-- For the first quarter of 2008 the Company reported Net Income of $6.4
million or $0.44 per common and subordinated share. Net income for the
period has been affected by a non cash charge of $5.3 million associated
with the valuation of the Company's interest rate swaps and a one time non
cash charge of $1.1 million related to the settlement agreement reached
between the Company and the former Chief Executive Officer of the Company.
Excluding the above two non cash items net income for the first quarter of
2008 amounted to $12.8 million or $0.88 per common and subordinated share.
-- OceanFreight's Board of Directors has declared a dividend of $0.77 per
share for the first quarter of 2008. The dividend is payable on or about
May 23, 2008, to common and subordinated shareholders of record as of May
16, 2008.
Other Developments
-- The Company has entered its 1996 built 149,085 dwt Suezmax tanker MT
Olinda into a time charter for a period of about 2 years at a daily gross
rate of approximately $41,000. The vessel is expected to be delivered to
its charterers in the third quarter of this year.
Anthony Kandylidis, the Company's President and Chief Executive Officer,
commented:
"This was the first quarter that OceanFreight had all of its eleven vessels
operational. We achieved fleet utilization close to 100% which is a
testament to the operational capability and efficiency of our ship
managers. With the time charter of the Olinda all of our vessels will be
employed on period contracts with an average remaining duration of 2.2
years. Our time charter coverage presently stands at about 95% and 87% of
the total vessel operating days for the calendar year 2008 and 2009
respectively. In this quarter we also announced our second dividend of
$0.77 cents per share, a dividend higher than our base dividend established
at the time of our initial public offering. We remain committed to our
stated business strategy since we went public and we believe that we are
well positioned to continue to deliver consistent returns to our
shareholders while looking for opportunities to grow."
First Quarter 2008 Results
For the quarter ended March 31, 2008, Gross Revenue amounted to $38.4
million and Operating Income amounted to $15.6 million. Net Income for the
first quarter of 2008 was $6.4 million representing $0.44 earnings per
share calculated on 14,428,256 weighted average common and subordinated
shares outstanding.
The above Net Income figure includes a non cash charge of $5.3 million
associated with the valuation of the Company's interest rate swaps and a
one time non cash charge of $1.1 million related to the settlement
agreement reached between the Company and the former Chief Executive
Officer of the Company. Excluding the above two non cash items, net income
for the first quarter of 2008 amounted to $12.8 million or $0.88 per common
and subordinated share.
EBITDA for the first quarter of 2008 was $20.44 million(1).
An average of 10.8 vessels were owned and operated during the first quarter
of 2008, earning an average Time Charter Equivalent, or TCE rate of $34,938
per day.
Capitalization
On March 31, 2008, debt (debt, net of deferred financing fees) to total
capitalization (debt, net of deferred financing fees, and stockholders'
equity) was 60.7% and net debt (debt less cash and cash equivalents) to
total capitalization was 56.2%.
As of March 31, 2008, the Company had a total liquidity of approximately
$23.5 million.
Fleet Employment Developments
The Company has entered its 1996 built 149,085 dwt Suezmax tanker MT Olinda
into a time charter for a period of about 2 years at a daily gross rate of
approximately 41,000. This time charter is expected to generate gross
revenues of approximately $30 million for the Company over the
corresponding charter period.
Capital expenditures
One of our Panamax drybulk carriers is scheduled for drydocking for a
period of approximately 35 days in the third quarter of 2008. It is the
policy of the Company to expense drydocking costs as incurred.
Dividend Payment
OceanFreight's Board of Directors declared a dividend of $0.77 per share in
respect of the first quarter of 2008. The dividend is payable on or about
May 23, 2008, to common and subordinated shareholders of record as of May
16, 2008.
Since the Company's listing on the NASDAQ Global Market in April 2007,
OceanFreight has declared four consecutive quarterly dividends totaling
$2.44 per common and subordinated share.
(1) Please see later in this release for a reconciliation of EBITDA to net
cash provided by Operating activities.
Recent Developments
On April 7, 2008, the Company and our former Chief Executive Officer
entered a settlement agreement resolving all claims. We therefore consider
the matter closed.
Fleet Data
March 31,
2008
------------
Average number of vessels (1) 10.80
Total voyage days for fleet (2) 984
Total calendar days for fleet (3) 985
Fleet Utilization (4) 99.9%
Time charter equivalent (5) 34,938
Vessel operating expenses (daily) (6) 5,816
Management fees (daily) 468
General and administrative expenses (daily) (7) 2,488
Total vessel operating expenses (daily) (8) 8,772
(1) Average number of vessels is the number of vessels that constituted our
fleet for the relevant period, as measured by the sum of the number of days
each vessel was a part of our fleet during the period divided by the number
of calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of off hire.
