ATHENS, Greece, Aug. 3 /PRNewswire-FirstCall/ -- TOP Tankers Inc (Nasdaq: TOPT) today announced its operating results for the second quarter and first half of 2006.
For the three months ended June 30, 2006, the Company reported net loss of $4,911,000, or $0.17 per share, compared with net income of $13,552,000, or $0.49 per share, for the second quarter of 2005. The weighted average numbers of basic shares used in the computations were 29,586,783 and 27,830,990 for the second quarters of 2006 and 2005, respectively. The results for the second quarter of 2006 include net charges of $359,000, or $0.01 per share of special items(1) that affected the Company's net loss for the second quarter of 2006 that are typically excluded by securities analysts in their published estimates of the Company's financial results, which are described in Appendix A of this release. For the three months ended June 30, 2006, operating income was $89,000, compared with $19,200,000 for the second quarter of 2005. EBITDA(1) for the second quarter of 2006 was $10,188,000, compared with $33,128,000 for the second quarter of 2005. Voyage revenues for the second quarter of 2006 were $69,857,000, compared to $56,329,000 recorded in the second quarter of 2005.
For the six months ended June 30, 2006, the Company reported net income of $25,493,000, or $0.86 per share, compared with net income of $32,673,000, or $1.17 per share, for the first half of 2005. The weighted average numbers of basic shares used in the computations were 28,847,107 and 27,830,990 for the first half of 2006 and 2005, respectively. The results for the first half of 2006 include net charges of $3,605,000, or $0.13 per share of special items that affected the Company's net income for the first half of 2006 that are typically excluded by securities analysts in their published estimates of the Company's financial results, which are described in Appendix A of this release. For the six months ended June 30, 2006, operating income was $38,302,000, compared with $40,175,000 for the first half of 2005. EBITDA for the first half of 2006 was $66,038,000, compared with $62,847,000 for the same period last year. Voyage revenues for the six month period ended June 30, 2006 were $171,603,000, compared to $103,620,000 recorded in the first half of 2005.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Tankers Inc, commented, "As we discussed on the first quarter 2006 conference call, we brought forward our dry-docking schedule into the summer months, in order to take advantage of the anticipated slower charter market. However, the freight market so far has been exceptionally strong and our drydocks have lasted longer than expected, due mostly to significant delays in the Far Eastern shipyards. While there remains a degree of uncertainty regarding the exact date of completion for specific vessels, we expect to be able to enjoy the benefit of our full fleet's availability throughout the winter period, which is traditionally the strongest period of the year."
Pistiolis continued, "During the second quarter, we sold 3,053,900 shares of common stock, in 'at-the-market' offerings at an average price of $7.30 per share. Such sales, together with continuing positive cash flows from operations, further increased our cash position to more than $90 million. In addition, our Board of Directors has approved our sale of up to an additional 5,000,000 shares under this program, out of which 453,900 shares were sold during the second quarter. Sales under this program may or may not take place depending on our assessment of the market and other circumstances."
The Company also stated that it has cooperated fully with the U.S. Securities and Exchange Commission related to its previously announced informal inquiry.
