Fourth Quarter Revenue Increases 64% 2008 Net Income Improves 18%
NEW YORK, March 2, 2009 (GLOBE NEWSWIRE) -- Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today announced its results for the fourth quarter and fiscal year ended December 31, 2008.
Financial highlights included:
For the Fourth Quarter: * Net income was $15.1 million or $0.32 per share after adjusting for one time write-offs of deferred financing and other costs relating to amendments to the Company's debt and newbuilding program. * Net Income of $9.16 million or $0.20 per share (based on a weighted average of 46,915,087 diluted shares outstanding for the quarter) on net revenues of $60 million. * Gross time charter revenue increased by $24.4 million, or 64%, to $62.4 million for the fourth quarter of 2008, from $38.0 million for the fourth quarter of 2007. * EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 20% to $33.5 million for the fourth quarter of 2008, from $27.9 million during the fourth quarter of 2007. * Fleet utilization rate for the fourth quarter was 99.5%. * Took delivery of two newbuilding vessels, Woodstar and Crowned Eagle, which immediately entered their respective time charters. For Fiscal Year 2008: * Net income was $67.6 million or $1.44 per share after adjusting for one time write-offs of deferred financing and other costs relating to amendments to the Company's debt and newbuilding program. * Net Income of $61.6 million, or $1.31 per share (based on a weighted average of 46,888,788 diluted shares outstanding for the period) on net revenues of $185.4 million. * Gross time charter revenue increased by $58.8 million, or 43%, to $194.3 million, compared to $135.4 million for the 2007 fiscal year * EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased 28% to $127.7 million in 2008 from $99.4 million in 2007. * Fleet utilization rate for the fourth quarter was 99.5%. * Acquired two vessels, Goldeneye and Redwing, and took delivery of three newbuilding vessels, Wren, Woodstar and Crowned Eagle, which immediately entered their respective time charters.
Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, "We are very pleased we maintained profitability in the fourth quarter and generated steady cash flow in challenging global markets. This performance underscores the relative stability of the Supramax asset class amid unprecedented market conditions, as well as management's conservative chartering strategy, which now includes increased contract coverage of 74% for 2009."
Mr. Zoullas continued, "The Company also took proactive, strategic steps during the fourth quarter to reduce capital expenditures and increase liquidity - actions which strengthened the Company's operating profile amid industry volatility. Going forward, we believe Eagle Bulk's demonstrated ability to adapt to changing market conditions while maintaining operational excellence positions the Company to generate long-term value for shareholders."
Results for the three months ended December 31, 2008 and 2007
For the fourth quarter of 2008, the Company reported net income of $9,159,252 or $0.20 per share, based on a weighted average of 46,915,087 diluted shares outstanding. Net income included one-time write-offs of deferred financing and other costs aggregating $5,972,589 relating to amendments to the Company's debt and newbuilding program. Excluding these non-cash charges, net income for the quarter was $15,131,841 or $0.32 per share.
In the comparable fourth quarter of 2007, the Company reported net income of $16,329,603 or $0.35 per share, based on a weighted average of 46,948,385 diluted shares outstanding.
All of the Company's revenues were earned from time charters. Gross revenues in the quarter ended December 31, 2008 were $62,410,576, an increase of 64% from the $37,990,223 recorded in the comparable quarter in 2007. Net revenues during the quarter ended December 31, 2008 were $59,962,501 compared to $35,612,521 in the quarter ended December 31, 2007, an increase of 68% primarily due to the operation of a larger fleet and an increase in daily time charter rates. Net revenues recorded in the 2008 quarter include non-cash amortization of fair value below contract value of time charters acquired of $535,487, compared to a non-cash charge of $500,000 recorded in the 2007 quarter which relates to the fair value above contract value of time charters acquired. Brokerage commissions incurred on revenues earned were $2,983,561 and $1,877,702 in the fourth quarters of 2008 and 2007, respectively.
Total operating expenses increased to $43,539,354 in the quarter ended December 31, 2008 from $18,234,292 recorded in the comparable quarter in 2007. The increase was due to higher vessel operating expenses, vessel depreciation and amortization expenses and general and administrative expenses related to operation of a larger fleet. General and administrative expenses in 2008 were impacted primarily by cash and non-cash compensation (performance-based compensation and amortization of restricted stock awards) to the officers and staff, and by administrative costs associated with operating a larger fleet, including the extensive newbuilding program.
