Second Quarter Net Income Increased 25%
Open Supramax Chartered at 121% Increase
Declares Second Quarter Dividend of $0.50
NEW YORK, Aug. 6, 2008 (PRIME NEWSWIRE) -- Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today announced its results for the second quarter of 2008.
Financial Highlights for the Second Quarter included:
* Net Income of $14.9 million or $0.32 per share (based on a weighted average of 47,123,585 diluted shares outstanding for the quarter), up 25% from net income of $11.9 million or $0.29 per share (based on a weighted average of 41,811,854 diluted shares outstanding for the quarter) in the second quarter of 2007. * Gross time charter revenue increased by $8.1 million, or 26%, to $39.1 million for the second quarter of 2008, from $31.0 million for the second quarter of 2007. Net time charter revenue increased by $8.9 million, or 31%, to $37.2 million for the second quarter of 2008, from $28.3 million for the second quarter of 2007. * EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 24% to $27.8 million for the second quarter of 2008, from $22.3 million for the second quarter of 2007. Please see below for a reconciliation of EBITDA to net income. * Declared and paid a dividend of $0.50 per share, or $23.4 million, on May 23, 2008, based on first quarter 2008 results.
Operational Highlights for the Second Quarter included:
* The Company's fleet utilization rate in the second quarter of 2008 was 99.9%. * The acquisition of two charter-free Supramax vessels for a total price of approximately $146 million: * Goldeneye, a 2002 built 52,421 dwt Supramax which delivered in June 2008 and commenced a one-year charter at $61,000 per day. * Redwing, a 2007 built 53,000 dwt Supramax expected to deliver charter-free in September 2008. * Delivery of the first of its 35 newbuilding Supramax vessels: * The 53,100 dwt Wren was delivered into the Company's fleet in June 2008, 70 days ahead of schedule and immediately commenced a 10 year term charter
Based on the second quarter results, the Company has declared a cash dividend of $0.50 per share payable on or about August 26, 2008, to shareholders of record as of August 20, 2008, bringing aggregate dividends paid to $6.10.
Additionally, the Company chartered one of its open vessels, Cardinal, for a period of 11 to 13 months at a daily time charter rate of $62,000, representing a 121% increase.
Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, "We are very pleased with our strong results and the achievement of record revenues in the second quarter, which the Company delivered as we advanced our strategic growth plan. Specifically, we acquired two modern Supramax vessels: Goldeneye, which commenced a one-year charter at $61,000 per day, and Redwing, which will deliver charter-free in September. Further, we have chartered the open vessel Cardinal for $62,000 per day for a period of one year commencing this month.
Mr. Zoullas continued, "We also took delivery of the first of our 35 newbuilding vessels, Wren, well ahead of schedule and the vessel immediately commenced a long-term time charter. With the commencement of the deliveries of our newbuild vessels, Eagle Bulk is now on a rapid expansion phase which will see significantly enhanced growth in cashflow and earnings."
Results of Operations for the three month periods ended June 30, 2008 and 2007
All of the Company's revenues were earned from Time Charters. Gross revenues in the second quarter of 2008 were $39,170,513, an increase of 26% from the $31,011,901 recorded in the comparable quarter in 2007, primarily due to a larger fleet size, as reflected by increased operating days, and an increase in daily time charter rates. Brokerage commissions incurred on revenues earned were $1,947,313 and $1,593,854 in the second quarters of 2008 and 2007, respectively. The second quarter of 2007 also reflected an amortization charge of net prepaid and deferred charter revenue of $1,080,000. Net revenues during the three months ended June 30, 2008, and 2007 were $37,223,200 and $28,338,047, respectively, an increase of 31%.
For the second quarter of 2008, total vessel expenses incurred amounted to $7,596,479. These expenses included $7,110,980 in vessel operating costs and $485,499 in technical management fees paid to the Company's third-party technical managers. For the corresponding quarter in 2007, total vessel expenses were $6,856,581 which included $6,435,504 in vessel operating costs and $421,077 in technical management fees.
