ATHENS, Greece, Aug. 10 /PRNewswire-FirstCall/ -- TOP Ships Inc.
(NASDAQ: TOPS) today announced its operating results for the second
quarter and first half of 2009. For the three months ended June 30,
2009, the Company reported a net loss of $15,949,000, or $0.58 per
share, compared with a net loss of $5,589,000, or $0.22 per share,
for the second quarter of 2008. The results for the second quarter
of 2009 include net expenses of $11,786,000 relating to the
termination of leases. Excluding these expenses, the net loss
becomes $4,163,000, or $0.15 per share. Second quarter operating
loss was $11,502,000 for 2009, compared with operating income of
$7,078,000 for the corresponding period in 2008. Excluding net
expenses of $11,786,000 relating to the termination of leases,
operating loss turns into an operating income of $284,000. Revenues
for the second quarter of 2009 were $28,636,000, compared to
$76,687,000 recorded in the second quarter of 2008. For the six
months ended June 30, 2009, the Company reported a net loss of
$14,579,000, or $0.53 per share, compared with a net loss of
$24,430,000, or $1.07 per share, for the first half of 2008.
Excluding the net expenses of $11,786,000, relating to the
termination of leases, the net loss becomes $2,793,000, or $0.10
per share. For the six months ended June 30, 2009, operating loss
was $9,145,000 compared with operating income of $4,644,000 for the
first half of 2008. Excluding net expenses of $11,786,000 relating
to the termination of leases, operating loss turns into an
operating income of $2,641,000. Revenues for the six-month period
ended June 30, 2009 were $58,429,000, compared to $149,324,000
recorded in the first half of 2008. Evangelos J. Pistiolis,
President and Chief Executive Officer of TOP Ships Inc., commented:
"Despite our negative results, we are happy to report that we have
concluded two very important milestones in the history of our
company: the termination of our last leases involving five old
vessels and the completion of our newbuilding program in a very
tough financial environment. In the current shipping and general
economic environment, we believe that we are better positioned than
many other companies in the industry, and we want to convey to the
market the current positive characteristics of TOP Ships, which in
nutshell are the following: -- No capital commitments. -- Cash flow
from operations is expected to be positive for the full second half
of 2009 and for the full year of 2010. -- Very young fleet. Our
owned fleet is made up of 13 vessels; eight product tankers with an
average age of less than two years and five dry bulk vessels with
an average age of 8.4 years -- 80% of our total ship days until the
end of 2011 are under fixed employment, and the gross revenue of
these charters totals approximately $200 million. Looking further
ahead, 73% of our total ship days until the end of 2012 are under
fixed employment, and the gross revenue of these charters totals
approximately $250 million. I would like to stress that our banks
have been very supportive to our plans and actions since the
beginning of the year, which can be proven from the fact that we
have received waivers from all five banks in relation to certain
covenant breaches that occurred on December 31, 2008." The
following indicators serve to highlight the operational performance
of the Company's current fleet during the second quarter and
six-month periods ended June 30, 2009 and 2008: Current Fleet Data
Three Months Ended - Six Months Ended - March 31, March 31, 2008
2009 2008 2009 Total calendar days for fleet (1) 1,092 1,469 2,028
2,646 Total available days for fleet (2) 1,046 1,350 1,970 2,456
Total operating days for fleet (3) 1,036 1,327 1,925 2,388 Fleet
utilization (4) 99.0% 98.3% 97.7% 97.2% (1) We define calendar days
as the total days the vessels were in our possession for the
relevant period. Calendar days are an indicator of the size of our
fleet over a period and affect both the amount of revenues and
expenses that we record during a period. (2) We define available
days as the number of calendar days less the aggregate number of
days that our vessels are off-hire due to scheduled repairs or
scheduled repairs under guarantee, vessel upgrades or special
surveys and the aggregate amount of time that we spend positioning
our vessels. Companies in the shipping industry generally use
available days to measure the number of days in a period during
which vessels should be capable of generating revenues. In all
prior filings and reports, available days has never been used. We
have decided to add available days and adjust the calculation
method of utilization in order to be more comparative with most
shipping companies that calculate utilization using available days
divided by operating days. (3) We define operating days as the
number of our available days in a period less the aggregate number
of days that our vessels are off-hire due to unforeseen
circumstances. The shipping industry uses operating days to measure
the aggregate number of days in a period during which the vessels
actually generate revenues. (4) We calculate fleet utilization by
dividing the number of our operating days during a period by the
number of our available days during the period. The shipping
industry uses fleet utilization to measure a company's efficiency
in finding suitable employment for its vessels and minimizing the
number of days that its vessels are off-hire for reasons other than
scheduled repairs or repairs under guarantee, vessel upgrades,
special or intermediate surveys and vessel positioning. In all
prior filings and reports, utilization was calculated by dividing
operating days to calendar days. We have decided to change the
calculation method in order to be more comparative with most
shipping companies, which calculate utilization using available
days divided by operating days. The following table presents the
Company's owned fleet list and employment as of the date of this
release: Profit Sharing Year Charter Daily Base Above Base Dwt
Built Type Expiry Rate Rate (2009) --- ----- ---- ------ ----
----------- Eight Tanker Vessels Dauntless 46,168 1999 Time Q1/2010
$16,250 100% first Charter $1,000 + 50% thereafter Ioannis P.
