PIRAEUS, Greece, Sept. 17, 2007 (PRIME NEWSWIRE) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEW) (Nasdaq:FREEZ) ("FreeSeas" or "the Company"), a provider of seaborne transportation for drybulk cargoes, announced today unaudited operating results for the quarter and six-month period ended June 30, 2007.
Second Quarter Highlights * Revenue grew by 19.3% over the same quarter of 2006 and by 44.2% for the first half of 2007 over first half of 2006. * Income from operations reached $2.10 million, compared to a loss of $0.2 million for the same period of 2006; income from operations for first half of 2007 reached $3.19 million compared to a loss of $1.58 million in the same half of 2006. * Net income for the second quarter improved to $1.71 million, compared to a loss of $0.6 million in the same quarter of 2006 or $0.27 per share, based on 6,290,100 basic shares outstanding, compared to $0.10 loss per share in same quarter 2006; net income for first half of 2007 reached $2.62 million compared to a loss of $2.26 million in the first half of 2006, or $0.42 per share as of June 30, 2007 as compared to $0.36 loss per share for the same period in 2006. * Completed sale of the M/V Free Fighter, gain on sale of $1.37 million * M/V Free Envoy employed on a new one-year time charter until April 2008 at a rate of $17,000 per day. Highlights Subsequent to the Quarter Close: * Took delivery of the Handysize M/V Free Hero currently subject to a $14,500 per day time charter expiring in December 2008 with a charterer's option for extension until February 2009. * Took delivery of the Handymax M/V Free Jupiter, currently placed on a spot charter for approximately 30 days at a rate of $43,000 per day, after which vessel will be time-chartered for three years at annually adjusting rates of US$32,000/$28,000/$24,000 per day, respectively. * Agreed to purchase 1995-built 22,051 DWT Handysize vessel, the M/V Free Goddess, for approximately $25.20 million. Delivery of the vessel is expected in September or October 2007 when it will be delivered to its charterers for a 25-month time charter at $19,250 per day.
Mr. Ion Varouxakis, Chairman of the Board, President and Chief Executive Officer, commented, "Our continued focus on fleet modernization and optimization has resulted in strong revenue growth, margin expansion and an improved capital structure, all of which have lead to the successful acquisition of two modern vessels, one Handysize and one Handymax, and the pending acquisition of a second Handysize vessel. When the third acquisition is completed, these acquisitions will dramatically lower the average age of our fleet from 24 years to 15.6 years, and increase the fleet dwt from 51,558 to 145,704. Even when excluding the one-time gain of $1.37 million related to the sale of the M/V Free Fighter, income from operations showed significant improvement."
Varouxakis continued, "With our improved operating results, and with access to additional capital through our banking relationships, we continue to explore new opportunities to increase our fleet size, while strengthening our balance sheet and providing for consistent increases in revenue and profitability. We are pleased that we have been able to implement our new focus and strategy that was announced at the beginning of the year, and we look forward to continued success as we move through the remainder of 2007."
For the quarter and six months ended June 30, 2007, FreeSeas reported operating revenue $3.56 million and $7.83 million respectively, compared to $2.99 million and $5.43 million in 2006.