(3) Calendar days are the total days the vessels were in our possession for
the relevant period including off hire days.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by dividing
voyage days by fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is determined by
dividing gross revenues (net of voyage expenses) by voyage days for the
relevant time period. 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 is a standard shipping industry performance measure used
primarily to compare period-to-period changes in a shipping company's
performance despite changes in the mix of charter types (i.e., spot
charters, time charters and bareboat charters) under which the vessels may
be employed between the periods.
(6) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and repairs
is calculated by dividing vessel operating expenses by fleet calendar days
for the relevant time period.
(7) Daily general and administrative expense is calculated by dividing
general and administrative expense by fleet calendar days for the relevant
time period.
(8) Total vessel operating expenses, or TVOE is a measurement of our total
expenses associated with operating our vessels. TVOE is the sum of vessel
operating expenses, management fees and general and administrative
expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days
for the relevant time period.
The following table reflects the calculation of our TCE rates for the
periods then ended:
3 Months Ended
(Dollars in thousands) 31-Mar-08
--------------
Gross revenues 38,359
Voyage expenses (3,980)
--------------
Time Charter equivalent revenues 34,379
==============
Total voyage days for fleet 984
Time charter equivalent (TCE) rate 34,938
Financial Statements
The following are OceanFreight Inc.'s Consolidated Statements of Income for
the three month periods ended March 31, 2008 and 2007:
3 Months 3 Months
Ended Ended
(Dollars in thousands, except for share and per March 31, March 31,
share data) 2008 2007
----------- -----------
Unaudited Unaudited
INCOME STATEMENT DATA
Voyage revenues $ 35,794 $ -
Imputed revenue 2,565 -
----------- -----------
Gross Revenue 38,359 -
Voyage expenses (3,980) -
Vessels operating expenses (5,729) -
Depreciation (10,174) -
Management fees (461) -
General and administrative expenses (2,451) (81)
Operating Income 15,564 (81)
----------- -----------
Interest and finance costs (4,037) -
Interest income 173 6
Loss on derivative instruments (5,296)
----------- -----------
Net Income (loss) $ 6,404 $ (75)
=========== ===========
The following are OceanFreight Inc.'s Consolidated Balance Sheets as at
March 31, 2008 and December 31, 2007:
OCEANFREIGHT INC.
Consolidated Balance Sheets
March 31, 2008 and December 31, 2007
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
2008 2007
(Unaudited) (Audited)
----------- -----------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 23,464 $ 19,044
Accounts receivable 1,747 226
Inventories 1,607 678
Prepayments and other 1,819 763
----------- -----------
Total current assets 28,637 20,711
----------- -----------
FIXED ASSETS, NET:
Vessels, net 540,856 485,280
Other, net 56 61
----------- -----------
Total fixed assets, net 540,912 485,341
----------- -----------
OTHER NON CURRENT ASSETS:
Deferred financing fees, net 1,886 1,860
Other, net 13 13
----------- -----------
Total non current assets, net 1,899 1,873
----------- -----------
----------- -----------
Total assets $ 571,448 $ 507,925
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Long-term debt, current portion $ 22,944 $ 16,000
Accounts payable 2,591 2,427
Due to related parties 139 742
Accrued liabilities 5,578 2,909
Unearned revenue 1,216 1,488
Derivative liability, current portion 3,900 -
Imputed deferred revenue, current portion 10,290 10,318
----------- -----------
Total current liabilities 46,658 33,884
----------- -----------
NON CURRENT LIABILITIES:
Derivative liability, net of current portion 1,396 -
Imputed deferred revenue, net of current
portion 13,494 16,031
Long-term debt, net of current portion 301,056 244,600
----------- -----------
Total non current liabilities 315,946 260,631
----------- -----------
COMMITMENTS AND CONTINGENCIES - -
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 5,000,000
shares authorized, none issued - -
Common stock, $0.01 par value; 95,000,000
shares authorized; 12,386,185 and 12,394,079
shares issued and outstanding at March 31,
2008 and December 31, 2007, respectively 124 124
Subordinated Shares, par value $0.01;
10,000,000 shares authorized; 2,106,203 and
2,063,158 shares issued and outstanding at
March 31, 2008 and December 31, 2007,
Respectively 21 21
Additional paid-in capital 218,386 218,263
Accumulated deficit (9,687) (4,998)
----------- -----------
Total stockholders' equity 208,844 213,410
----------- -----------
Total liabilities and stockholders' equity $ 571,448 $ 507,925
=========== ===========
EBITDA Reconciliation
OceanFreight Inc. considers EBITDA to represent net income before interest,
taxes, depreciation and amortization. EBITDA does not represent and should
not be considered as an alternative to net income or cash flow from
operations, as determined by United States generally accepted accounting
principles, or U.S. GAAP, and our calculation of EBITDA may not be
comparable to that reported by other companies. EBITDA is included herein
because it is a basis upon which the Company assesses its liquidity
position, it is used by our lenders as a measure of our compliance with
certain loan covenants and because the Company believes that it presents
useful information to investors regarding a company's ability to service
and/or incur indebtedness.
