Excel Maritime Reports First Quarter Ended March 31, 2009
Excel Maritime Carriers Ltd, an owner and operator of dry bulk carriers and a leading international provider of worldwide seaborne transportation services for dry bulk cargoes, announced yesterday its operating and financial results for the first quarter ended March 31, 2009.
During the first quarter of 2009, we amended our two credit facilities with Nordea Bank and Credit Suisse Bank and secured all the appropriate covenant waivers for these credit facilities until January 1, 2011. As part of the loan amendments entities affiliated with the family of our Chairman of the Board of Directors have injected $45.0 million in the Company. Earlier in the quarter, our Board of Directors had decided to suspend our dividend in light of the challenging conditions both in the freight market and the financial environment.
Dissolution of Oceanaut, Inc.
We held 18.9% of the outstanding common stock of Oceanaut, Inc., or Oceanaut, a blank check corporation that was organized in May 2006 under the laws of the Republic of the Marshall Islands and was formed to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, vessels or one or more operating businesses in the shipping industry.
At a special meeting held on April 6, 2009, Oceanaut's shareholders voted to approve the dissolution and liquidation of Oceanaut. As set forth in Oceanaut's Amended and Restated Articles of Incorporation, Oceanaut's officers took action to dissolve Oceanaut and distribute the funds in Oceanaut's trust account, at a rate of approximately $8.26 per share of common stock, to those shareholders holding shares of Oceanaut's common stock sold in its initial public offering and to us with respect to the shares of Oceanaut common stock included in 625,000 of the 1,125,000 of the Oceanaut insider units that we owned. In this respect, on April 15, 2009, we received approximately $5.2 million.
Fleet Developments: Sale of vessel
Based on a Memorandum of Agreement dated February 20, 2009, the M/V Swift, a Handymax vessel of 37,687 dwt built in 1984 was sold for net proceeds of approximately $3.8 million.
As of December 31, 2008, the vessel's value was impaired and written down to her fair value, which approximated her sale proceeds and thus, the results for the quarter ended March 31, 2009 were not affected. The vessel was delivered to her new owners on March 16, 2009. Following the sale of the vessel, the Company repaid an amount of $4.6 million of its Nordea Loan.
Vessels new fixtures
On April 16, 2009 the M/V Sandra, a Capesize vessel of 180,000 dwt built in 2008, terminated her existing time charter by receiving an amount of approximately $2.0 million as compensation for the early termination and entered into a new one at a daily rate of $32,000 expiring in September 2010. A second charter on the vessel has been fixed commencing upon completion of her current charter and through February 2016 at a daily base rate of $25,000 with 50% profit sharing based on the monthly AV4 BCI charter rate as published by the Baltic Exchange.
On May 14, 2009 the M/V Birthday, a Panamax vessel of 71,504 dwt built in 1993, was fixed for a period of 12-14 months at a daily rate of $16,500. The vessel will be delivered to the charterer upon completion of her existing time charter in June 2009.
Time Charter Coverage
As of today, we have secured under time charter employment 67% of our operating days for 2009 (Q2-Q4) and 55% for 2010.
Lefteris Papatrifon, Chief Financial Officer of Excel, stated, "We are pleased with our operating performance and our ability to keep generating strong cash flows despite the volatile market conditions that the shipping industry has experienced during the first quarter of 2009. We believe that our versatile fleet and significant time charter coverage with quality counterparties together with the recent restructuring of our credit facilities allow us to efficiently manage the current market environment and take advantage of any opportunities that might emerge in the future."
First Quarter 2009 Results:
The Company reported net income for the quarter of $118.0 million or $2.57 per weighted average number of share as compared to net income of $35.1 million or $1.76 per weighted average number of share for the first quarter of 2008.
The results for the first quarter of 2009 include a non-cash item of $6.7 million relating to the unrealized gain from the valuation of interest rate swaps and $0.1 million gain on sale of a vessel. Net income, excluding the above items, for the quarter would amount to $111.2 million or $2.42 per weighted average diluted share.
Included in the above adjusted net income are also the amortization of favorable and unfavorable time charters that were fair valued upon acquiring Quintana on April 15, 2008 amounting to a net income of $67.8 million ($1.48 per weighted average diluted share), a non-cash gain of $51.5 million ($1.12 per weighted average diluted share) related to the accelerated amortization of the time charter value of M/V Sandra and M/V Coal Pride assumed upon Quintana Maritime Limited ("Quintana") acquisition due to their termination and the amortization of stock based compensation expense of $2.4 million ($0.05 per weighted average diluted share).
In addition, effective January 1, 2009, the Company changed the method of accounting for dry-docking and special survey costs from the deferral method to the expense as incurred method. (Please refer to a subsequent section of this Press Release for a further discussion on this accounting change). Such change was effected retrospectively to all periods presented and its effect in the first quarter of 2009 was a decrease in net income of approximately $2.0 million or $0.04 per weighted average diluted share.
Revenues for the first quarter of 2009 amounted to $222.1 million as compared to $69.8 million for the same period in 2008, an increase of approximately 218.2%. Included in revenues for the first quarter of 2009 are $129.1 million of non-cash revenues relating to the amortization of unfavorable time charters that were fair valued upon acquiring Quintana. There were no such non-cash revenue items recorded in the corresponding period in 2008.
An average of 47.8 vessels operated during the first quarter of 2009 earning a blended average time charter equivalent rate of $21,024 per day, compared to an average of 18 vessels operated during the first quarter of 2008 earning a blended average time charter equivalent rate of $41,767 per day. Please refer to a subsequent section of this Press Release for a calculation of the TCE.
Adjusted EBITDA for the first quarter of 2009 was $53.3 million compared to $52.0 million for the first quarter of 2008, an increase of approximately 2.5%. Please refer to a subsequent section of this Press Release for a reconciliation of adjusted EBITDA to Net Income.