46,346 2003 Time Q4/2010 $18,000 100% first Charter $1,000 + 50%
thereafter Miss 50,000 2009 Bareboat Q1-2/2019 $14,400 None
Marilena Charter Lichtenstein 50,000 2009 Bareboat Q1-2/2019
$14,550 None Charter Ionian Wave 50,000 2009 Bareboat Q1-2/2016
$14,300 None Charter Thyrrhenian Wave 50,000 2009 Bareboat
Q1-2/2016 $14,300 None Charter Britto 50,000 2009 Bareboat
Q1-2/2019 $14,550 None Charter Hongbo 50,000 2009 Bareboat
Q1-2/2019 $14,550 None Charter Total Tanker dwt 392,514 Five
Drybulk Vessels Cyclades 75,681 2000 Time Q2/2011 $54,250 None
Charter Amalfi 45,526 2000 Time Q3/2009 $16,000 None Charter
Papillon 51,200 2002 Bareboat Q2/2012 $24,000 None (ex Voc Charter
Gallant)* Pepito 75,928 2001 Time Q2/2013 $41,000 None Charter
Astrale 75,933 2000 Time Q2/2011 $18,000 None Charter Total Drybulk
dwt 324,268 TOTAL DWT 716,782 * During August 2009, the bareboat
charterer of the M/V Papillon (ex VOC Gallant) notified the Company
of its intention to pay a reduced charterhire rate of $18,000 per
day for the month of August, rather than $24,000 per day on a
bareboat basis as is set forth in the charterparty. As a result,
the Company believes that such charterer is in breach of the
charterparty agreement, and commenced arbitration proceedings
against such charterer to recover amounts owed. Liquidity and
Capital Resources As of June 30, 2009, TOP Ships had total
indebtedness under senior secured credit facilities of $404.7
million with its lenders, the Royal Bank of Scotland ("RBS"), HSH
Nordbank ("HSH"), DVB Bank ("DVB"), Alpha Bank ("ALPHA") and
Emporiki Bank ("EMPORIKI"), maturing from 2013 through 2019. Loan
Covenants and Discussions with Banks As of the date of this
release, we have received waivers and signed amendments to our loan
agreements with all five of our lenders in relation to loan
covenant breaches that took place as of December 31, 2008. The only
outstanding amendments are in relation to: (i) the bulker financing
with DVB, which agreement has been in effect since April 2009,
although the legal documentation has been delayed and (ii) HSH
financings, for which we have not yet managed to lower the adjusted
net worth covenant below $125 million. As of June 30, 2009, we were
in breach of other covenants not previously waived, which relate to
minimum liquidity, adjusted net worth and asset values of product
tankers with certain banks. As of the date of this release, we have
received waivers and amended certain loan agreements with RBS and
DVB, and we are currently in negotiations with other lenders in
relation to remaining breaches. We expect that our lenders will not
demand payment of our loans before their maturity, provided that we
pay loan installments and accumulated or accrued interest as they
fall due under the existing credit facilities. If the Company is
not able to obtain covenant waivers or modifications for current
covenant breaches or for covenant breaches that may occur in future
reporting periods, its lenders may require the Company to post
additional collateral, enhance its equity and liquidity, increase
its interest payments or pay down its indebtedness to a level where
it is in compliance with its loan covenants, sell vessels, or they
may accelerate its indebtedness, which would impair the Company's
ability to continue to conduct its business. In order to further
enhance its liquidity, the Company may find it necessary to sell
vessels at a time when vessel prices are low, in which case it will
recognize losses and a reduction in its earnings, which could
affect its ability to raise additional capital necessary to comply
with its loan covenants and/or the additional lender requirements
described above. On July 27, 2009, we entered into an unsecured
bridge loan financing facility with an unrelated party in order to
cover working capital requirements. The loan is of a principal
amount of Euros 2.5 million (approximately $3.5 million at a
conversion rate of $1.4 to 1 Euro) and has a term of three months.