The following key indicators serve to highlight changes in the financial performance of the Company's fleet during the second quarters and six-month period ended June 30, 2005 and 2006:
(In U.S. Dollars Suezmax Fleet
unless otherwise Three Months Ended June 30, Six Months Ended June 30,
stated) 2005 2006 Change 2005 2006 Change
Total available ship
days 791 1,183 49.6% 1,207 2,353 94.9%
Total operating
days 687 892 29.8% 1,099 2,004 82.3%
Utilization 86.9% 75.4% -13.2% 91.1% 85.2% -6.5%
TCE(2) per ship per
day under spot
voyage charter 40,209 40,314 0.3% 44,716 52,089 16.5%
TCE per ship per
day under time
charter 32,195 31,727 -1.5% 32,195 35,902 11.5%
Average TCE 37,223 37,031 -0.5% 41,800 45,749 9.4%
Vessel operating
expenses per ship
per day 7,818 7,438 -4.9% 7,395 7,535 1.9%
(In U.S. Dollars Handymax Fleet
unless otherwise Three Months Ended June 30, Six Months Ended June 30,
stated) 2005 2006 Change 2005 2006 Change
Total available
ship days 1,230 1,274 3.6% 2,147 2,534 18.0%
Total operating
days 1,138 1,231 8.2% 2,048 2,467 20.5%
Utilization 92.5% 96.6% 4.4% 95.4% 97.4% 2.1%
TCE per ship per
day under spot
voyage charter 11,500 -- -- 11,500 -- --
TCE per ship per
day under time
charter 19,859 18,683 -5.9% 20,633 20,212 -2.0%
Average TCE 19,536 18,683 -4.4% 20,437 20,212 -1.1%
Vessel operating
expenses per ship
per day 5,149 5,824 13.1% 5,055 5,611 11.0%
(In U.S. Dollars Total Fleet*
unless otherwise Three Months Ended June 30, Six Months Ended June 30,
stated) 2005 2006 Change 2005 2006 Change
Total available
ship days 2,112 2,457 16.3% 3,535 4,887 38.2%
Total operating
days 1,916 2,123 10.8% 3,317 4,471 34.8%
Utilization 90.7% 86.4% -4.8% 93.8% 91.5% -2.5%
TCE per ship
per day under
spot voyage
charter 37,539 40,314 7.4% 40,451 52,089 28.8%
TCE per ship
per day under
time charter 21,176 21,513 1.6% 21,314 23,999 12.6%
Average TCE 25,232 26,392 4.6% 26,875 31,658 17.8%
Vessel operating
expenses per
ship per day 5,822 6,601 13.4% 5,766 6,538 13.4%
General and
administrative
expenses per
ship per day** 1,433 1,941 35.5% 1,699 2,466 45.2%
* Total Fleet information includes data for one Handysize tanker in
2005.
** The daily General and Administrative expenses include approximately $0
and $146 for the three-month period and $127 and $871 for the 6-month
period ended June 30, 2005 and 2006 respectively, of non-cash
restricted stock expense and general compensation provision.
(2) Consistent with general practice in the tanker shipping industry, time
charter equivalent, or TCE, is a measure of the average daily revenue
performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is
determined by dividing net voyage revenue by voyage days for the
relevant time period. Net voyage revenues are voyage revenues minus
voyage expenses. 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.
Fleet Report
As of June 30, 2006, the Company's fleet under management totaled 27 vessels, or 2.6 million dwt (including 18 vessels sold and leased back for a period of 5 to 7 years) as compared to 23 vessels, or 2.0 million dwt on June 30, 2005. The changes in the Company's fleet during the second quarter of 2006 are as follows:
On April 4, 2006, the Company sold and leased-back the Suezmax tankers M/T Limitless, M/T Endless, M/T Stainless, M/T Faultless and M/T Noiseless for a period of seven years, generating a gain of $36 million, which is amortized over the seven year lease period.
Fleet Deployment
During the first quarter of 2006, the Company had approximately 71% of the fleet's operating days on long-term employment contracts. Nineteen of the Company's 27 tankers are on time charter contracts with an average term of over three years with all but two of the time charters including profit sharing agreements.
The Company has secured approximately 70% of the estimated operating days for 2006 under time charter contracts. At the same time, the eight Suezmaxes operating in the spot market, together with the profit sharing component of the time charter contracts, expose approximately 65% of the Company's estimated operating days for 2006 to spot rates, which may be potentially higher.
Suezmax Fleet:
During the second quarter of 2006, seven of the Company's Suezmax tankers operated in the spot market, earning on average $40,314 per vessel per day on a time charter equivalent (TCE) basis.
As of the date of this release, the Company's Suezmax fleet for the third quarter of 2006 has been fixed for employment as follows:
Spot: 58% of operating days at average daily TCE of $41,700
Total (Spot and time charter, including profit sharing): 58% of operating days at average daily TCE of $40,000.
Handymax Fleet:
All of the Company's Handymax tankers operate under long term employment agreements with Glencore and Vitol that provide for a base rate of charter hire and additional profit-sharing.
During the second quarter of 2006, including the profit-sharing allocated to the Company from these profit-sharing agreements, the Handymax fleet earned on average $18,683 per vessel per day on a TCE basis.
As of the date of this release, the Company's Handymax fleet for the third quarter of 2006 has been fixed for 40% of its operating days at average daily TCE of $16,500.