The following table reconciles net cash provided by operating activities to
EBITDA:
31-Mar-08
-----------
Net cash provided by operating activities 17,996
Net increase in current assets 3,506
Net (increase) in current liabilities,
excluding current portion of long term debt (1,958)
Net Interest expense (income) 3,864
Loss in derivative instruments (5,296)
Amortization of stock based compensation (123)
Amortization of imputed deferred revenue 2,565
Amortization of deferred financing costs
included in interest expense (112)
-----------
EBITDA 20,442
===========
Fleet List
The table below describes in detail our fleet development and current
employment profile as of May 20, 2008:
Gross
Year Current Rate per Earliest Latest
Built DWT Type Employment Day Redelivery Redelivery
DRYBULK
Trenton 1995 75,229 Panamax TC $ 26,000 Apr-10 Jun-10
Pierre 1996 70,316 Panamax TC $ 23,000 Jun-10 Oct-10
Austin 1995 75,229 Panamax TC $ 26,000 Apr-10 Jun-10
Juneau 1990 149,495 Capesize TC $ 48,700 Sep-09 Oct-09
Lansing 1996 73,040 Panamax TC $ 24,000 May-09 Sep-09
Helena 1999 73,744 Panamax TC $ 30,000 Jun-08 Aug-08
TC $ 32,000 Apr-12 Dec-12
Topeka 2000 74,710 Panamax TC $ 23,100 Oct-10 May-11
Richmond 1995 75,265 Panamax TC $ 29,100 Dec-09 Apr-10
Augusta 1996 69,053 Panamax TC $ 61,500 Nov-08 Jan-09
TANKERS
Pink Sands 1993 93,723 Aframax TC $ 27,450 Dec-10 Jan-11
Olinda 1996 149,085 Suezmax Spot Market - n/a n/a
TC $ 41,025 Aug-10 Sep-10
Conference Call and Webcast: May 21, 2008, at 10:00 A.M. EDT
OceanFreight management team will host a conference call on May 21, 2008,
at 10:00 a.m. Eastern Daylight Time to discuss the Company's financial
results for the First Quarter 2008.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800
953 0329 (UK Toll Free Dial In) or +44 (0) 1452 542 301 (Standard
International Dial In). Please quote "OceanFreight."
In case of any problem with the above numbers, please dial 1 866 223 0615
(US Toll Free Dial In), 0800 694 1503 (UK Toll Free Dial In) or +44 (0)
1452 586 513 (Standard International Dial In). Quote "OceanFreight."
A telephonic replay of the conference call will be available until
Wednesday, May 28, 2008 by dialling 1 866 247 4222 (US Toll Free Dial In),
0800 953 1533 (UK Toll Free Dial In) or +44 (0) 1452 550 000 (Standard
International Dial In). Access Code: 7445162#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the OceanFreight Inc. website (www.oceanfreightinc.com). Participants to
the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
About OceanFreight Inc.
OceanFreight Inc. was incorporated in 2006 to acquire high quality
secondhand vessels and deploy them on medium and long term charters. The
Company began operations with the delivery of its first vessel in June 2007
and currently owns and operates a fleet of eleven vessels, consisting of
one Capesize drybulk carrier, eight Panamax drybulk carriers, one Suezmax
tanker and one Aframax tanker with a total carrying capacity of 978,889
dwt.
OceanFreight's Inc. common stock is listed on the NASDAQ Global Market
where it trades under the symbol "OCNF."
Visit our website at www.oceanfreight.com.
Forward-Looking Statement
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 OceanFreight 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, OceanFreight
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 charterhire rates and vessel values, changes in demand
that may affect attitudes of time charterers to scheduled and unscheduled
drydocking, changes in OceanFreight Inc.'s operating expenses, including
bunker prices, dry-docking and insurance costs, or actions taken by
regulatory authorities, potential liability from pending or 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
OceanFreight Inc. with the US Securities and Exchange Commission.
Contact Information: Company Contact: Michael Gregos Chief Operating Officer Tel: +30-210-809-0514 E-mail: management@oceanfreightinc.com Investor Relations/Media: Nicolas Bornozis Capital Link, Inc. (New York) Tel: +1-212-661-7566 E-mail: nbornozis@capitallink.com