On July 31, 2009, we received waivers and amended our term loan
with RBS. On the same date, we amended our $80 million product
tanker facility with DVB in order to reduce the minimum liquidity
required from $20 million to $5 million and to take account of a
bridge loan of $12.5 million, also from DVB, used in the financing
of the delivery installment of the Hongbo. The bridge loan has a
term of one year and carries a margin of 6.0%. In connection with
this amendment and bridge loan, we issued 12,512,400 of our common
shares to Hongbo Shipping Company Limited, who pledged these shares
in favor of DVB. This pledge was granted as security and must
remain in an amount equal to 180% of the outstanding bridge loan,
which amount will be tested at the end of each fiscal quarter. On
August 5, 2009, we amended our loan with Emporiki and received
waivers until March 31, 2010 for breaches of the asset maintenance
clause and minimum leverage ratio, which is defined as Total
Liabilities divided by Total Assets adjusted to the fair market
value of vessels. These breaches occurred in December 31, 2008.
Conference Call and Webcast TOP Ships' management team will host a
conference call to review the results and discuss other corporate
news and its outlook on Tuesday, August 11, 2009, at 10:00 AM ET.
Those interested in listening to the live webcast may do so by
going to the Company's website at http://www.topships.org/, or by
going to http://www.investorcalendar.com/. The telephonic replay of
the conference call will be available by dialling 1-877 660-6853
(from the US and Canada) or +1 201 612 7415 (from outside the US
and Canada) and by entering account number 286 and conference ID
number 330236. An online archive will also be available immediately
following the call at the sites noted above. Both are available for
one week, through August 17, 2009. About TOP Ships Inc. TOP Ships
Inc., formerly known as TOP Tankers Inc., is an international
provider of worldwide seaborne crude oil and petroleum products and
drybulk transportation services. The Company operates a combined
tanker and drybulk fleet as follows: -- A fleet of eight
double-hull Handymax tankers, with a total carrying capacity of
approximately 0.4 million dwt, of which 76% are sister ships. Two
of the Company's Handymaxes are on time charter contracts with an
average term of one year with both of the time charters including
profit sharing agreements above their base rates. Six of the
Company's Handymax tankers are fixed on a bareboat charter basis
with an average term of 8.7 years. -- A fleet of five drybulk
vessels with a total carrying capacity of approximately 0.3 million
dwt, of which 47% are sister ships. All of the Company's drybulk
vessels have fixed rate employment contracts for an average period
of 26 months. Forward-Looking Statements Matters discussed in this
press release may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their
business. Forward- looking statements 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 Company desires to take
advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The
words "believe," "anticipate," "intends," "estimate," "forecast,"
"project," "plan," "potential," "will," "may," "should," "expect"
"pending" and similar expressions identify forward-looking
statements. The forward-looking statements in this press release
are based upon various assumptions, many of which are based, in
turn, upon further assumptions, including without limitation, our
management's examination of historical operating trends, data
contained in our records and other data available from third
parties. Although we believe 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, we cannot assure
you that we will achieve or accomplish these expectations, beliefs
or projections. In addition to these important factors, other
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 fluctuations in charter rates
and vessel values, failure of a seller to deliver one or more
vessels or of a buyer to accept delivery of one or more vessels,
inability to procure acquisition financing, default by one or more
charterers of our ships, changes in the demand for crude oil and
petroleum products, changes in demand for dry bulk shipping
capacity, changes in our operating expenses, including bunker
prices, drydocking and insurance costs, the market for our vessels,
availability of financing and refinancing, changes in governmental
rules and regulations or actions taken by regulatory authorities,
potential liability from pending or future litigation, general
domestic and international political conditions, potential
disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hires and other factors.
Please see our filings with the Securities and Exchange Commission
for a more complete discussion of these and other risks and
uncertainties. Contact: Michael Mason (investors) Alexandros
Tsirikos, CFO Allen & Caron Inc TOP Ships Inc. 212 691 8087 011
30 210 812 8180 TABLES FOLLOW TOP SHIPS INC. CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS (UNAUDITED) (Expressed in thousands of
U.S. Dollars - except for share and per share data) Three Months
