CURRENT FLEET DATA
Three Months Nine Months
Ended - Ended -
September 30, September 30,
-------------- --------------
2008 2009 2008 2009
------ ------ ------ ------
Total number of vessels at the end of the
period 7 13 7 13
------ ------ ------ ------
Total calendar days for fleet (1) 644 1,163 1,762 2,930
------ ------ ------ ------
Total available days for fleet (2) 638 1,161 1,708 2,864
------ ------ ------ ------
Total operating days for fleet (3) 627 1,160 1,692 2,834
------ ------ ------ ------
Fleet utilization (4) 98.28% 99.91% 99.06% 98.95%
------ ------ ------ ------
(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 the relevant period and affect both the amount of
revenues and expenses that we record during that 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 guarantee inspections in the case of newbuildings,
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. We determined to use
available days as a performance metric for the first time, in the second
quarter and first half of 2009. We have decided to adjust the calculation
method of utilization to include available days in order to be comparable
with shipping companies that calculate utilization using operating days
divided by available days.
(3) We define operating days as the number of 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 operating days
during a period by the number of available days during that 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 scheduled guarantee inspections in the case of newbuildings, vessel
upgrades, special or intermediate surveys and vessel positioning. We used a
new calculation method for fleet utilization for the first time, in the
second quarter and first half of 2009. In all prior filings and reports,
utilization was calculated by dividing operating days by calendar days. We
have decided to change the calculation method in order to be comparable
with most shipping companies, which calculate utilization using operating
days divided by available days.
The following table presents the Company's current fleet and employment
profile:
Profit
Daily Sharing
Year Charter Base Above Base
Dwt Built Type Expiry Rate Rate (2009)
------- ----- -------- --------- -------- ------------
Eight Tanker Vessels
100% first
Time $1,000 + 50%
Dauntless 46,168 1999 Charter Q1/2010 $ 16,250 thereafter
100% first
Time $1,000 + 50%
Ioannis P. 46,346 2003 Charter Q4/2010 $ 18,000 thereafter
Bareboat
Miss Marilena 50,000 2009 Charter Q1-2/2019 $ 14,400 -
Bareboat
Lichtenstein 50,000 2009 Charter Q1-2/2019 $ 14,550 -
Bareboat
Ionian Wave 50,000 2009 Charter Q1-2/2016 $ 14,300 -
Bareboat
Tyrrhenian Wave 50,000 2009 Charter Q1-2/2016 $ 14,300 -
Bareboat
Britto 50,000 2009 Charter Q1-2/2019 $ 14,550 -
Bareboat
Hongbo 50,000 2009 Charter Q1-2/2019 $ 14,550 -
Total Tanker dwt 392,514
Five Drybulk Vessels
Time
Cyclades 75,681 2000 Charter Q2/2011 $ 54,250 -
Time
Amalfi 45,526 2000 Charter Q4/2009 $ 12,500 -
Papillon (ex Voc Bareboat
Gallant) 51,200 2002 Charter Q2/2012 $ 24,000 -
Time
Pepito 75,928 2001 Charter Q2/2013 $ 41,000 -
Time
Astrale 75,933 2000 Charter Q2/2011 $ 18,000 -
Total Drybulk dwt 324,268
TOTAL DWT 716,782
Outstanding Indebtedness
As of September 30, 2009, we had total indebtedness under senior secured
and unsecured credit facilities with our lenders of $407.3 million with
maturity dates from 2010 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 lending banks in
relation to certain loan covenant breaches that have taken place since
December 31, 2008. However, as of September 30, 2009, we were in breach of
additional covenants with all of our banks, which have not been previously
waived. These breaches relate to EBITDA, our overall cash position (minimum
liquidity covenants), adjusted net worth and the asset value cover of our
product tankers with certain banks. 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 we are unable to obtain covenant waivers or modifications for current
covenant breaches or for covenant breaches that may occur in future
reporting periods, our lenders may require that we post additional
collateral, enhance our equity and liquidity, increase our interest
payments or pay down our indebtedness to a level where we are in compliance
with our loan covenants, sell vessels, or they may accelerate our
indebtedness, which would impair our ability to continue to conduct our
business. In order to further enhance our liquidity, we may find it
necessary to sell vessels at a time when vessel prices are low, in which
case we will recognize losses and a reduction in earnings, which could
affect our ability to raise additional capital necessary to comply with our
loan covenants and/or the additional lender requirements described above.
Conference Call and Webcast
TOP Ships' management team will host a conference call on Tuesday, November
10, 2009, at 11:00 a.m. EST to discuss the Company's financial results.
Conference Call details:
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 "TOP Ships."
A replay of the conference call will be available until November 18, 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: 39394642#.
Slides and Audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the TOP Ships Inc. website (www.topships.org) under "Investor Relations."
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
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 and an average age of
2.6 years 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 9 months 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 8.4 years.
-- A fleet of five drybulk vessels with a total carrying capacity of
approximately 0.3 million dwt and an average age of 8.5 years, of which 47%
are sister ships. All of the Company's drybulk vessels have fixed rate
employment contracts for an average period of 23 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," "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.