General and administrative expenses for the three-month periods ended June 30, 2008 and 2007 were $4,762,933 and $1,697,530, respectively. The increase in general and administrative expenses is attributed to expenses associated with a larger fleet.
EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 24% to $27,802,569 for the second quarter of 2008, from $22,336,443 for the comparable quarter in 2007. (Please see below for a reconciliation of EBITDA to net income)
Net income for the second quarter of 2008 was $14,906,130, an increase of 25% from $11,924,695 in the comparable quarter in 2007. Earnings per share in the second quarter of 2008 were $0.32, based on a weighted average of 47,123,585 diluted shares outstanding. In the comparable quarter of 2007, earnings per share were $0.29, based on a weighted average of 41,811,854 diluted shares outstanding.
Results of Operations for the six month periods ended June 30, 2008 and 2007
All of the Company's revenues were earned from Time Charters. Gross revenues in the six-month period of 2008 were $77,781,434, an increase of 29% from the $60,488,275 recorded in the comparable period in 2007, primarily due to a larger fleet size, as reflected by increased operating days, and an increase in daily time charter rates. Third party brokerage commissions incurred on revenues earned were $3,872,218 and $3,081,696 in the six-month periods of 2008 and 2007, respectively. The six-month period of 2007 also reflected an amortization charge of net prepaid and deferred charter revenue of $2,160,000. Net revenues during the six-month periods ended June 30, 2008, and 2007 were $73,909,216 and $55,246,579, respectively, an increase of 34%.
For the six-month period of 2008, total vessel expenses incurred amounted to $15,587,740. These expenses included $14,550,939 in vessel operating costs and $1,036,801 in technical management fees paid to the Company's third-party technical managers. For the corresponding period in 2007, total vessel expenses were $13,102,479 which included $12,271,965 in vessel operating costs and $830,514 in technical management fees.
General and administrative expenses for the six-month periods ended June 30, 2008 and 2007 were $9,812,092 and $6,600,573, respectively. The increase in general and administrative expenses is attributed to expenses associated with a larger fleet.
EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 25% to $55,350,374 for the six-month period of 2008, from $44,106,210 for the comparable period in 2007. (Please see below for a reconciliation of EBITDA to net income)
Net income for the six-month period of 2008 was $29,251,940, an increase of 43% from $20,412,483 in the comparable period in 2007. Earnings per share for the six-month period of 2008 were $0.62, based on a weighted average of 47,047,552 diluted shares outstanding. In the comparable period of 2007, earnings per share were $0.51, based on a weighted average of 39,658,525 diluted shares outstanding.
Liquidity and Capital Resources
Net cash provided by operating activities during the six month periods ended June 30, 2008 and 2007 was $49,815,118 and $37,606,769, respectively. The increase was primarily due to cash generated from the operation of the fleet for 3,294 days in the six month period ended June 30, 2008 compared to 2,854 days during the same period in 2007.
Net cash used in investing activities during the six month period ended June 30, 2008, was $159,879,332 compared to $166,314,920 during the corresponding period in 2007. Investing activities during the current six month period included an amount of $70,103,682 spent for the acquisition of the GOLDENEYE, placing a deposit of $7,650,000 for a vessel, REDWING, which is to be delivered in September 2008, and advancing a total of $82,055,976 for the newbuilding vessel construction program. Investing activities during the comparable six month period in 2007 primarily relates to the expenditure of $138,803,974 for the acquisition of three Supramax vessels, SHRIKE, SKUA and KITTIWAKE, advances of $39,522,428 for the newbuilding vessel construction program, and net proceeds of $12,011,482 from the sale of the SHIKRA, a 1984-built Handymax vessel, to an unrelated third party.