Ended Six Months Ended June 30, June 30, --------- --------- 2008
2009 2008 2009 ---- ---- ---- ---- (Unaudited) (Unaudited)
(Unaudited) (Unaudited) REVENUES: Revenues $76,687 $28,636 $149,324
$58,429 EXPENSES: Voyage expenses 13,293 1,435 23,617 2,585 Charter
hire expense 15,854 5,019 33,842 10,806 Amortization of deferred
gain on sale and leaseback of vessels and write-off of seller's
credit (1,406) (6,942) (2,703) (7,750) Lease termination expense -
15,385 - 15,385 Other vessel operating expenses 18,585 9,506 44,427
18,159 Dry-docking costs 4,983 2,939 9,032 4,202 Depreciation
10,442 7,969 20,952 14,309 Sub-manager fees 359 140 731 283 General
and administrative expenses 7,098 4,669 14,431 9,586 Foreign
currency (gains) / losses, net 19 18 551 9 (Gain) / loss on sale of
vessels 382 - (200) - --- --- ---- --- Operating income (loss)
7,078 (11,502) 4,644 (9,145) OTHER INCOME (EXPENSES): Interest and
finance costs (10,154) (3,493) (18,137) (5,764) Gain / (loss) on
financial instruments (2,785) (941) (11,607) 264 Interest income
233 19 663 208 Other, net 39 (32) 7 (142) --- --- --- ---- Total
other expenses, net (12,667) (4,447) (29,074) (5,434) Net Loss
$(5,589) $(15,949) $(24,430) $(14,579) ======= ======== ========
======== Earnings (loss) per share, basic and diluted $(0.22)
$(0.58) $(1.07) $(0.53) ====== ====== ====== ====== Weighted
average common shares outstanding, basic and diluted 25,182,389
27,476,436 22,738,815 27,509,700 ========== ========== ==========
========== TOP SHIPS INC. CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED) (Expressed in thousands of U.S. Dollars - except for
share and per share data) December 31, June 30, 2008 2009 ---- ----
ASSETS (Unaudited)(Unaudited) ------ CASH AND CASH EQUIVALENTS
$46,242 $0 ADVANCES FOR VESSELS ACQUISITIONS / UNDER CONSTRUCTION
159,971 35,257 VESSELS, NET 414,515 647,160 RESTRICTED CASH 52,575
22,842 OTHER ASSETS 25,072 14,178 ------- ------- Total assets
$698,375 $719,437 ======== ======== LIABILITIES AND STOCKHOLDERS'
EQUITY ------------------------------------ FINANCIAL INSTRUMENTS
16,438 14,293 FAIR VALUE OF BELOW MARKET TIME CHARTER 3,911 - BANK
DEBT 342,479 404,675 DEFERRED GAIN ON SALE AND LEASEBACK OF VESSELS
15,479 49 OTHER LIABILITIES 28,017 22,707 ------- ------- Total
liabilities 406,324 441,724 COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY 292,051 277,713 Total liabilities and
stockholders' equity $698,375 $719,437 ======== ======== TOP SHIPS
INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Expressed in thousands of U.S. Dollars) Six Months Ended June 30,
------- 2008 2009 ---- ---- (Unaudited)(Unaudited) Cash Flows from
(used in) Operating Activities: Net income (loss) $(24,430)
$(14,579) Adjustments to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 25,401 15,351
Stock-based compensation expense 948 1,035 Change in fair value of
financial instruments 11,160 (2,145) Financial instrument
termination payments (3,300) - Amortization of deferred gain on
sale and leaseback of vessels and write-off of seller's credit
(2,703) (7,750) Amortization of fair value below market time
charter (10,953) (3,911) Loss on sale of other fixed assets 25 93
Gain on sale of vessels (200) - Changed in operating assets and
liabilities 507 1,531 ------ ------- Net Cash from (used in)
Operating Activities (3,545) (10,375) Cash Flows from (used in)
Investing Activities: Principal payments received under capital
lease 5,500 - Principal payments paid under capital lease (68,828)
- Advances for vessels acquisition / under construction (37,070)
(19,573) Vessel acquisitions and improvements (118,142) (102,102)
Insurance claims recoveries 1,297 151 Increase in restricted cash
(3,500) - Decrease in restricted cash - 29,733 Net proceeds from
sale of vessels 140,259 - Net proceeds from sale of other fixed
assets 49 197 Acquisition of other fixed assets (601) (399) ----
---- Net Cash used in Investing Activities (81,036) (91,993) Cash
Flows from (used in) Financing Activities: Proceeds from long-term
debt 158,078 92,660 Payments of long-term debt (125,384) (30,144)
Financial instrument upfront receipt 1,500 - Financial instrument
termination payments - (5,000) Issuance of common stock, net of
issuance costs 50,601 (62) Cancellation of fractional shares (2) -
Repurchase and cancellation of common stock - (732) Payment of
financing costs (1,417) (596) ------ ---- Net Cash from Financing
Activities 83,376 56,126 Net increase (decrease) in cash and cash
equivalents (1,205) (46,242) Cash and cash equivalents at beginning
of period 26,012 46,242 ------ ------ Cash and cash equivalents at
end of period $24,807 $0 ======= === SUPPLEMENTAL CASH FLOW
INFORMATION Interest paid $12,834 $7,646 ======= ====== NON-CASH
TRANSACTIONS Fair value below market time charter $12,647 $-
======= === Amounts owed for capital expenditures $364 $343 ====
==== DATASOURCE: TOP Ships Inc. CONTACT: investors, Michael Mason
of Allen & Caron Inc, +1-212-691-8087, , for TOP Ships Inc.; or
Alexandros Tsirikos, CFO of TOP Ships Inc., 011 30 210 812 8180,
Web Site: http://www.topships.org/
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