FreeSeas' fleet of owned vessels and the vessel for which delivery is pending are as follows:
Current Fleet:
------------------------------------------------------------------------
Vessel Name Dwt Vessel Type Built Employment
------------------------------------------------------------------------
Free Destiny 25,240 Handysize 1982 Presently undergoing
dry-docking and
special survey
------------------------------------------------------------------------
Free Envoy 26,318 Handysize 1984 One-year TC through
Apr 2008 at $17,000 p/d
------------------------------------------------------------------------
Free Hero 24,318 Handysize 1995 TC through Dec 2008/
Feb 2009 at $14,500 p/d
------------------------------------------------------------------------
Free Jupiter 47,777 Handymax 2002 Initial 30-day TC at
$43,000 p/d followed by
three-year TC through
Sep 2010 at
$32,000/28,000/24,000 p/d
------------------------------------------------------------------------
Vessel to be delivered:
------------------------------------------------------------------------
Vessel Name Dwt Vessel Type Built Delivery/Employment
------------------------------------------------------------------------
Free Goddess 22,051 Handysize 1995 Expected delivery
September/October 2007
Two-month TC at
$13,000 p/d followed by
two-year TC at
$19,250 p/d
------------------------------------------------------------------------
FREESEAS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in tables in thousands of United States dollars, except
for share data)
June 30, 2007 December 31, 2006
(Unaudited)
---------------------------------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 7,672 $ 372
Trade receivables, net 425 278
Insurance claims 207 485
Due from related party 513 40
Inventories 165 242
Prepayments and other 124 --
---------- ----------
Total current assets $ 9,106 $ 1,417
Advances for acquisition of vessels 11,400 --
Fixed assets, net 10,268 19,369
Deferred charges, net 2,030 2,300
---------- ----------
Total Assets $ 32,804 $ 23,086
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 1,598 $ 2,003
Accrued liabilities 866 1,515
Unearned revenue 244 179
Shareholders' loans, current portion 1,864 1,218
Bank overdraft -- 2,000
Long-term debt, current portion 2,000 3,345
---------- ----------
Total current liabilities $ 6,572 $ 10,260
Shareholders' loans, net of current
portion 12,193 1,334
Long-term debt, net of current
portion 2,500 4,485
---------- ----------
Total long-term liabilities $ 14,693 $ 5,819
SHAREHOLDERS' EQUITY
Preferred stock (5,000,000 shares
authorized with par value $0.001,
nil issued and outstanding at
June 30, 2007 and December 31, 2006) -- --
Common stock (40,000,000 shares
authorized with par value $0.001,
6,290,100 issued and outstanding
at June 30, 2007 and
December 31, 2006) 6 6
Additional paid-in capital 11,612 9,703
Retained (deficit) (79) (2,702)
Total shareholders' equity $ 11,539 $ 7,007
---------- ----------
Total liabilities and
shareholders' equity $ 32,804 $ 23,086
========== ==========
FREESEAS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in tables in thousands of United States dollars, except
for share data)
For three months ended For six months ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
OPERATING REVENUES $ 3,562 $ 2,986 $ 7,830 $ 5,430
OPERATING EXPENSES:
Vessel operating
expenses (899) (1,033) (2,313) (2,065)
Voyage expenses (37) (49) (39) (686)
Depreciation expense (655) (1,081) (1,467) (2,221)
Amortization of
deferred charges (123) (112) (318) (222)
Management fees to a
related party (225) (135) (360) (270)
Commissions (225) (185) (482) (349)
Compensation costs (25) (216) (50) (379)
General and
administrative expenses (640) (390) (982) (822)
Gain on sale of vessel 1,369 -- 1,369 --
----------- ----------- ----------- -----------
Income (loss) from
operations $ 2,102 $ (215) $ 3,188 $ (1,584)
OTHER INCOME
(EXPENSE):
Finance costs $ (414) $ (265) $ (633) $ (511)
Interest income 39 2 39 13
Other (17) (125) 29 (176)
----------- ----------- ----------- -----------
Other (expense) $ (392) $ (388) $ (565) $ (674)
----------- ----------- ----------- -----------
Net income (loss) $ 1,710 $ (603) $ 2,623 $ (2,258)
=========== =========== =========== ===========
About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal offices in Piraeus, Greece. FreeSeas is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry bulk carriers. Currently, it has a fleet of three Handysize vessels and one Handymax vessel. FreeSeas' common stock and warrants trade on the NASDAQ Capital Market under the symbols FREE, FREEW and FREEZ, respectively. Risks and uncertainties are described in reports filed by FreeSeas Inc. with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the SEC's website at www.sec.gov. For more information about FreeSeas Inc. please go to our corporate website www.freeseas.gr.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy, including expected vessel acquisitions. 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 be correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which 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 dry bulk 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 obligation 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.