Net cash provided by financing activities during the six month period ended June 30, 2008 was $20,157,135, compared to net cash provided by financing activities of $129,312,075 during the corresponding six month period in 2007. Financing activities during the current six month period included borrowings of $68,451,753 from our revolving credit facility to fund the newbuilding program, and paying $46,763,820 in dividends. Financing activities during the comparable six month period in 2007 primarily relates to gross proceeds of $110,171,870 from the sale of common shares of the Company's stock, incurring costs of $3,186,989 associated with the share sale, borrowings of $74,841,779 from our revolving credit facility, debt repayments of $12,440,000 from the gross proceeds of the sale of the SHIKRA, and payment $39,165,910 in dividends.
As of June 30, 2008, the Company's cash balance was $62,996,613 compared to a cash balance of $22,879,415 at June 30, 2007. In addition, $10,000,000 in cash deposits are maintained with the lender for loan compliance purposes and this amount is recorded in Restricted Cash in the financial statements as of June 30, 2008. Also recorded in Restricted Cash is an amount of $276,056 which is collateralizing a letter of credit relating to the Company's office leases.
As of June 31, 2008, total availability under the $1,600,000,000 revolving credit facility is $934,305,357. The facility also provides the Company with the ability to borrow up to $20,000,000 for working capital purposes. The Company anticipates that its current financial resources, together with cash generated from operations and, if necessary, borrowings under the revolving credit facility will be sufficient to fund the operations of its fleet, including working capital requirements, for the foreseeable future. The Company is in compliance with all of the covenants contained in its debt agreements as of June 30, 2008.
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 Company's revolving credit facility permits it to pay dividends in amounts up to its cumulative free cash flows which is earnings before extraordinary or exceptional items, interest, taxes, depreciation and amortization (Credit Agreement EBITDA), less the aggregate amount of interest incurred and net amounts payable under interest rate hedging agreements during the relevant period and an agreed upon reserve for dry-docking. Therefore, the Company believes that this non-GAAP measure is important for its investors as it reflects its ability to pay dividends. The following table is a reconciliation of net income, as reflected in the consolidated statements of operations, to the Credit Agreement EBITDA:
Three Months Ended Six Months Ended
------------------------ ------------------------
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Net Income $14,906,130 $11,924,695 $29,251,940 $20,412,483
----------- ----------- ----------- -----------
Interest Expense 3,449,217 3,160,439 6,799,470 6,312,564
----------- ----------- ----------- -----------
Depreciation and
Amortization 7,390,982 6,046,953 14,727,021 11,837,584
----------- ----------- ----------- -----------
Amortization of
Prepaid and
Deferred Revenue -- 1,080,000 -- 2,160,000
----------- ----------- ----------- -----------
EBITDA 25,746,329 22,212,087 50,778,431 40,722,631
----------- ----------- ----------- -----------
Adjustments for
Exceptional
Items:
Non-cash
Compensation
Expense (1) 2,056,240 124,356 4,571,943 3,383,579
----------- ----------- ----------- -----------
Credit Agreement
EBITDA $27,802,569 $22,336,443 $55,350,374 $44,106,210
----------- ----------- ----------- -----------
(1) Stock based compensation related to stock options, restricted
stock units, and management's participation in profits interests
in the Company's former principal shareholder Eagle Ventures LLC.
Capital Expenditures and Drydocking
The Company's capital expenditures relate to the purchase of vessels and capital improvements to its vessels which are expected to enhance the revenue earning capabilities and safety of these vessels. As of June 30, 2008, the fleet currently consists of 20 vessels which are currently operational, 34 newbuilding vessels which have been contracted for construction and will be delivered between 2008 and 2012 and one modern second-hand vessel which is scheduled for delivery in September 2008.
