-term time charter. By the end of the first quarter 2010, Eagle Bulk's fleet expansion will accelerate as the Company takes delivery of seven vessels. Of these, two are open and five have charters in place, representing minimum contracted revenues of $259 million."
Results of Operations for the three month period ended September 30, 2009
For the third quarter of 2009, the Company reported net income of $512,261 or $0.01 per share, based on a weighted average of 61,986,752 diluted shares outstanding. In the comparable third quarter of 2008, the Company reported net income of $23,221,617 or $0.49 per share, based on a weighted average of 47,066,254 diluted shares outstanding. Net income declined due to lower charter rates on some of the Company's vessels.
All of the Company's revenues were earned from time charters. Gross time charter revenues in the quarter ended September 30, 2009 were $43,688,025 compared to $54,169,749 recorded in the comparable quarter in 2008. Gross revenues declined due to prevailing market conditions. Vessels with legacy time charters saw lower rates upon charter renewals. Third party brokerage commissions incurred on those gross revenues were $2,136,220 and $2,616,517, respectively. Net revenues during the quarter ended September 30, 2009, were $41,551,805 compared to $51,553,232 in the quarter ended September 30, 2008.
Total operating expenses were $30,428,069 in the quarter ended September 30, 2009 compared to $25,002,973 recorded in the third quarter of 2008. The increase was due to operation of a larger fleet, increases in vessel crew and insurance costs, general and administrative expenses, and vessel depreciation and dry-dock amortization expenses.
EBITDA, adjusted for exceptional items under the terms of the Company's credit agreement, decreased by 36% to $24,984,274 for the third quarter of 2009, from $38,858,408 for the third quarter of 2008. (Please see below for a reconciliation of EBITDA to net income).
Results of Operations for the nine month period ended September 30, 2009
For the nine months ended September 30, 2009, the Company reported net income of $31,096,577 or $0.58 per share, based on a weighted average of 53,831,913 diluted shares outstanding. In the comparable period of 2008, the Company reported net income of $52,473,557 or $1.11 per share, based on a weighted average of 47,062,811 diluted shares outstanding.
All of the Company's revenues were earned from time charters. Gross time charter revenues for the nine month period ended September 30, 2009 were $158,243,472, an increase of 20% from $131,951,183 recorded in the comparable period in 2008, primarily due to the operation of a larger fleet. Brokerage commissions incurred on those gross revenues were $7,692,663 and $6,488,735, respectively. Net revenues during the nine-month period ended September 30, 2009, increased 20% to $150,550,809 from $125,462,448 in the comparable period in 2008.
Total operating expenses were $95,611,450 in the nine month period ended September 30, 2009 compared to $65,129,826 recorded in the same period of 2008. The increase was due to operation of a larger fleet, increases in vessel crew and insurance costs, general and administrative expenses, and vessel depreciation expenses.
EBITDA, adjusted for exceptional items under the terms of the Company's credit agreement, was $96,049,461 for the nine months ended September 30, 2009, compared to $94,208,782 for the same period in 2008. (Please see below for a reconciliation of EBITDA to net income).
Liquidity and Capital Resources
Net cash provided by operating activities during the nine month periods ended September 30, 2009 and 2008, was $80,594,642 and $81,593,271, respectively, primarily related to operation of a larger fleet and higher rates on legacy time charters, net of lower rates on charter renewals.
Net cash used in investing activities during the nine month period ended September 30, 2009, was $145,857,288, compared to $273,887,573 during the corresponding nine month period ended September 30, 2008. Investing activities primarily related to progress payments and related construction expenses for the newbuilding vessels.
Net cash provided by financing activities during the nine month period ended September 30, 2009, was $138,598,251, compared to net cash provided by financing activities of $72,374,980 during the corresponding period in 2008. Financing activities during the nine month period ended September 30, 2009 included receipt of $97,291,046 in net proceeds from the distribution of common shares of the Company, gross borrowings of $95,770,000 from the revolving credit facility, and loan repayments of $48,645,523 to lenders under the terms of the amended debt agreement which went into effect during third quarter.
As of September 30, 2009, the Company's cash balance was $82,544,467, compared to a cash balance of $9,208,862 at December 31, 2008. In addition, $12,500,000 in cash deposits are maintained with the Company's lender for loan compliance purposes and this amount is recorded in Restricted Cash in the financial statements as of September 30, 2009.
At September 30, 2009, the Company had outstanding debt of $836,725,880 which was borrowed under its revolving credit facility. These borrowings consisted of $416,233,690 for the 25 vessels in operation as of September 30, 2009, and $420,492,190 in progress payments and advances to fund the Company's 22 vessel newbuilding construction program. In August 2009, the Company successfully amended its revolving credit facility on terms that will provide the Company with enhanced financial flexibility. The non-amortizing revolving credit facility has been amended from $1.35 billion to $1.2 billion with maturity in July 2014, and the Company will use half the net proceeds from any equity issuance to repay debt and reduce the facility. The Company will continue to draw on the facility to fund its newbuilding commitments, and this agreement further supports the funding for the remainder of its newbuilding program. In connection with this amendment the Company recorded a one-time non-cash charge of $3,383,289 relating to the write-off of a portion of deferred finance costs associated with the reduction of the credit facility.
Disclosure of Non-GAAP Financial Measures
EBITDA represents operating earnings before extraordinary items, depreciation and amortization, interest expense, and income taxes, if any. EBITDA is included because it is used by certain investors to measure a company's financial performance. EBITDA is not an item recognized by GAAP and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. EBITDA is presented to provide additional information with respect to the Company's ability to satisfy its obligations including debt service, capital expenditures, and working capital requirements. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation. The following table is a reconciliation of net income, as reflected in the consolidated statements of operations, to the Credit Agreement EBITDA:
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Three Months Ended Nine Months Ended
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Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
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Net Income $512,261 $23,221,617 $31,096,577 $52,473,557
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Interest Expense 7,294,151 3,714,458 20,596,321 10,513,928
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Depreciation and
Amortization 11,094,238 8,991,877 32,328,402 23,718,898
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Amortization of
fair value below
contract value of
time charters
acquired (645,098) (264,053) (1,942,278) (264,053)
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EBITDA 18,255,552 35,663,899 82,079,022 86,442,330
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Adjustments for
Exceptional Items:
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Write-off of
Financing Fees 3,383,289 -- 3,383,289 --
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Non-cash
Compensation
Expense 3,345,433 3,194,509 10,587,150 7,766,452
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Credit Agreement
EBITDA $24,984,274 $38,858,408 $96,049,461 $94,208,782
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Summary Consolidated Financial and Other Data:
The following table summarizes the Company's selected consolidated financial and other data for the periods indicated below.
CONSOLIDATED STATEMENTS OF OPERATIONS:
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Three Months Ended Nine Months Ended
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Sept. 30, Sept. 30, Sept. 30, Sept.