OceanFreight Inc. (NASDAQ: OCNF), a global provider of marine
transportation services, today announced its financial results for
the quarter ended June 30, 2011.
Financial Highlights
For the three-month period ended June 30, 2011 the Company
reported a Net Loss of $1 million or $0.16 basic and diluted loss
per share. Included in these results is a loss of $2.0 million
associated with the sale of M/T Olinda.
Excluding this item, Net Income for the second quarter of 2011
would amount to $1 million or $0.16 cents basic and diluted
earnings per share.
Recent Developments
On July 20, 2011, we received notice from the Nasdaq Stock
market that the Company has regained compliance with the minimum
bid price of $1.00 per share and the noncompliance matter is now
closed.
On July 26, 2011, we entered into a definitive agreement for
DryShips Inc. to acquire the outstanding shares of the Company for
a consideration per share of $19.85, consisting of $11.25 in cash
and 0.52326 of a share of common stock of Ocean Rig UDW Inc. or
$8.6 based on the last traded price as of July 25, 2011 of $16.44.
Ocean Rig UDW Inc. is a global provider of offshore ultra deepwater
drilling services that is 78% owned by DryShips. Under the terms of
the transaction, the Ocean Rig shares are to be listed on the
Nasdaq Global Select Market upon the closing of the merger.
Prof. John Liveris, the Chairman of the
Company's Board of Directors, commented:
"The highlight of the most recent developments is OceanFreight's
merger with DryShips. This merger enables our shareholders to
realize the value created from the significant repositioning of the
company's fleet and employment profile. This value unfortunately
was not reflected in our stock price. Additionally, we are pleased
to provide our shareholders with the opportunity to participate in
Ocean Rig, a growing company in the ultra deep water drilling
sector. We believe that OceanFreight's four-year journey in the
public markets has reached a worthy homeport."
Second Quarter 2011 Results
For the quarter ended June 30, 2011, Voyage Revenues amounted to
$15.0 million and Operating Income amounted to $0.7 million. Net
Loss amounted to $1 million. Net cash provided by operating
activities was $13.6 million and Adjusted EBITDA(*) for the second
quarter of 2011 was $7.7 million.
An average of 6.6 vessels were owned and operated during the
second quarter of 2011, earning an average Time Charter Equivalent,
or TCE rate, of $24,352 per day.
(*) Please see later in this release for a reconciliation of
adjusted EBITDA to net cash provided by operating activities.
Fleet Data
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Three Months Ended June 30,
----------------------------------------------------------------------------
2010 2011
----------------------------------------------------------------------------
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Average number of vessels (1) 11.6 6.6
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Total voyage days for fleet (2) 952 574
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Total calendar days for fleet (3) 1,050 600
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Time charter equivalent (TCE) daily rate (4) $ 23,812 $ 24,352
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Fleet utilization (5) 90.7% 95.7%
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(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) Time charter equivalent rate, 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.
(5) 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.
The following table reflects the calculation of our TCE daily
rates for the periods then ended:
----------------------------------------------------------------------------
(Dollars in thousands, except Average Daily
results - unaudited) Three Months Ended June 30,
----------------------------------------------------------------------------
2010 2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Voyage revenue and imputed deferred revenue 24,043 14,918
----------------------------------------------------------------------------
Voyage expenses (1,374) (940)
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Revenue on a time charter basis 22,669 13,978
----------------------------------------------------------------------------
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Total voyage days for fleet 952 574
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Time charter equivalent (TCE) daily rate $ 23,812 $ 24,352
----------------------------------------------------------------------------
Financial Statements
The following are OceanFreight Inc.'s Consolidated Statements of
Operations for the three -month periods ended June 30, 2010 and
2011:
Three Months Ended June
30,
-----------------------
(Dollars in thousands, except for share and per
share data)
2010 2011
----------- -----------
STATEMENT OF OPERATIONS DATA (unaudited) (unaudited)
----------------------------------------------------
Voyage revenues $ 24,014 $ 14,918
Gain on forward freight agreements 261 -
Imputed revenue 29 -
----------- -----------
Gross revenue 24,304 14,918
Voyage expenses (1,374) (940)
Vessels operating expenses (10,983) (5,072)
Depreciation (6,833) (4,149)
General and administrative expenses (1,490) (1,920)
Survey and drydocking costs (1,336) -
Gain/(loss) on sale of vessels and vessels held for
sale 1,491 (2,049)
----------- -----------
Operating income 3,779 788
----------- -----------
Interest income 41 149
Interest expense and finance costs (1,143) (624)
Loss on derivative instruments (3,490) (1,289)
----------- -----------
Net loss $ (813)$ (976)
=========== ===========
Loss per common share, basic and diluted $ (0.24)$ (0.16)
Weighted average number of common shares, basic and
diluted (1) 3,341,355 5,926,598
(1) The weighted average number of common shares gives effect to the 1:20
reverse stock split which took place on July 6, 2011
The following are OceanFreight Inc.'s Consolidated Balance
Sheets as of December 31, 2010 and June 30, 2011:
(Dollars in thousands, except per share data)
2010 2011
---------- ------------
ASSETS (audited) (unaudited)
----------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 9,549 $ 19,275
Vessels held for sale 88,274 -
Other current assets 11,931 4,962
---------- ------------
Total current assets 109,754 24,237
---------- ------------
FIXED ASSETS, NET:
Vessels under construction 46,618 87,438
Vessels, net of accumulated depreciation 311,144 303,010
Other, net of accumulated depreciation 597 478
---------- ------------
Total fixed assets, net 358,359 390,926
---------- ------------
OTHER NON-CURRENT ASSETS
Restricted cash 5,511 3,011
Other non -current assets 5,239 5,443
---------- ------------
Total assets 478,863 423,617
========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt 82,331 26,524
Other current liabilities 28,980 17,015
---------- ------------
Total current liabilities 111,311 43,539
---------- ------------
NON -CURRENT LIABILITIES:
Derivative liability, net of current portion 4,875 3,361
Long-term debt, net of current portion 127,441 116,319
---------- ------------
Total non-current liabilities 132,316 119,680
---------- ------------
STOCKHOLDERS' EQUITY: 235,236 260,398
---------- ------------
Total liabilities and stockholders' equity 478,863 423,617
========== ============
Adjusted EBITDA Reconciliation
OceanFreight Inc. considers EBITDA to represent net income
before interest, taxes, depreciation and amortization. Adjusted
EBITDA excludes loss on sale of vessels and impairment on vessels.