In addition to acquisitions that may be undertaken in future periods, the Company's other major capital expenditures include funding the Company's maintenance program of regularly scheduled drydocking necessary to preserve the quality of our vessels as well as to comply with international shipping standards and environmental laws and regulations. Management anticipates that vessels are to be drydocked every two and a half years and funding is to be met with cash from operations. Drydocking costs incurred are amortized to expense on a straight-line basis over the period through the date the next drydocking for those vessels are scheduled to occur. The Company drydocked two vessels in the six-month period ended June 30, 2008. The following table represents certain information about the estimated costs for anticipated vessel drydockings in the next four quarters, along with the anticipated off-hire days:
Quarter Ending Off-hire Days(1) Projected Costs(2)
------------------ ----------------- -----------------
September 30, 2008 88 $2.00 million
December 31, 2008 22 $0.50 million
March 31, 2009 22 $0.50 million
June 30, 2009 22 $0.50 million
(1) While we estimate 22 days per vessel, actual duration of
drydocking a vessel will vary based on the condition of the
vessel, yard schedules and other factors.
(2) Actual costs will vary based on various factors, including where
the drydockings are actually performed.
Summary Consolidated Financial and Other Data:
The following table summarizes the Company's selected consolidated financial and other data (unaudited) for the periods indicated below.
CONSOLIDATED STATEMENTS
OF OPERATIONS:
Three Months Ended Six Months Ended
------------------------ ------------------------
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Revenues, net of
Commissions $37,223,200 $28,338,047 $73,909,216 $55,246,579
Vessel Expenses 7,596,479 6,856,581 15,587,740 13,102,479
Depreciation and
Amortization 7,390,982 6,046,953 14,727,021 11,837,584
General and
Administrative
Expenses 4,762,933 1,697,530 9,812,092 6,600,573
Gain on Sale of
Vessel -- -- -- (872,568)
----------- ----------- ----------- -----------
Total
Operating
Expenses 19,750,394 14,601,064 40,126,853 30,668,068
Operating Income 17,472,806 13,736,983 33,782,363 24,578,511
Interest Expense 3,449,217 3,160,439 6,799,470 6,312,564
Interest Income (882,541) (1,348,151) (2,269,047) (2,146,536)
----------- ----------- ----------- -----------
Net Interest
Expense 2,566,676 1,812,288 4,530,423 4,166,028
Net Income $14,906,130 $11,924,695 $29,251,940 $20,412,483
Weighted Average
Shares
Outstanding:
Basic 46,763,160 41,713,820 46,757,849 39,593,975
Diluted 47,123,585 41,811,854 47,047,552 39,658,525
Per Share
Amounts:
Basic Net Income $ 0.32 $ 0.29 $ 0.63 $ 0.52
Diluted Net
Income $ 0.32 $ 0.29 $ 0.62 $ 0.51
Cash Dividends
Declared and
Paid $ 0.50 $ 0.50 $ 1.00 $ 1.01
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Fleet Operating Data
Number of Vessels in
Operating Fleet 20 18 20 18
----------- ----------- ----------- -----------
Ownership Days 1,656 1,447 3,294 2,854
----------- ----------- ----------- -----------
Available Days 1,617 1,438 3,255 2,833
----------- ----------- ----------- -----------
Operating Days 1,616 1,435 3,249 2,822
----------- ----------- ----------- -----------
Fleet Utilization 99.9% 99.8% 99.8% 99.6%
----------- ----------- ----------- -----------
CONSOLIDATED BALANCE SHEETS:
June 30, December 31,
2008 2007
--------------- ---------------
ASSETS: (Unaudited)
Current Assets:
Cash $ 62,996,613 $ 152,903,692
Accounts Receivable 4,298,844 3,392,461
Prepaid Expenses 2,119,223 1,158,113
--------------- ---------------
Total Current Assets 69,414,680 157,454,266
Fixed Assets:
Advances for Vessel Acquisition 7,650,000 --
Vessels and Vessel Improvements,
at cost, net of Accumulated
Depreciation of $66,211,384 and
$52,733,604, respectively 717,738,187 605,244,861
Advances for Vessel Construction 380,671,562 344,854,962
