- For the first quarter of 2009, net income was $22.5 million versus net income of $16.7 million for the first quarter of 2008, an increase of approximately 34%.
- For the first quarter of 2009, total revenue was $45.1 million versus total revenue of $41.7 million for the first quarter of 2008, an increase of approximately 8%.
- Earnings per share, basic and diluted for the first quarter of 2009 were $0.37 based on a weighted average of 60,390,219 shares outstanding, basic and diluted.
- Earnings per share, basic and diluted for the first quarter of 2009 were $0.16, excluding non-cash items.
- EBITDA for the first quarter of 2009 was $40.8 million. Adjusted EBITDA for the same period excluding all the above was $27.8 million.
Fleet Profile (As of May 25, 2009)
Vessel Name Type DWT Year Built
------------ -------- --------- ----------
Star Alpha Capesize 175,075 1992
Star Beta Capesize 174,691 1993
Star Sigma Capesize 184,403 1991
Star Ypsilon Capesize 150,940 1991
Star Gamma Supramax 53,098 2002
Star Delta Supramax 52,434 2000
Star Epsilon Supramax 52,402 2001
Star Zeta Supramax 52,994 2003
Star Theta Supramax 52,425 2003
Star Kappa Supramax 52,055 2001
Star Omicron Supramax 53,489 2005
Star Cosmo Supramax 52,247 2005
Grand Total 12 1,106,253
First Quarter 2009 Results
For the quarter ended March 31, 2009, total revenues amounted to $45.1
million versus $41.7 million for the quarter ended March 31, 2008 mainly
due to the operation of a larger fleet offset by lower charter rates
achieved for some of our vessels. Operating income amounted to $25.2
million for the quarter ended March 31, 2009 compared to operating income
of $17.7 million for the quarter ended March 31, 2008. Net Income for the
first quarter of 2009 amounted to $22.5 million representing $0.37 earnings
per share calculated on 60,390,219 weighted average number of shares. Net
Income for the first quarter of 2008 amounting to $16.7 million represents
$0.37 earnings per share calculated on 45,189,990 weighted average number
of shares, basic and $0.34 earnings per share calculated on 49,827,425
weighted average number of shares, diluted.
The first quarter of 2009 net income figure includes the following non-cash items: -- Amortization of fair value of below/above market acquired time charters of $6.4 million, or $0.11 per basic and diluted share, attributable to the amortization of the fair value of time charters attached to vessels acquired, which are amortized over the remaining period of the time charter into revenue. -- A gain of $10.9 million or $0.18 per basic and diluted share associated with the gain on the time charter agreement termination which mainly relates to the unamortized fair value of below market acquired time charter on a vessel early redelivery date. -- Expenses of $1.5 million, or $0.02 per basic and diluted share relating to the amortization of stock based compensation recognized in connection with the 1,385,000 restricted shares (vested and unvested) issued to directors and employees. -- An unrealized loss of $2.8 million or $0.05 per basic and diluted share associated with the mark-to-market valuation of the Company's Forward Freight Agreements. The first quarter of 2008 net income figure includes the following non-cash items: -- Amortization of fair value of below/above market acquired time charters of $17.9 million, or $0.40 and $0.36 per basic and diluted share, respectively, attributable to the amortization of the fair value of time charters attached to vessels acquired, which are amortized over the remaining period of the time charter into revenue. -- Expenses of $1.4 million, or $0.03 per basic and diluted share relating to the amortization of stock based compensation recognized in connection with the 165,000 restricted shares (vested and unvested) issued to directors and employees. -- Vessel impairment loss of $4.1 million, or $0.09 per basic and $0.08 per diluted share, in connection with the sale of the vessel Star Iota.EBITDA for the first quarter of 2009 was $40.8 million as compared to $26.6 million for the quarter ended March 31, 2008. Adjusted EBITDA for the first quarter of 2009 and 2008 excluding all the above items was $27.8 million and $10.1 million respectively. A reconciliation of EBITDA and adjusted EBITDA to net cash provided by cash flows from operating activities is set forth below. An average of 12 and 8.1 vessels were owned and operated during the first quarter of 2009 and 2008, respectively, earning an average Time Charter Equivalent, or TCE rate of $35,158 per day and $35,767 per day, respectively. We refer you to the information under the heading "Summary of Selected Data" later in this release for further information regarding our calculation of TCE rate. Total expenses increased to $31.1 million for the three month period ended March 31, 2009 compared to $24.0 million for the three-month period ended March 31, 2008 due to higher vessel operating and voyage expenses and depreciation related to the operation of a larger fleet. Vessel operating expenses were $6.7 million for the first quarter of 2009 compared to $4.6 million for the same period last year. The increase in vessel operating expenses was due to the operation of a larger fleet, higher crewing and insurance expenses. Depreciation expenses increased approximately 76% to $15.7 million for the first quarter of 2009 from $8.9 million for the first quarter of 2008 mainly due to the growth of our fleet. General and administrative expenses amounted to $2.9 million for the quarter ended March 31, 2009 and $2.8 million for the quarter ended March 31, 2008, respectively. Therefore, on per vessel and per day basis, general and administrative