The following table presents the Company's current fleet list and
employment:
Profit Sharing
Year Charter Daily Base Above Base
Dwt Built Type Expiry Rate Rate (2006)
13 Suezmax
Tankers
Timeless(C) 154,970 1991 Time Q2/2007 $28,000 100% first $7,000
Charter + 50% thereafter
Flawless(C) 154,970 1991 Time Q2/2007 $28,000 100% first $7,000
Charter + 50% thereafter
Stopless(C) 154,970 1991 Time Q2/2007 $28,000 100% first $7,000
Charter + 50% thereafter
Priceless(C) 154,970 1991 Spot
Faultless(B) 154,970 1992 Spot
Noiseless(B) 149,554 1992 Time Q2/2010 $37,000(1) None
Stainless(B) 149,599 1992 Spot
Endless(B) 135,915 1992 Time Q4/2008(A) $36,500 None
Limitless(B) 136,055 1993 Spot
Stormless 150,038 1993 Spot
Ellen P. 146,286 1996 Spot
Errorless 147,048 1993 Spot
Edgeless 147,048 1994 Spot
14 Handymax
Tankers
Victorious(B) 47,084 1991 Time Q3/2009 $14,500(2) 100% first $500
Charter + 50% thereafter
Sovereign(B) 47,084 1992 Time Q3/2009 $14,500(2) 100% first $500
Charter + 50% thereafter
Invincible(B) 47,084 1992 Time Q3/2009 $14,500(2) 100% first $500
Charter + 50% thereafter
Relentless(B) 47,084 1992 Time Q3/2009 $14,500(2) 100% first $500
Charter + 50% thereafter
Vanguard(C) 47,084 1992 Time Q1/2010 $13,250(3) 100% first $1,250
Charter + 50% thereafter
Restless(B) 47,084 1991 Time Q1/2010 $13,250(3) 100% first $1,250
Charter + 50% thereafter
Spotless(C) 47,094 1991 Time Q1/2010 $13,250(3) 100% first $1,250
Charter + 50% thereafter
Doubtless(C) 47,076 1991 Time Q1/2010 $13,250(3) 100% first $1,250
Charter + 50% thereafter
Faithful(C) 45,720 1992 Time Q1/2010 $13,250(3) 100% first $1,250
Charter + 50% thereafter
Topless 47,262 1998 Time Q2/2010 $16,250 100% first 1,000
Charter + 50% thereafter
Taintless 46,217 1999 Time Q1/2010 $16,250 100% first 1,000
Charter + 50% thereafter
Dauntless 46,168 1999 Time Q1/2010 $16,250 100% first 1,000
Charter + 50% thereafter
Soundless 46,185 1999 Time Q2/2010 $16,250 100% first 1,000
Charter + 50% thereafter
Ioannis P. 46,346 2003 Time Q4/2010 $18,000(4) 35% above base
Charter rate
Total Tanker
DWT 2,590,965
(A.) Charterers have option to extend contract for an additional four-year
period
(B.) Vessels sold and leased back for a period of 7 years.
(C.) Vessels sold and leased back for a period of 5 years.
(1.) Base rate will change to $36,000 in Q2 2007 and $35,000 in Q2 2008
until expiration.
(2.) Base rate will change to $14,000 from Q3 2006 until expiration.
(3.) Base rate will change to $14,500, plus 50% profit sharing
participation thereafter, from Q1 2007 until expiration.
(4.) From Q3 2006 until expiration, base rate will remain the same with
100% profit sharing participation in the first $1,000 above base rate
and 50% thereafter.
Credit Facility
As of June 30, 2006, TOP Tankers had total indebtedness under senior secured credit facilities of $303 million with its lenders, the Royal Bank of Scotland ("RBS") and HSH Nordbank ("HSH"), maturing in 2015 and 2013, respectively.
As of June 30, 2006, the Company has two interest rate swap agreements with RBS and HSH for the amounts of $36.5 million and $45.0 million for a period of four and five years, respectively. Under these agreements the interest rate is fixed at an effective annual rate of 4.66% and 4.80%, respectively, in addition to the applicable margin. The interest rate for the unhedged balance of the loans is LIBOR, plus the margin. On June 30, 2006, the Company's ratio of indebtedness to total capital was approximately 59.9%.