Restricted Cash 10,276,056 9,124,616
Deferred Drydock Costs, net of
Accumulated Amortization of
$3,702,494 and
$2,453,253, respectively 4,168,529 3,918,006
Deferred Financing Costs 14,138,345 14,479,024
Other Assets 4,333,556 932,638
--------------- ---------------
Total Assets $ 1,208,390,915 $ 1,136,008,373
=============== ===============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 1,774,373 $ 3,621,559
Accrued Interest 4,208,254 455,750
Other Accrued Liabilities 2,846,977 1,863,272
Unearned Charter Hire Revenue 5,941,253 4,322,024
--------------- ---------------
Total Current Liabilities 14,770,857 10,262,605
Long-term Debt 665,694,643 597,242,890
Deferred Revenue 8,793,903 --
Other Liabilities 12,223,412 13,531,883
--------------- ---------------
Total Liabilities 701,482,815 621,037,378
Stockholders' Equity:
Preferred Stock, $.01 par value,
25,000,000 shares authorized, none
issued
-- --
Common shares, $.01 par value,
100,000,000 shares authorized,
46,770,486 and 46,727,153 shares
issued and outstanding,
respectively 467,704 467,271
Additional Paid-In Capital 607,738,367 602,929,530
Retained Earnings (net of Dividends
declared of $215,289,302 and
$168,525,482 respectively) (93,338,441) (75,826,561)
Accumulated Other Comprehensive Loss (7,959,530) (12,599,245)
--------------- ---------------
Total Stockholders' Equity 506,908,100 514,970,995
--------------- ---------------
Total Liabilities and
Stockholders' Equity $ 1,208,390,915 $ 1,136,008,373
=============== ===============
Six Months Ended
--------------------------------
June 30, June 30,
2008 2007
--------------- ---------------
Cash Flows from Operating
Activities:
Net Income $ 29,251,940 $ 20,412,483
Adjustments to Reconcile Net Income
to Net Cash provided by Operating
Activities:
Items included in net income not
affecting cash flows:
Depreciation 13,477,780 11,234,675
Amortization of Deferred Drydocking
Costs 1,249,241 602,909
Amortization of Deferred Financing
Costs 123,219 117,784
Amortization of Prepaid and Deferred
Charter Revenue -- 2,160,000
Non-cash Compensation Expense 4,571,943 3,383,579
Gain on Sale of Vessel -- (872,568)
Changes in Operating Assets and
Liabilities:
Accounts Receivable (906,383) (791,595)
Prepaid Expenses (961,110) 24,579
Accounts Payable (1,847,186) 1,481,907
Accrued Interest 3,752,504 94,759
Accrued Expenses 983,705 (350,612)
Drydocking Expenditures (1,499,764) (628,307)
Unearned Charter Hire Revenue 1,619,229 737,176
--------------- ---------------
Net Cash Provided by Operating
Activities 49,815,118 37,606,769
Cash Flows from Investing
Activities:
Advances for Vessel Acquisition (7,650,000) --
Purchase of Vessels and Vessel
Improvements (70,103,682) (138,803,974)
Advances for Vessel Construction (82,055,976) (39,522,428)
Proceeds from Sale of Vessel -- 12,011,482
Advances for Leasehold Improvements (69,674) --
--------------- ---------------
Net Cash Used in Investing
Activities (159,879,332) (166,314,920)
Cash Flows from Financing
Activities:
Issuance of Common Stock 237,327 110,171,870
Equity Issuance Costs -- (3,186,989)
Bank Borrowings 68,451,753 74,841,779
Repayment of Bank Debt -- (12,440,000)
Changes in Restricted Cash (1,151,440) (800,000)
Deferred Financing Costs (616,685) (108,675)
Cash Dividends (46,763,820) (39,165,910)
--------------- ---------------
Net Cash Provided by Financing
Activities 20,157,135 129,312,075
Net (Decrease)/Increase in Cash (89,907,079) 603,924
Cash at Beginning of Period 152,903,692 22,275,491
--------------- ---------------
Cash at End of Period $ 62,996,613 $ 22,879,415
=============== ===============
Supplemental Cash Flow Information:
Cash paid during the period for
Interest (including Capitalized
interest of $7,729,831 $ 14,424,367 $ 7,383,525
and $1,165,560 respectively
Commercial and strategic management of the fleet is carried out by a wholly-owned subsidiary of the Company, Eagle Shipping International (USA) LLC, a Marshall Islands limited liability company with offices in New York City.