expenses decreased by approximately 31%. This decrease is mainly due to the increase in the number of vessels during the three month period ended March 31, 2009. Liquidity and Capital Resources Cash Flow Net cash provided by operating activities for the three months ended March 31, 2009 and 2008, was $24.6 million and $16.8 million, respectively. Net cash provided by operating activities for the three month period ended March 31, 2009 was primarily a result of recorded net income of $22.5 million, adjusted for depreciation of $15.7 million and fair value of derivatives of $2.8 million, offset by amortization of fair value of below/above market acquired time charter agreements of $6.4 million and non-cash gain on time charter agreement termination of $10.9 million. Net cash provided by operating activities for the three months ended March 31, 2008 was primarily a result of recorded net income of $16.7 million, adjusted for depreciation and the vessel impairment loss related to the sell of vessel Star Iota of $12.9 million offset by the amortization of fair value of below/above market acquired time charter agreements of $17.9 million. Net cash used in investing activities for the three months ended March 31, 2009 and 2008, was $20.0million and $143.0 million, respectively. For the three month period ended March 31, 2009, there was no actual cash used in investing activities due to the lack of acquisitions and/or sales of vessels during the period, although, there was an increase in restricted cash of $20.0 million related to waivers obtained for the existing loan agreements. For the three months ended March 31, 2008 the cash used in investing activities related mainly to the payment of the cash consideration of $115.7 million due to the delivery of the remaining five vessels of our initial fleet, the payment of $17.3 million representing the 10% of the purchase price of the vessels Star Omicron and Star Sigma and $10.0 million related to the increase in restricted cash. Net cash used in financing activities for the three months ended March 31, 2009 was $10.1 million as compared to $146.9 million of net cash provided by financing activities for the three months ended March 31, 2008. For the three months ended March 31, 2009, net cash used in financing activities consisted of the payments of loan installments amounting to $12.0 million offset by cash provided from our Director's dividend reinvestment of $1.9 million. For the quarter ended March 31, 2008, net cash provided by financing activities consisted of the drawdown of $120.0 million related to our loan facilities and the proceeds from exercise of warrants of $32.8 million mainly offset by the payment of cash dividends of $4.6 million. Drydocking expenses We estimate that one of our vessels will be drydocked in the second quarter of 2009. An additional two vessels will be drydocked for the remaining of 2009. We estimate our scheduled off-hire days related to drydocking for our fleet through 2009 to be:
Drydocking Estimated
Vessels Period drydocking days
--------------- ---------------
Star Ypsilon 2nd Q 48
Star Epsilon 3rd Q 20
Star Kappa 3rd Q 20
Summary of Selected Data
(TCE rate expressed in U.S. dollars)
3-months Ended 3-months Ended
March 31, 2008 March 31, 2009
--------------- ---------------
Average number of vessels (1) 8.1 12.0
Number of vessels (as of the last day of
the periods reported) 9 12
Average age of operational fleet
(in years) (2) 10.2 9.9
Ownership days (3) 737 1,080
Available days (4) 662 1,056
Voyage days for fleet (5) 647 1,037
Fleet Utilization (6) 98% 98%
Time charter equivalent rate (7) 35,767 35,158
(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) Average age of operational fleet is calculated as at March 31, 2008 and 2009, respectively. (3) Ownership days are the total calendar days each vessel in the fleet was owned by Star Bulk for the relevant period. (4) Available days for the fleet are the ownership days after subtracting for off-hire days with major repairs, dry-docking or special or intermediate surveys or transfer of ownership. (5) Voyage days are the total days the vessels were in our possession for the relevant period after subtracting all off-hire days incurred for any reason (including off-hire for dry-docking, major repairs, special or intermediate surveys). (6) Fleet utilization is calculated by dividing voyage days by available days for the relevant period and takes into account the dry-docking periods. (7) Represents the weighted average time charter equivalent, or TCE, of our entire fleet. TCE rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses and amortization of fair value of above/below market acquired time charter agreements) 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 rate 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. We included TCE revenues, a non-GAAP measure, as it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE rate is also included herein because it 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 and because we believe that it presents useful information to investors. EBITDA and adjusted EBITDA Reconciliation Star Bulk Carriers Corp. considers EBITDA to represent net income before interest, income 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 the Company's ability to service and/or incur indebtedness. The Company excluded amortization of the fair value of above/below market acquired time charters associated with time charters attached to vessels acquired, the unrealized loss resulting from Forward freight agreements and expenses relating to the amortization of stock-based compensation recognized during the period , to derive adjusted EBITDA.