EBITDA, adjusted for exceptional items under the terms of the Company's credit agreement, increased by 20% to $33,474,374 for the fourth quarter of 2008, from $27,889,885 for the fourth quarter of 2007. (Please see below for a reconciliation of EBITDA to net income).
Results for the years ended December 31, 2008 and 2007
For the year ended December 31, 2008, the Company reported net income of $61,632,809 or $1.31 per share, based on a weighted average of 46,888,788 diluted shares outstanding. Net income included one-time write-offs of deferred financing and other costs aggregating $5,972,589 relating to amendments to the Company's debt and newbuilding program. Excluding these non-cash charges, net income for the year was $67,605,398 or $1.44 per share.
In the comparable year ended December 31, 2007, the Company reported net income of $52,243,981 or $1.24 per share, based on a weighted average of 42,195,561 diluted shares outstanding.
All of the Company's revenues were earned from Time Charters. Gross revenues for the year ended December 31, 2008 were $194,253,142, an increase of 43% from the $135,412,594 recorded in 2007. Net revenues for the year ended December 31, 2008 were $185,424,949 compared to $124,814,804 for 2007, an increase of 49% primarily due to the operation of a larger fleet and an increase in daily time charter rates. Net revenues in 2008 include non-cash amortization of the fair value below contract value of time charters acquired of $799,540, compared to a net non-cash charge of $3,740,000 recorded in 2007 which relates to the fair value above and below contract value of time charters acquired. Brokerage commissions incurred on revenues earned were $9,627,733 and $6,857,790 in 2008 and 2007, respectively.
Total operating expenses in 2008 increased to $108,669,180 from $64,483,104 in 2007. The increase in expenses is attributable to a larger fleet size in operation for 2008 which increased ownership days to 7,229 days in 2008 from 6,166 days in 2007, and increases in costs for crew, insurance and lubricants. Expenses were also impacted by higher general and administrative expenses primarily in cash and non-cash compensation (performance-based compensation and amortization of restricted stock awards) to the officers and staff, and by administrative costs associated with operating a larger fleet, including the extensive newbuilding program.
EBITDA, adjusted for exceptional items under the terms of the Company's credit agreement, increased by 28% to $127,683,156 in 2008, from $99,417,510 in 2007. (Please see below for a reconciliation of EBITDA to net income).
Newbuilding Program
In 2007, the Company had entered into a 35 vessel newbuilding program, which includes 30 vessels to be constructed in China and 5 vessels in Japan. The Chinese contracts and the associated time charters were acquired from a privately held company. In 2008, the Company took delivery of its first two Chinese built newbuilding vessels and a Japanese built vessel.
In December 2008, the Company amended its vessel newbuilding program in China by converting the firm construction contracts on eight charter-free vessels into options. All of the contract deposits on these option vessels, representing approximately $47 million, were redirected as progress payments towards vessels being constructed for delivery in 2009. The Company also deferred delivery of a vessel, THRUSH, from September 2009 to November 2010. These changes in the newbuilding program resulted in a reduction of the Company's capital expenditure program by a total of $363 million. The carrying value of the advanced payments in connection with the acquisition of the construction contracts and the cost of the eight newly converted shipbuilding contract options were in excess of the fair value of the eight options, and as such, the Company recorded an impairment charge of $3,882,888 to write-off the carrying value of the vessel contracts converted into options.
As of December 31, 2008, the Company had outstanding contracts for the construction of 20 vessels in China and 4 vessels in Japan, deliveries of which are scheduled between 2009 and 2011. The Company has recorded advances of $411,063,011 towards the construction cost of these 24 vessels. These costs include capitalized interest on debt drawn for the progress payments, insurance, legal, and technical supervision costs. (Table below provides anticipated delivery dates on the newbuilding fleet).
The contracts for vessel construction in China are US dollar based. However, the contracts for vessel construction in Japan are yen based, and the Company had entered into foreign exchange swaps to hedge foreign currency risks to its vessel newbuilding contracts in Japan. At December 31, 2008, the Company had outstanding foreign currency swap contracts for notional amounts aggregating 8.6 billion Japanese yen swapped into the equivalent of $80,378,030. The Company records the fair value of the currency swaps as an asset or liability in its financial statements and the effective portion of the currency swap is recorded in accumulated other comprehensive income. In February 2009, the Company settled its outstanding foreign currency swaps contracts at a gain aggregating $13,673,774. These gains will offset the cost of the vessels upon their delivery from the Japanese shipyard in 2009-2010.