The following table represents certain information about the Company's revenue earning charters on its operating fleet as of June 30, 2008:
--------------------------------------------------------------------
Daily Time
Year Charter
Vessel Built Dwt Time Charter Expiration (1) Hire Rate
------------ ----- ------ ---------------------------- ---------
Cardinal 2004 55,408 May 2008 to August 2008 $28,000
August 2008 to Jun/Sep 2009 $62,000
Condor (2) 2001 50,296 May 2009 to August 2009 $20,500
Falcon (3) 2001 50,296 April 2008 to July 2008 $20,950
July 2008 to Apr/Jun 2010 $39,500
Griffon 1995 46,635 March 2009 to June 2009 $20,075
Harrier (4) 2001 50,296 June 2009 to September 2009 $24,000
Hawk I 2001 50,296 April 2009 to June 2009 $22,000
Heron (5) 2001 52,827 January 2011 to March 2011 $26,375
Jaeger (6) 2004 52,248 July 2008 to September 2008 $27,500
Kestrel I (7) 2004 50,326 April 2008 to June 2008 $18,750
June 2008 to April 2009 $20,000
Kite 1997 47,195 September 2009 to January 2010 $21,000
Merlin(8) 2001 50,296 December 2010 to March 2011 $25,000
Osprey I (9) 2002 50,206 July 2008 to November 2008 $21,000
November 2008 to December 2009 $25,000
Peregrine 2001 50,913 December 2008 to February 2009 $20,500
Sparrow (10) 2000 48,225 February 2010 to April 2010 $34,500
Tern (11) 2003 50,200 February 2009 to April 2009 $20,500
Shrike (12) 2003 53,343 April 2009 to June 2009 $24,600
June 2009 to Aug 2010 $25,600
Skua (13) 2003 53,350 May 2009 to August 2009 $24,200
August 2009 to September 2010 $25,200
Kittiwake (14) 2002 53,146 May 2008 to August 2008 $30,400
August 2008 to July/Sep 2009 $56,250
Goldeneye 2002 52,421 May 2009 to August 2009 $61,000
Wren (15) 2008 53,100 Feb 2012 $24,750
Feb 2012 to Dec 2018/Apr 2019 $18,000
(with
profit
share)
--------------------------------------------------------------------
(1) The date range provided represents the earliest and latest
date on which the charterer may redeliver the vessel to the
Company upon the termination of the charter. The time
charter hire rates presented are gross daily charter rates
before brokerage commissions, ranging from 2.25% to 6.25%,
to third party ship brokers.
(2) The charterer of the CONDOR has exercised its option to
extend the charter period by 11 to 13 months at a time
charter rate of $22,000 per day.
(3) Upon the conclusion of the current charter in July 2008, the
FALCON commenced a new time charter with a rate of $39,500
per day for 21 to 23 months. The charterer has an option to
extend the charter period by 11 to 13 months at a daily time
charter rate of $41,000.
(4) The daily rate for the HARRIER is $27,000 for the first year
and $21,000 for the second year. Revenue recognition is
based on an average daily rate of $24,000.
(5) The previous time charter on the HERON at a daily rate of
$24,000 ended in January 2008. The vessel commenced a new
time charter with a rate of $26,375 per day for 36 to 39
months. The charterer has an option for a further 11 to 13
months at a time charter rate of $27,375 per day. The
charterer has a second option for a further 11 to 13 months
at a time charter rate of $28,375 per day.
(6) The charter rate for the JAEGER may reset at the beginning
of each month based on the average time charter rate for the
Baltic Supramax Index, but in no case be greater than
$27,500 per day or less than $22,500 per day.