The following table reconciles net cash provided by operating activities to
EBITDA and adjusted EBITDA:
3-months 3-months
period ended period ended
(Expressed in thousands of U.S. dollars) March 31, 2008 March 31, 2009
-------------- --------------
Net cash provided by operating activities 16,821 24,551
Net increase in current assets 1,610 2,888
Net decrease in current liabilities,
excluding current portion of long term debt (5,192) (2,311)
Amortization of fair value of above/below
market acquired time charter agreements 17,896 6,364
Amortization of deferred finance charges (17) (56)
Non-cash gain on time charter agreement
termination - 10,919
Vessel impairment loss (4,054) -
Stock - based compensation (1,433) (1,452)
Change in fair value of derivatives - (2,788)
Net Interest expense 968 2,719
-------------- --------------
EBITDA 26,572 40,834
============== ==============
Less:
Amortization of fair value of above/below
market acquired time charter agreements (17,896) (6,364)
Non-cash gain on time charter agreement
termination - (10,919)
Plus:
Stock - based compensation 1,433 1,452
Change in fair value of derivatives - 2,788
-------------- --------------
Adjusted EBITDA 10,136 27,791
============== ==============
Unaudited Consolidated Condensed Income Statements
3-month period 3-month period
(Expressed in thousands of U.S. dollars ended ended
except for share and per share data) March 31, 2008 March 31, 2009
-------------- --------------
Unaudited Unaudited
Revenues:
Hire voyage revenue 23,826 38,386
Freight voyage revenue - 2,846
Straight line adjustment, and amortization
of fair value of below/above market
acquired time charters 17,869 3,883
-------------- --------------
Total Revenues: 41,695 45,115
Expenses:
Voyage expenses (685) (2,306)
Vessel operating expenses (4,555) (6,721)
Drydocking expenses (2,794) (262)
Depreciation (8,881) (15,661)
Management fees (250) (285)
Loss on FFA's* - (3,023)
Vessel impairment loss (4,054) -
General and administrative expenses (2,785) (2,863)
-------------- --------------
Total expenses (24,004) (31,121)
Other income:
Gain on time charter agreement termination - 11,179
-------------- --------------
Operating income: 17,691 25,173
-------------- --------------
Other income / (expenses):
Interest and finance costs (1,367) (2,742)
Interest income 399 23
-------------- --------------
Total other income (expenses), net: (968) (2,719)
-------------- --------------
-------------- --------------
Net income: 16,723 22,454
============== ==============
Earnings per share, basic 0.37 0.37
============== ==============
Earnings per share, diluted 0.34 0.37
============== ==============
Weighted average number of shares
outstanding, basic 45,189,990 60,390,219
============== ==============
Weighted average number of shares
outstanding, diluted 49,827,425 60,390,219
============== ==============
*Realized and unrealized losses are included.