Liquidity and Capital Resources
Net cash provided by operating activities during the years ended December 31, 2008 and 2007 was $109,535,918 and $82,889,373, respectively. The increase was primarily due to cash generated from the operation of the fleet for 7,229 operating days in 2008 compared to 6,166 operating days in 2007.
Net cash used in investing activities during 2008, was $336,657,686. Investing activities during 2008 primarily reflected the purchase of the GOLDENEYE and REDWING, which were delivered in the second and third quarter of 2008, respectively, and advances for the newbuilding vessel construction program.
Net cash provided by financing activities during 2008 was $83,426,938. The Company borrowed $192,358,513 from its revolving credit facility which was used to partly fund the REDWING and fund the advances for the construction of newbuilding vessels, three of which, WREN, WOODSTAR and CROWNED EAGLE delivered during the year. In 2008, the Company also paid $93,592,906 in dividends.
As of December 31, 2008, the cash balance was $9,208,862 compared to a cash balance of $152,903,692 at December 31, 2007. In addition, $11,500,000 in cash deposits are maintained with the Company's lender for loan compliance purposes and this amount is recorded in Restricted Cash on the balance sheet as of December 31, 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 lease.
At December 31, 2008, the Company had outstanding debt of $789,601,403. In December 2008, the Company agreed with its lenders to amend its $1.6 billion revolving credit facility to $1.35 billion and adjusted certain debt covenants. The requirement for the Company to maintain a minimum security value of its fleet, which is now an aggregate of the market value of the vessels in its operating fleet and the deposits on its newbuilding contracts, that secure its obligations under the revolving credit facility has been reduced from 130% to 100% of the aggregate principal amount of debt outstanding under the facility. Future dividend payments will be based on the Company maintaining a minimum security value of 130%. The Minimum Net Worth requirement has been reduced from $300 million to $75 million for next year and is subject to annual review thereafter. The amended facility will bear interest at the rate of 1.75% over LIBOR, and the Company will also pay on a quarterly basis a commitment fee of 0.30% per annum on the undrawn portion of the facility. The amended facility will be available in full until July 2012, following which it will reduce to a balloon of $717.2 million at maturity in July 2017. The facility also provides the Company with the ability to borrow up to $20,000,000 for working capital purposes. In December 2008, commencing with the fourth quarter of 2008, the board of directors of the Company has determined to suspend the payment of a dividend to stockholders in order to increase cash flow, optimize financial flexibility and enhance internal growth.
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 for the three-month periods ended December 31, 2008 and 2007 and for the years ended December 31, 2008 and 2007:
Three Months Three Months ended ended Year ended Year ended December December December 31, December 31, 31, 2008 31, 2007 2008 2007 ------------ ------------ ------------ ------------ Net Income/ (Loss) $ 9,159,252 $ 16,329,603 $ 61,632,809 $ 52,243,981 Interest Expense 5,302,645 2,951,565 15,816,573 12,741,106 Depreciation and Amortization 10,229,942 7,356,135 33,948,840 26,435,646 Amortization of fair value (below) above market of time charter acquired (535,487) 500,000 (799,540) 3,740,000 ------------ ------------ ------------ ------------ EBITDA 24,156,352 27,137,303 110,598,682 95,160,733 Adjustments for Exceptional Items: Write-off of Advances for Vessel Construc- tion(1) 3,882,888 -- 3,882,888 -- Write-off of Financing Fees(1) 2,089,701 -- 2,089,701 -- Non-cash Compensation Expense(2) 3,345,433 752,584 11,111,885 4,256,777 ------------ ------------ ------------ ------------ Credit Agreement EBITDA $ 33,474,374 $ 27,889,887 $127,683,156 $ 99,417,510 ------------ ------------ ------------ ------------ (1) One time charge (see Notes to the financial statements) (2) Stock based compensation related to stock options, restricted stock units, and management's participation in profits interests in Eagle Ventures LLC (see Notes to the Company's financial statements)
Capital Expenditures and Drydocking
The Company's capital expenditures relate to the purchase of vessels and capital improvements to acquired vessels, which are expected to enhance the revenue earning capabilities and safety of these vessels. In addition to the capital expenditures on newbuilding vessels as described above, 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. Although the Company has some flexibility regarding the timing of its drydocking, the costs are relatively predictable. Management anticipates that vessels are to be drydocked every two and a half years. Funding of these requirements is anticipated to be met with cash from operations. The Company anticipates that this process of recertification will require it to reposition these vessels from a discharge port to shipyard facilities, which will reduce available days and operating days during that period.