(7) The charterer of the KESTREL I has exercised its option to
extend the charter period by 11 to 13 months at a daily time
charter rate of $20,000 per day.
(8) The daily rate for the MERLIN is $27,000 for the first year,
$25,000 for the second year and $23,000 for the third year.
Revenue recognition is based on an average daily rate of
$25,000.
(9) The charterer of the OSPREY I has exercised its option to
extend the charter period by up to 11 to 13 months at a time
charter rate of $25,000 per day. The charterer has an
additional option to extend for a further 11 to 13 months at
a time charter rate of $25,000 per day.
(10) The SPARROW was previously on a time charter at a base rate
of $24,000 per day for 11 to 13 months with a profit share
of 30% of up to the first $3,000 per day over the base rate.
This charter ended in February 2008.
(11) The TERN previously was on a time charter at a daily rate of
$19,000. This charter ended in March 2008 and the charterer
has exercised its option to extend the charter period by 11
to 13 months at a time charter rate of $20,500 per day.
(12) The charterer of the SHRIKE has exercised their option to
extend the charter period by 12 to 14 months at a daily time
charter rate of $25,600.
(13) The charterer of the SKUA has exercised an option to extend
the charter period by 11 to 13 months at a daily time
charter rate of $25,200.
(14) The KITTIWAKE is employed on a time charter for 11 to 13
months. The charter rate may reset at the beginning of each
month based on the average time charter rate for the Baltic
Supramax Index, but in no case be greater than $30,400 per
day or less than $24,400 per day. Upon conclusion of this
charter in August 2008, the KITTIWAKE will commence a new
time charter with a rate of $56,250 per day for 11 to 13
months.
(15) The WREN has entered into a long-term charter. The charter
rate until February 2012 is $24,750 per day. Subsequently,
the charter until redelivery in December 2018 to April 2019
will be profit share based. The base charter rate will be
$18,000 with a 50% profit share for earned rates over
$22,000 per day. Revenue recognition for the base rate from
commencement of the charter is based on an average daily
base rate of $20,306.
The Company had entered into a 35 vessel construction program. The first of these vessels, the Wren, was constructed in China and delivered to the Company in June 2008. As of June 30, 2008, the Company has contracts for 34 vessels to be constructed in China and Japan. The following table represents certain information about the Company's newbuilding vessels and their employment upon delivery:
---------------------------------------------------------------------
Daily
Year Time
Built - Time Charter Charter
Expected Employment Hire Profit
Vessel Dwt Delivery(1) Expiration(2) Rate(3) Share
------------- ------ -------- ------------- ---------- --------
Woodstar 53,100 Oct 2008 Jan 2014 $18,300 --
Jan 2014
to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Crowned Eagle 56,000 Nov 2008 Charter Free -- --
Crested Eagle 56,000 Feb 2009 Charter Free -- --
Stellar Eagle 56,000 Apr 2009 Charter Free -- --
Thrush 53,100 Sep 2009 Charter Free -- --
Bittern 58,000 Sep 2009 Dec 2014 $18,850 --
Dec 2014
to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Canary 58,000 Oct 2009 Jan 2015 $18,850 --
Jan 2015
to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Thrasher 53,100 Nov 2009 Feb 2016 $18,400 --
Feb 2016
to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Crane 58,000 Nov 2009 Feb 2015 $18,850 --
Feb 2015
to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Avocet 53,100 Dec 2009 Mar 2016 $18,400 --
Mar 2016
to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Egret (4) 58,000 Dec 2009 Sep 2012 to
Jan 2013 $17,650 50% over
$20,000
Golden Eagle 56,000 Jan 2010 Charter Free -- --
Gannet (4) 58,000 Jan 2010 Oct 2012 to
Feb 2013 $17,650 50% over
$20,000