Dividend and Dividend Policy
The Company paid a special dividend of $2.50 per share on April 25, 2006 to shareholders of record as of April 17, 2006, following the completion of sale and leaseback of five vessels in April 2006.
In addition, on April 6, 2006, the Company announced that its Board of Directors had decided to change the Company's dividend policy from quarterly and special dividend payments to special dividend payments. Declaration and payment of such dividends will be subject to the discretion of the Company's Board of Directors. The timing and amount of future dividend payments will be dependent upon the Company's earnings, financial condition, cash requirements and availability.
Conference Call and Webcast
TOP Tankers' management team will host a conference call to review the results and discuss other corporate news and its outlook on Thursday, August 3, 2006, at 11:00 AM EDT, which will be broadcast live over the Internet. Those interested in listening to the live webcast may do so by going to the Company's website at www.toptankers.com, or by going to www.investorcalendar.com.
The telephonic replay of the conference call will be available by dialing 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 209180. An online archive will also be available immediately following the call at the sites noted above. Both are available for one week, through August 10, 2006.
About TOP Tankers Inc
TOP Tankers Inc is an international provider of worldwide seaborne crude oil and petroleum products transportation services. The Company operates a fleet of 27 tankers, consisting of 13 double-hull Suezmax tankers and 14 double-hull Handymax tankers, with a total carrying capacity of approximately 2.6 million dwt, of which 88.8% are sister ships. Nineteen of the Company's 27 tankers are on time charter contracts with an average term of over three years with all but two of the time charters including profit sharing agreements.
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 TOP Tankers 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, TOP Tankers cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charterhire rates and vessel values, failure of a seller to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, inability to procure acquisition financing, changes in demand for oil and petroleum products, the effect of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydocking, changes in our voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations including requirements for double-hull tankers 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 TOP Tankers with the US Securities and Exchange Commission.
(1) See Appendix A to this release for information about special items and reconciliation of EBITDA.
Contact: Michael Mason (investors) Stamatis Tsantanis, CFO
Allen & Caron Inc TOP Tankers Inc
212 691 8087 011 30 210 697 8199
michaelm@allencaron.com snt@toptankers.com
TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF INCOME
(Expressed in thousands of U.S. Dollars -- except for share and per share
data)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2006 2005 2006
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES:
Voyage revenues $56,329 $69,857 $103,620 $171,603
EXPENSES:
Voyage expenses 7,984 13,826 14,474 30,060
Charter hire expense -- 28,969 -- 36,607
Vessel operating
expenses 12,297 16,218 20,382 31,949
Depreciation and
amortization 13,904 9,944 22,640 27,585
General and
administrative expenses 3,027 4,770 6,006 12,052
Amortization of deferred
gain on sale of vessels -- (4,161) -- (5,216)
Foreign currency
(gains) / losses, net (83) 202 (57) 264
Operating income 19,200 89 40,175 38,302
OTHER INCOME (EXPENSES):
Interest and finance
costs (5,894) (6,222) (8,404) (14,288)
Interest income 222 1,067 870 1,328
Other, net 24 155 32 151
Total other expenses,
net (5,648) (5,000) (7,502) (12,809)
Net Income (loss) $13,552 $(4,911) $32,673 $25,493
Earnings / (loss) per
share, basic and diluted $0.49 $(0.17) $1.17 $0.86
Weighted average common
shares outstanding,
basic and diluted 27,830,990 29,586,783 27,830,990 28,847,107
TOP TANKERS INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars -- except for share and per share
data)
December 31, June 30,
2005 2006
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $17,462 $84,793
Other current assets 50,112 36,912
Total current assets 67,574 121,705
FINANCIAL INSTRUMENTS 425 1,719
VESSELS, NET 886,754 431,344
OTHER NON-CURRENT ASSETS 26,144 70,977