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. In 2008, the Company spent $2,388,776 in drydocking three vessels, compared to a 2007 expenditure of $3,624,851 for drydocking five vessels. 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) -------------- ---------------- ------------------ March 31, 2009 44 $1.00 million June 30, 2009 22 $0.50 million September 30, 2009 66 $1.50 million December 31, 2009 44 $1.00 million --------------------------------------------------------------------- (1) Actual duration of drydocking 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 for the periods indicated below.
CONSOLIDATED STATEMENTS OF OPERATIONS: Year ended Year ended Three Months Three Months ---------- ---------- ended ended December 31, December 31, December 31, December 31, ------------ ------------ ------------ ------------ 2008 2007 2008 2007 ---- ---- ---- ---- Revenues, net of commissions $185,424,949 $124,814,804 $ 59,962,501 $ 35,612,521 Vessel Expenses 36,270,382 27,143,515 11,338,294 7,393,813 Depreciation and Amortization 33,948,840 26,435,646 10,229,942 7,356,135 General and Administrative Expenses 34,567,070 11,776,511 18,088,230 3,484,344 Gain on Sale of Vessel -- (872,568) -- -- Write-off advances for vessel construction 3,882,888 -- 3,882,888 -- -------------------------- -------------------------- Total Operating Expenses 108,669,180 64,483,104 43,539,354 18,234,292 -------------------------- -------------------------- Operating Income 76,755,769 60,331,700 16,423,147 17,378,229 Interest Expense 15,816,573 12,741,106 5,302,645 2,951,565 Interest Income (2,783,314) (4,653,387) (128,451) (1,902,939) Write-off deferred financing costs 2,089,701 -- 2,089,701 -- -------------------------- -------------------------- Net Interest Expense 15,122,960 8,087,719 7,263,895 1,048,626 -------------------------- -------------------------- Net Income $ 61,632,809 $ 52,243,981 $ 9,159,252 $ 16,329,603 ========================== ========================== Weighted Average Shares Outstanding: Basic 46,800,550 42,064,911 46,915,087 46,727,153 Diluted 46,888,788 42,195,561 46,915,087 46,948,385 Per Share Amounts: Basic Net Income $1.32 $1.24 $0.20 $0.35 Diluted Net Income $1.31 $1.24 $0.20 $0.35 Cash dividends declared and paid $2.00 $1.98 $0.50 $0.50 Fleet Operating Data Number of Vessels in Operating fleet 23 18 23 18 Fleet Ownership Days 7,229 6,166 2,069 1,656 Fleet Available Days 7,172 6,073 2,055 1,633 Fleet Operating Days 7,139 6,039 2,045 1,622 Fleet Utilization Days 99.5% 99.4% 99.5% 99.3% CONSOLIDATED BALANCE SHEETS: December 31, -------------------------------- 2008 2007 -------------- -------------- ASSETS: Current assets: Cash and cash equivalents $ 9,208,862 $ 152,903,692 Accounts receivable 4,357,837 3,392,461 Prepaid expenses 3,297,801 1,158,113 -------------- -------------- Total current assets 16,864,500 157,454,266 -------------- -------------- Noncurrent assets: Vessels and vessel improvements, at cost, net of accumulated depreciation of $84,113,047 and $52,733,604, respectively 874,674,636 605,244,861 Advances for vessel construction 411,063,011 344,854,962 Restricted cash 11,776,056 9,124,616 Deferred drydock costs, net of accumulated amortization of $5,022,649 and $2,453,253, respectively 3,737,386 3,918,006 Deferred financing costs 24,270,060 14,479,024 Fair value above contract value of time charters acquired 4,531,115 -- Fair value of derivative instruments and other assets 15,258,780 932,638 -------------- -------------- Total noncurrent assets 1,345,311,044 978,554,107 -------------- -------------- Total assets $1,362,175,544 $1,136,008,373 ============== ============== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,037,060 $ 3,621,559 Accrued interest 7,523,057 455,750 Other accrued liabilities 3,021,975 1,863,272 Fair value below contract value of time charters acquired 2,863,184 -- Unearned charter hire revenue 5,958,833 4,322,024 -------------- -------------- Total current liabilities 21,404,109 10,262,605 -------------- -------------- Noncurrent liabilities: Long-term debt 789,601,403 597,242,890 Fair value below contract value of time charters acquired 29,205,196 -- Fair value of derivative instruments 50,538,060 13,531,883 -------------- -------------- Total noncurrent liabilities 869,344,659 610,774,773 Total liabilities 890,748,768 621,037,378 -------------- -------------- Commitment and contingencies Stockholders' equity: Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued -- -- Common stock, $.01 par value, 100,000,000 shares authorized, 47,031,300 and 46,727,153 shares issued and outstanding, respectively 470,313 467,271 Additional paid-in capital 614,241,646 602,929,530 Retained earnings (net of dividends declared of $262,118,388 and $168,525,482 as of December 31, 2008 and 2007, respectively) (107,786,658) (75,826,561) Accumulated other comprehensive loss (35,498,525) (12,599,245) -------------- -------------- Total stockholders' equity 471,426,776 514,970,995 -------------- -------------- Total Liabilities and Stockholders' Equity $1,362,175,544 $1,136,008,373 ============== ============== CONSOLIDATED STATEMENTS OF CASH FLOWS: Year Ended December 31, ------------------------------------------- 2008 2007 2006 ------------- ------------- ------------- Cash flows from operating activities Net income $ 61,632,809 $ 52,243,981 $ 33,801,540 Adjustments to reconcile net income to net cash provided by operating activities: Items included in net income not affecting cash flows: Depreciation 31,379,443 24,791,502 21,031,357 Amortization of deferred drydocking costs 2,569,396 1,644,144 781,129 Amortization of deferred financing costs 244,837 242,357 178,246 Write-off of deferred financing costs 2,089,701 -- -- Write-off of advances for vessel construction 3,882,888 -- -- Amortization of fair value (below) above contract value of time charter acquired (799,540) 3,740,000 3,462,000 Gain on sale of vessel -- (872,568) -- Non-cash compensation expense 11,111,885 4,256,777 13,070,473 Changes in operating assets and liabilities: Accounts receivable (965,376) (2,776,256) (335,111) Prepaid expenses (2,139,688) (137,292) (507,676) Accounts payable (1,584,499) 1,971,400 (469,199) Accrued interest 1,707,326 (344,933) 286,052 Accrued expenses 1,158,703 146,148 1,292,455 Drydocking expenditures (2,388,776) (3,624,851) (2,324,726) Unearned charter hire revenue 1,636,809 1,608,964 268,538 ------------- ------------- ------------- Net cash provided by operating activities 109,535,918 82,889,373 70,535,078 Cash flows from investing activities: Vessels and vessel improvements and Advances for vessel construction (336,438,441) (458,262,048) (130,759,211) Purchase of other fixed assets (219,245) -- -- Proceeds from sale of vessel -- 12,011,482 -- ------------- ------------- ------------- Net cash used in investing activities (336,657,686) (446,250,566) (130,759,211) Cash flows from financing activities Issuance of common shares 237,328 239,848,264 33,000,000 Equity issuance costs -- (5,642,117) (2,031,920) Bank borrowings 192,358,513 369,708,070 99,974,820 Repayment of bank debt -- (12,440,000) -- Changes in restricted cash (2,651,440) (2,600,000) 100,000 Deferred financing costs (12,890,502) (12,749,841) (1,340,304) Cash used to net share settle equity awards (34,055) -- -- Cash dividend (93,592,906) (82,134,982) (71,729,500) ------------- ------------- ------------- Net cash provided by financing activities 83,426,938 493,989,394 57,973,096 Net increase/(decrease) in Cash (143,694,830) 130,628,201 (2,251,037) Cash at beginning of period 152,903,692 22,275,491 24,526,528 ------------- ------------- ------------- Cash at end of period $ 9,208,862 $ 152,903,692 $ 22,275,491 ============= ============= ============= Supplemental cash flow information: Cash paid during the period for Interest (including Capitalized interest of $$20,417,206, $8,775,957 and $126,702 in 2008, 2007 and 2006, respectively, and Commitment Fees) $ 33,938,068 $ 21,807,953 $ 10,321,584
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 December 31, 2008:
-------------------------------------------------------------------- Daily Time Year Time Charter Charter Hire Vessel Built Dwt Expiration (1) Rate ------ ----- --- -------------- ------------ Cardinal 2004 55,362 Jun to $62,000 Sep 2009 Condor 2001 50,296 August 2009 $20,500 May to July 2010 $22,000 Falcon (2) 2001 51,268 April to June 2010 $39,500 Griffon 1995 46,635 March 2009 $20,075 Harrier (3) 2001 50,296 June 2009 to September 2009 $24,000 Hawk I 2001 50,296 April 2009 to June 2009 $22,000 Heron (4) 2001 52,827 January 2011 to May 2011 $26,375 Jaeger (5) 2004 52,248 October 2009 to January 2010 $10,100 Kestrel I 2004 50,326 January 2009 $20,000 February 2009 $8,500 April 2009 $18,000 Kite 1997 47,195 September 2009 to January 2010 $21,000 Merlin (6) 2001 50,296 December 2010 to March 2011 $25,000 Osprey I (7) 2002 50,206 October 2009 to December 2009 $25,000 Peregrine 2001 50,913 January 2009 $20,500 December 2009 to March 2010 $8,500 Sparrow 2000 48,225 February 2010 to May 2010 $34,500 Tern 2003 50,200 February 2009 $20,500 December 2009 to March 2010 $8,500 Shrike 2003 53,343 April 2009 to July 2009 $24,600 May 2010 to August 2010 $25,600 Skua (8) 2003 53,350 May 2009 to August 2009 $24,200 Kittiwake 2002 53,146 July 2009 to September 2009 $56,250 Goldeneye 2002 52,421 May 2009 to July 2009 $61,000 Wren (9) 2008 53,349 Feb 2012 $24,750 Feb 2012 to Dec 2018/ Apr 2019 $18,000 (with profit share) Redwing 2007 53,411 August 2009 to October 2009 $50,000 Woodstar (10) 2008 53,390 Jan 2014 $18,300 Jan 2014 to December 2018/ Apr 2019 $18,000 (with profit share) Crowned Eagle 2008 55,940 September 2009 -December 2009 $16,000 --------------------------------------------------------------------- (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 1.25% to 6.25%, to third party ship brokers. (2)The charterer of the FALCON has an option to extend the charter period by 11 to 13 months at a daily time charter rate of $41,000. (3)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. (4)The charterer of the HERON has an option to extend the charter period by 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. (5)In December 2008, the JAEGER commenced a charter for one year at an average daily rate of approximately $10,100 based on a charter rate of $5,000 per day for the first 50 days and $11,000 per day for the balance of the year. (6)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. (7)The charterer of the OSPREY has an option to extend the charter period by 11 to 13 months at a time charter rate of $25,000 per day. (8)The charterer of the SKUA has an option to extend the charter period by 11 to 13 months at a daily time charter rate of $25,200. (9)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. (10)The WOODSTAR has entered into a long-term charter. The charter rate until January 2014 is $18,300 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 $18,152.