Imperial Eagle 56,000 Feb 2010 Charter Free -- --
Grebe(4) 58,000 Feb 2010 Nov 2012 to
Mar 2013 $17,650 50% over
$20,000
Ibis (4) 58,000 Mar 2010 Dec 2012 to
Apr 2013 $17,650 50% over
$20,000
Jay 58,000 Apr 2010 Sep 2015 $18,500 50% over
$21,500
Sep 2015 to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Kingfisher 58,000 May 2010 Oct 2015 $18,500 50% over
$21,500
Oct 2015 to Dec 2018/
Apr 2019 $18,000 50% over
$22,000
Martin 58,000 Jun 2010 Dec 2016 to
Dec 2017 $18,400 --
Besra (5) 58,000 Oct 2010 Charter Free -- --
Cernicalo (5) 58,000 Jan 2011 Charter Free -- --
Nighthawk 58,000 Mar 2011 Sep 2017 to
Sep 2018 $18,400 --
Oriole 58,000 Jul 2011 Jan 2018 to
Jan 2019 $18,400 --
Fulmar (5) 58,000 Jul 2011 Charter Free -- --
Owl 58,000 Aug 2011 Feb 2018 to
Feb 2019 $18,400 --
Petrel (4) 58,000 Sep 2011 Jun 2014 to
Oct 2014 $17,650 50% over
$20,000
Goshawk (5) 58,000 Sep 2011 Charter Free -- --
Puffin (4) 58,000 Oct 2011 Jul 2014 to
Nov 2014 $17,650 50% over
$20,000
Roadrunner (4) 58,000 Nov 2011 Aug 2014 to
Dec 2014 $17,650 50% over
$20,000
Sandpiper (4) 58,000 Dec 2011 Sep 2014 to
Jan 2015 $17,650 50% over
$20,000
Snipe(5) 58,000 Jan 2012 Charter Free -- --
Swift (5) 58,000 Feb 2012 Charter Free -- --
Raptor (5) 58,000 Mar 2012 Charter Free -- --
Saker (5) 58,000 Apr 2012 Charter Free -- --
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(1) Vessel build and delivery dates are estimates based on
guidance received from shipyard.
(2) The date range represents the earliest and latest date on
which the charterer may redeliver the vessel to the Company
upon the termination of the charter.
(3) The time charter hire rates presented are gross daily
charter rates before brokerage commissions, ranging from
2.25% to 6.25%, to third party ship brokers. Revenue
recognition for the long term charters with base rates will
be based on an average daily base rate over the life of the
charter from commencement of the charter.
(4) The charterer has an option to extend the charter by 2
periods of 11 to 13 months each.
(5) Options for construction exercised on December 27, 2007.
Glossary of Terms:
Ownership days: The Company defines ownership days as the aggregate number of days in a period during which each vessel in its fleet has been owned. Ownership days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that is recorded during a period.
Available days: The Company defines available days as the number of ownership days less the aggregate number of days that its vessels are off-hire due to vessel familiarization upon acquisition, scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
Operating days: The Company defines operating days as the number of its available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
Conference Call Information
As previously announced, members of Eagle Bulk's senior management team will host a teleconference and webcast at 8:30 a.m. ET on Thursday, August 7, 2008, to discuss these results.
To participate in the teleconference, investors and analysts are invited to call 866-770-7146 in the U.S., or 617-213-8068 outside of the U.S., and reference participant code 25570315. A simultaneous webcast of the call, including a slide presentation for interested investors and others, may be accessed by visiting http://www.eagleships.com.
A replay will be available following the call until 11:59 p.m. ET on August 14th, 2008. To access the replay, call 888-286-8010 in the U.S., or 617-801-6888 outside of the U.S., and reference passcode 62102410.
About Eagle Bulk Shipping Inc.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in New York. The Company is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although Eagle Bulk Shipping Inc. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Eagle Bulk Shipping Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by Eagle Bulk Shipping Inc. with the US Securities and Exchange Commission.
Visit our website at www.eagleships.com