Total assets $980,897 $625,745
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $45,329 $16,662
Deferred income, current portion 2,451 16,864
Other current liabilities 30,814 29,393
Total current liabilities 78,594 62,919
LONG-TERM DEBT, net of current portion 518,774 284,505
DEFERRED INCOME, net of current portion 13,871 76,518
STOCKHOLDERS' EQUITY 369,658 201,803
Total liabilities and Stockholders' equity $980,897 $625,745
TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
Six Months Ended June 30,
2005 2006
(unaudited) (unaudited)
Cash Flows from (used in) Operating Activities:
Net income $32,673 $25,493
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 23,139 30,550
Stock-based compensation -- 1,755
Change in fair value of financial
instruments -- (709)
Long-term receivables discount adjustment -- (198)
Amortization of deferred income -- (5,216)
Change in operating assets and liabilities 5,553 11,779
Payments for dry-docking (3,238) (8,691)
Net Cash from Operating Activities 58,127 54,763
Cash Flows from (used in) Investing Activities:
Acquisition of vessels (387,231) --
Net proceeds from sale of vessels -- 474,616
Other (169) (279)
Net Cash from (used in) Investing Activities (387,400) 474,337
Cash Flows from (used in) Financing Activities:
Proceeds from long-term debt 284,294 --
Payments of long-term debt (10,000) (266,018)
(Increase) decrease in restricted cash (2,000) --
Issuance of common stock -- 21,778
Payment of financing costs (2,866) (63)
Dividends paid (11,690) (217,466)
Net Cash from (used in) Financing Activities 257,738 (461,769)
Net increase (decrease) in cash and cash
equivalents (71,535) 67,331
Cash and cash equivalents at beginning
of period 114,768 17,462
Cash and cash equivalents at end of period $43,233 $84,793
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $4,853 $12,304
APPENDIX A -- SPECIFIC ITEMS AFFECTING NET INCOME AND RECONCILIATION OF EBITDA
Set forth below are some of the significant items of income and expense that affected the Company's net income for the second quarter and first half of 2006, all of which items are typically excluded by securities analysts in their published estimates of the Company's financial results:
(Expressed in thousands of U.S. Dollars -- except for share and per share
data)
Description Three months ended Six months ended
June 30, 2006 June 30, 2006
(Unaudited) (Unaudited)
$ Per Share $ Per Share
Restricted share plan to
officers and personnel 359 0.01 1,755 0.06
Bonus compensation
provision to officers
and personnel -- -- 2,500 0.09
Gain from termination of
interest rate swap -- -- (650) (0.02)
Total 359 0.01 3,605 0.13
Specific items had no material effect in Company's net income for the
second quarter and first half of 2005.
EBITDA RECONCILIATION(3)
(Expressed in Thousands Three Months Ended Six Months Ended
of U.S. Dollars) June 30, June 30,
2005 2006 2005 2006
NET INCOME (LOSS) 13,552 (4,911) 32,673 25,493
DEPRECIATION AND
AMORTIZATION 13,904 9,944 22,640 27,585
INTEREST AND FINANCE COSTS,
NET 5,672 5,155 7,534 12,960
EBITDA 33,128 10,188 62,847 66,038
(3) EBITDA represents earnings before interest and finance costs, net,
taxes, depreciation and amortization. Interest and finance costs, net
include gain or loss from termination of swaps and swap fair value
changes. EBITDA is included in this release because we believe it
provides investors with an understanding of operating performance over
comparative periods. EBITDA should not be considered as a substitute
for income from operations, net income or cash flows from operating
activities (all as determined in accordance with generally accepted
accounting principles) for the purpose of analyzing our operating
performance, financial position and cash flows, as EBITDA is not
defined by generally accepted accounting principles. We presented
EBITDA, however, because it is commonly used by certain investors and
analysts to analyze and compare companies on the basis of operating
performance and to determine a company's ability to service and/or
incur debt.
SOURCE TOP Tankers Inc
-0- 08/03/2006
/CONTACT: Investors, Michael Mason of Allen & Caron Inc, +1-212-691-8087,
michaelm@allencaron.com, for TOP Tankers Inc; or Stamatis Tsantanis, CFO of
TOP Tankers Inc, 011 30 210 697 8199, snt@toptankers.com/
/Web site: http://www.investorcalendar.com /
/Web site: http://www.toptankers.com /
(TOPT)
CO: TOP Tankers Inc
ST: New York, Greece
IN: OIL MAR
SU: ERN CCA DIV
BK-IL
-- LATH032 --
5307 08/03/2006 07:35 EDT http://www.prnewswire.com