EBITDA and Adjusted EBITDA do not represent and should not be
considered as an alternative to net income or cash flow from
operations, as determined by U.S. GAAP and our calculation of
EBITDA may not be comparable to that reported by other companies.
Adjusted EBITDA is included in this earnings release because it is
a basis upon which we assess our liquidity position, because it is
used by our lenders as a measure of our compliance with certain
loan covenants and because we believe that it presents useful
information to investors regarding our ability to service and/or
incur indebtedness.
The following table reconciles Net cash provided by operating
activities to EBITDA as adjusted for the effect of the loss from
the sale of vessels and impairment loss:
Three Months Ended
June 30,
(amounts in thousands of U.S. dollars) 2010 2011
---------- ----------
Net cash provided by/(used in) operating activities 4,477 13,629
Net increase/(decrease) in operating assets 6,709 (6,796)
Net (increase)/decrease in operating liabilities (7,575) (1,315)
Net interest expense 3,197 2,267
Amortization of deferred financing costs included in
interest expense (*) (140) (74)
---------- ----------
Adjusted EBITDA 6,668 7,711
========== ==========
(*) Net interest expense includes the realized loss of interest
rate swaps included in "Loss on interest rate swaps" in the interim
consolidated unaudited statements of operations.
Fleet List
The table below describes our fleet and current employment
profile as of August 22, 2011:
Gross
Rate
Year Current per Earliest Latest
Vessel Name Built DWT Type Employment Day Redelivery Redelivery
------------- ----- ------- -------- ---------- ------ ---------- ----------
Drybulk
Vessels
-------------
M/V Robusto 2006 173,949 Capesize TC 26,000 Aug-14 Mar-18
M/V Cohiba 2006 174,200 Capesize TC 26,250 Oct-14 May-18
M/V
Montecristo 2005 180,263 Capesize TC 23,500 May-14 Jan-18
M/V Partagas 2004 173,880 Capesize TC 27,500 Jul-12 Dec-12
M/V Topeka 2000 74,710 Panamax TC 15,000 Jan-12 Apr-13
M/V Helena 1999 73,744 Panamax TC 32,000 May-12 Oct-16
Vessels to be
Acquired
-------------
Newbuilding
VLOC #1 (1) 2012 206,000 Capesize TC 25,000 Apr-15 Apr-20
Newbuilding
VLOC #2 (2) 2012 206,000 Capesize TC 23,000 Aug-17 Aug-22
Newbuilding
VLOC #3 (3) 2012 206,000 Capesize TC 21,500 Oct-19 Oct-26
Newbuilding
VLOC #4 2012 206,000 Capesize Spot
Newbuilding
VLOC #5 2013 206,000 Capesize Spot
(1) Upon delivery of the vessel, which is expected in the second quarter of
2012, it is scheduled to commence time charter employment for a minimum
period of three years at a gross daily rate of $25,000.
(2) Upon delivery of the vessel, which is expected in the third quarter of
2012, it is scheduled to commence time charter employment for a minimum
period of five years at a gross daily rate of $23,000. In addition, the
time charter contract provides for a 50% profit sharing arrangement when
the daily Capesize average time charter rate is between $23,000 and
$40,000 per day.
(3) Upon delivery of the vessel, which is expected in the fourth quarter of
2012, it is scheduled to commence time charter employment for a minimum
period of seven years at a gross daily rate of $21,500. In addition, the
time charter contract provides for a 50% profit sharing arrangement when
the daily Capesize average time charter rate is between $21,500 and
$38,000 per day.
About OceanFreight Inc.
OceanFreight Inc. is an owner and operator of drybulk vessels
that operate worldwide. OceanFreight owns a fleet of eleven
vessels, comprised of six drybulk vessels (four Capesize and two
Panamaxes) and five newbuilding Very Large Ore Carriers (VLOC) with
a combined deadweight tonnage of about 1.9 million tons.
OceanFreight Inc.'s common stock is listed on the NASDAQ Global
Market where it trades under the symbol "OCNF". Visit our website
at www.oceanfreightinc.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 charter hire 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 U.S. Securities and Exchange
Commission.
Investor Relations/Media: Nicolas Bornozis Capital Link,
Inc. (New York) Tel: +1-212-661-7566 E-mail:
oceanfreight@capitallink.com
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