Unaudited Consolidated Condensed Balance Sheets
(Expressed in thousands of U.S. dollars)
December 31, March 31,
2008 2009
ASSETS
Cash and restricted cash 31,961 46,210
Deposit on forward freight agreement 2,514 5,127
Other current assets 7,798 8,448
------------ ------------
TOTAL CURRENT ASSETS 42,273 59,785
Fixed assets 821,284 805,627
Restricted Cash 12,010 12,010
Other non-current assets 15,809 14,116
------------ ------------
TOTAL ASSETS 891,376 891,538
============ ============
Current portion of long term debt 49,250 53,550
Other current liabilities 8,037 12,266
------------ ------------
TOTAL CURRENT LIABILITIES 57,287 65,816
Long term debt 247,250 230,950
Other non-current liabilities 26,699 8,841
------------ ------------
TOTAL LIABILITIES 331,236 305,607
STOCKHOLDERS' EQUITY 560,140 585,931
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 891,376 891,538
============ ============
Unaudited Cash flow Data
(Expressed in thousands of U.S. dollars)
3-months 3-months
period ended period ended
March 31, 2008 March 31, 2009
-------------- --------------
Net cash provided by operating activities 16,821 24,551
Net cash used in investing activities (142,555) (20,004)
Net cash provided by/(used in) financing
activities 146,861 (10,114)
Conference Call details:
Star Bulk's management team will host a conference call to discuss the
Company's financial results tomorrow, Thursday May 28, 2009, at 9:00 a.m.
EDT.
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329
(from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote
"Star Bulk."
A replay of the conference call will be available until June 4, 2009. The
United States replay number is 1(866) 247-4222; from the UK 0(800)
953-1533; the standard international replay number is (+44) (0) 1452 550
000 and the access code required for the replay is: 3128607#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the Star Bulk website (www.starbulk.com). Participants to the live webcast
should register on the website approximately 10 minutes prior to the start
of the webcast.
About Star Bulk
Star Bulk is a global shipping company providing worldwide seaborne
transportation solutions in the dry bulk sector. Star Bulk's vessels
transport major bulks, which include iron ore, coal and grain and minor
bulks such as bauxite, fertilizers and steel products. Star Bulk was
incorporated in the Marshall Islands on December 13, 2006 and is
headquartered in Athens, Greece. Its common stock and warrants trade on the
Nasdaq Global Market under the symbols "SBLK" and "SBLKW" respectively.
Currently, Star Bulk has an operating fleet of twelve dry bulk carriers.
The total fleet consists of four Capesize, and eight Supramax dry bulk
vessels with an average age of approximately 10.1 years and a combined
cargo carrying capacity of 1,106,253 deadweight tons.
Forward-Looking Statements
The information in this press release may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include, but are not limited to,
statements regarding: (1) the delivery and operation of assets of Star
Bulk; (2) Star Bulk's future operating or financial results; (3) future,
pending or recent acquisitions, business strategy, areas of possible
expansion, and expected capital spending or operating expenses; (4) drybulk
market trends, including charter rates and factors affecting vessel supply
and demand; and (5) other statements identified by words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend," "should,"
"may," or words of similar meaning.
Such forward-looking statements are based upon various assumptions, many of
which are based, in turn, upon further assumptions, including without
limitation, Star Bulk's examination of historical operating trends, data
contained in their records and other data available from third parties.
Although Star Bulk 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 its control, Star Bulk cannot assure you that Star
Bulk will achieve or accomplish these expectations, beliefs or projections.
Important factors that could cause actual results to differ materially from
those discussed in the forward-looking statements include the failure of a
seller to deliver one or more vessels, 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 Star
Bulk'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. Additional factors
that could cause Star Bulk's results to differ materially from those
described in the forward-looking statements can be found in Star Bulk's
Registration Statement on Form F-1/F-4, Annual Reports on Forms 20-F for
the years ended December 31, 2007 and 2008, in Registration Statement on
Form F-3 filled in September 2008 and its amendments, in Registration
Statement on Form F-3 filled in January 2009 and its amendments, and
reports on Form 6-K filed with the Securities and Exchange Commission (the
"SEC") and available at the SEC's Internet site (http://www.sec.gov). The
information set forth herein speaks only as of the date hereof, and Star
Bulk disclaims any intention or obligation to update any forward-looking
statements as a result of developments occurring after the date of this
communication.
Contact Information: Company: George Syllantavos CFO Star Bulk Carriers Corp. 7 Fragoklisias Str. Maroussi 15125 Athens, Greece www.starbulk.com E-mail: ir@starbulk.com Investor Relations / Financial Media: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: starbulk@capitallink.com www.capitallink.com