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 Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2008 2009 2008 2009
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
Revenues $ 71,094 $ 25,153 $ 220,418 $ 83,582
EXPENSES:
Voyage expenses 13,327 367 36,944 2,952
Charter hire expense 14,032 21 47,874 10,827
Amortization of
deferred gain on sale
and leaseback of
vessels and write-off
of seller's credit (15,197) (49) (17,900) (7,799)
Lease termination
expense - 6 - 15,391
Other vessel
operating expenses 13,503 3,166 57,930 21,325
Dry-docking costs 640 382 9,672 4,584
Depreciation 5,856 8,550 26,808 22,859
Sub-manager fees 243 68 974 351
General and
administrative
expenses 9,011 5,861 23,442 15,447
Foreign currency
(gains) / losses, net (470) 109 81 118
Gain on sale of
vessels (18,978) - (19,178) -
----------- ----------- ----------- -----------
Operating income
(loss) 49,127 6,672 53,771 (2,473)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSES):
Interest and finance
costs (4,394) (3,868) (22,531) (9,632)
Loss on financial
instruments (3,331) (2,569) (14,938) (2,305)
Interest income 353 9 1,016 217
Other, net (115) 85 (108) (58)
----------- ----------- ----------- -----------
Total other
expenses, net (7,487) (6,343) (36,561) (11,778)
----------- ----------- ----------- -----------
Net Income (loss) $ 41,640 $ 329 $ 17,210 $ (14,251)
=========== =========== =========== ===========
Earnings (loss) per
share, basic and
diluted $ 1.44 $ 0.01 $ 0.69 $ (0.52)
=========== =========== =========== ===========
Weighted average common
shares outstanding,
basic and diluted 28,153,538 27,840,863 24,556,897 27,621,301
=========== =========== =========== ===========
On January 1, 2009 the Company adopted ASC 260-10-45-61A "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities" (formerly known as FSP FASB 03-6-1). Upon
adoption of the new guidance, unvested share-based payment awards that
contain rights to receive non forfeitable dividends or dividend equivalents
(whether paid or unpaid) are participating securities, and thus, should be
included in the two-class method of computing earnings per share (EPS).
This standard was applied retroactively to all periods presented and
reduced basic EPS by $0.04 and $0.01 for the three and nine months ended
September 30, 2008, respectively.
TOP SHIPS INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
December 31, September 30,
2008 2009
------------- -------------
ASSETS (Unaudited) (Unaudited)
CASH AND CASH EQUIVALENTS $ 46,242 $ -
ADVANCES FOR VESSELS ACQUISITIONS / UNDER
CONSTRUCTION 159,971 -
VESSELS, NET 414,515 688,317
RESTRICTED CASH 52,575 24,465
OTHER ASSETS 25,072 11,679
------------- -------------
Total assets $ 698,375 $ 724,461
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
FINANCIAL INSTRUMENTS 16,438 15,499
FAIR VALUE OF BELOW MARKET TIME CHARTER 3,911 -
BANK DEBT 342,479 407,304
DEFERRED GAIN ON SALE AND LEASEBACK OF VESSELS 15,479 -
OTHER LIABILITIES 28,017 20,184
------------- -------------
Total liabilities 406,324 442,987
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY 292,051 281,474
------------- -------------
Total liabilities and stockholders' equity $ 698,375 $ 724,461
============= =============
TOP SHIPS INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Expressed in thousands of U.S. Dollars)
Nine Months Ended
September 30,
------------------------
2008 2009
----------- -----------
(Unaudited) (Unaudited)
Cash Flows provided by Operating Activities:
Net income (loss) $ 17,210 $ (14,251)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 32,156 24,887
Stock-based compensation expense 4,431 2,512
Change in fair value of financial instruments 13,943 (939)
Financial instrument termination payments (7,500) -
Amortization of deferred gain on sale and
leaseback of vessels and write-off of
seller's credit (17,900) (7,799)
Amortization of fair value below market time
charter (15,418) (3,911)
Loss on sale of other fixed assets 112 93
Gain on sale of vessels (19,178) -
Change in operating assets and liabilities 4,251 482
----------- -----------
Net Cash provided by Operating Activities 12,107 1,074
Cash Flows provided by (used in) Investing
Activities:
Principal payments received under capital lease 42,950 -
Principal payments paid under capital lease (68,828) -
Advances for vessels acquisitions / under
construction (64,520) -
Vessel acquisitions and improvements (118,142) (136,663)
Insurance claims recoveries 2,285 1,374
Increase in restricted cash (3,500) -
Decrease in restricted cash - 28,110
Net proceeds from sale of vessels 338,143 -
Net proceeds from sale of other fixed assets 65 204
Acquisition of other fixed assets (1,443) (668)
----------- -----------
Net Cash provided by (used in) Investing
Activities 127,010 (107,643)
Cash Flows (used in) provided by Financing
Activities:
Proceeds from long-term debt 180,789 111,708
Payments of long-term debt (307,676) (45,221)
Financial instrument upfront receipt 1,500 -
Financial instrument termination payments - (5,000)
Proceeds from issuance of common stock, net of
issuance costs 50,601 2,160
Cancellation of fractional shares (2) -
Repurchase and cancellation of common stock - (732)
Payment of financing costs (2,631) (2,588)
----------- -----------
Net Cash (used in) provided by Financing
Activities (77,419) 60,327
Net increase (decrease) in cash and cash
equivalents 61,698 (46,242)
Cash and cash equivalents at beginning of period 26,012 46,242
----------- -----------
Cash and cash equivalents at end of period $ 87,710 $ 0
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 17,411 $ 11,915
=========== ===========
NON-CASH TRANSACTIONS
Fair value below market time charter $ 12,647 $ -
=========== ===========
Amounts owed for capital expenditures at the
end of period $ 47 $ 126
=========== ===========
Contact Information: Contacts: Investor Relations / Media: Ramnique Grewal Vice President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (212) 661-7566 Fax: (212) 661-7526 E-Mail: topships@capitallink.com Company: Alexandros Tsirikos Chief Financial Officer TOP Ships Inc. 1, Vassilissis Sofias Str. & Meg. Alexandrou Str. 151 24, Maroussi, Greece Tel: +30 210 812 8180 Email: atsirikos@topships.org