As of December 31, 2008, the Company has contracts for 24 vessels to be constructed, and options for the construction of another 8 vessels. The following table represents certain information about the Company's newbuilding vessels and their employment upon delivery:
--------------------------------------------------------------------- Year Built - Expected Time Charter Vessel Dwt Delivery (1) Employment Expiration (2) ------ --- ------------ ------------------------- Crested Eagle 56,000 Feb 2009 January 2010 - March 2010 Stellar Eagle 56,000 Apr 2009 Charter Free Bittern 58,000 Sep 2009 Dec 2014 Dec 2014 to Dec 2018/Apr 2019 Canary 58,000 Oct 2009 Jan 2015 Jan 2015 to Dec 2018/Apr 2019 Thrasher 53,100 Nov 2009 Feb 2016 Feb 2016 to Dec 2018/Apr 2019 Crane 58,000 Nov 2009 Feb 2015 Feb 2015 to Dec 2018/Apr 2019 Avocet 53,100 Dec 2009 Mar 2016 Mar 2016 to Dec 2018/Apr 2019 Egret (4) 58,000 Dec 2009 Sep 2012 to Jan 2013 Gannet (4) 58,000 Jan 2010 Oct 2012 to Feb 2013 Golden Eagle 56,000 Jan 2010 Charter Free Imperial Eagle 56,000 Feb 2010 Charter Free Grebe(4) 58,000 Feb 2010 Nov 2012 to Mar 2013 Ibis (4) 58,000 Mar 2010 Dec 2012 to Apr 2013 Jay 58,000 Apr 2010 Sep 2015 Sep 2015 to Dec 2018/Apr 2019 Kingfisher 58,000 May 2010 Oct 2015 Oct 2015 to Dec 2018/Apr 2019 Martin 58,000 Jun 2010 Dec 2016 to Dec 2017 Thrush 53,100 Nov 2010 Charter Free Nighthawk 58,000 Mar 2011 Sep 2017 to Sep 2018 Oriole 58,000 Jul 2011 Jan 2018 to Jan 2019 Owl 58,000 Aug 2011 Feb 2018 to Feb 2019 Petrel (4) 58,000 Sep 2011 Jun 2014 to Oct 2014 Puffin (4) 58,000 Oct 2011 Jul 2014 to Nov 2014 Roadrunner (4) 58,000 Nov 2011 Aug 2014 to Dec 2014 Sandpiper (4) 58,000 Dec 2011 Sep 2014 to Jan 2015 CONVERTED INTO OPTIONS ---------------------- Snipe (6) 58,000 Jan 2012 Charter Free Swift (6 58,000 Feb 2012 Charter Free Raptor (6) 58,000 Mar 2012 Charter Free Saker (6) 58,000 Apr 2012 Charter Free Besra (5,6) 58,000 Oct 2011 Charter Free Cernicalo (5,6) 58,000 Jan 2011 Charter Free Fulmar (5,6) 58,000 Jul 2011 Charter Free Goshawk (5,6) 58,000 Sep 2011 Charter Free Daily Time Charter Vessel Hire Rate (3) Profit Share ------ ------------- ------------ Crested Eagle $10,500 -- Stellar Eagle -- -- Bittern $18,850 -- $18,000 50% over $22,000 Canary $18,850 -- $18,000 50% over $22,000 Thrasher $18,400 -- $18,000 50% over $22,000 Crane $18,850 -- $18,000 50% over $22,000 Avocet $18,400 -- $18,000 50% over $22,000 Egret (4) $17,650 50% over $20,000 Gannet (4) $17,650 50% over $20,000 Golden Eagle -- -- Imperial Eagle -- -- Grebe(4) $17,650 50% over $20,000 Ibis (4) $17,650 50% over $20,000 Jay $18,500 50% over $21,500 $18,000 50% over $22,000 Kingfisher $18,500 50% over $21,500 $18,000 50% over $22,000 Martin $18,400 -- Thrush -- -- Nighthawk $18,400 -- Oriole $18,400 -- Owl $18,400 -- Petrel (4) $17,650 50% over $20,000 Puffin (4) $17,650 50% over $20,000 Roadrunner (4) $17,650 50% over $20,000 Sandpiper (4) $17,650 50% over $20,000 CONVERTED INTO OPTIONS ---------------------- Snipe (6) -- -- Swift (6) -- -- Raptor (6) -- -- Saker (6) -- -- Besra (5,6) -- -- Cernicalo (5,6) -- -- Fulmar (5,6) -- -- Goshawk (5,6) -- -- ---------------------------------------------------------------------- (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 rate presented are gross daily charter rates before brokerage commissions ranging from 1.25% to 6.25% to third party ship brokers. (4)The charterer has an option to extend the charter by 2 periods of 11 to 13 months each. (5)Options for construction declared on December 27, 2007. (6)Firm contracts converted to options in December 2008
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 Tuesday, March 3, 2009, to discuss these results.
To participate in the teleconference, investors and analysts are invited to call 800-573-4754 in the U.S., or 617-224-4325 outside of the U.S., and reference participant code 43486212. 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 March 20, 2009. To access the replay, call 888-286-8010 in the U.S., or 617-801-6888 outside of the U.S., and reference passcode 48107085.
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.
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