DryShips (DRYS)

Third Quarter 2009 Financial Highlights

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For the third quarter of 2009, the Company reported a net profit of $35.6 million or $0.12 basic and diluted profit per share. Included in the third quarter 2009 results is a loss of $39.3 million or $0.15 per share associated with the valuation of the Company’s interest rate swaps. Excluding this item, net income would amount to $74.9 million or $0.27 per share.

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Basic earnings per share for the third quarter of 2009 include a non-cash accrual for the cumulative dividends on the Series A Convertible Preferred Stock, amounting to $4.0 million, which reduces the income available to common shareholders (basic earnings per share is calculated as net income less accrued dividends on preferred stock divided by weighted average number of common shares outstanding).

George Economou, Chairman and Chief Executive Officer of the Company commented:

“We are pleased to report another quarter of profitable operating results for DryShips as both our drilling and drybulk units continued to perform at high utilization rates. We are particularly pleased with the high utilization rates achieved by the Eirik Raude, which is drilling off Ghana at the Jubilee field for Tullow Oil. The Leiv Eiriksson is expected to complete its assignment with Shell in the North Sea during October and commence mobilization for  drilling operations in the Black Sea under a 3-year contract for Petrobras. Most economic indicators for the world economy seem to indicate the end of the recession and we are also seeing the signs of recovery from countries besides China and India. The stimulus plan implemented by the Chinese government earlier in the year has by no means played itself out, as the majority of this money went to infrastructure development which is medium to long term projects. While drybulk shipping demand is projected to remain strong for the coming years, the large orderbook remains a cause for concern, especially for 2010. Actual deliveries in the first nine months of 2009 were much smaller than were anticipated at the beginning of the year and offer some hope that cancellations and delays will alleviate the projected oversupply.

Our drybulk fleet is now virtually fully fixed for the remainder of 2009 and 2010 and 77% fixed for 2011 at healthy levels and we are prepared to leverage the volatility in freight rates in the future through further vessel acquisitions. DryShips now has $1.44 billion in fixed EBITDA from its dry bulk and drilling units over the next 2.25 years and we are well positioned to take advantage of acquisition opportunities as they arise.”

Second Quarter 2009 Financial Highlights

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For the second quarter of 2009, the Company reported a net profit of $52.8 million or $0.24 basic and diluted profit per share. Included in the second quarter results are (i) a loss related to contract termination fees and forfeiture of vessel deposits of $44.8 million or $0.21 per share, (ii) a non cash gain of $51.6 million or $0.24 per share associated with the valuation of the Company’s interest rate swaps and (iii) amortization of stock based compensation of $9.5 million or $0.04 per share. Excluding these items, net income would amount to $55.5 million or $0.25 per share.

George Economou, Chairman and Chief Executive Officer of the Company commented:

“We are pleased to report another quarter of profitable operating results for Dryships as both our drilling and dry bulk units continued to perform at high utilization rates. The last several months the dry bulk freight markets have recovered to healthy levels led by strong growth in China. The stimulus plan implemented by the Chinese government earlier in the year has translated into accelerated infrastructure development and increased commodity demand. Steel prices are on the rise and are providing healthy margins to steel mills. We are also beginning to see signs of improvement from other regions, with steel mills in Europe, Japan and elsewhere restarting idle capacity. We have taken advantage of this strengthening and now have approximately 87% of our shipdays in 2009 and 2010 fixed at healthy levels and can always leverage the volatility in freight rates in the future through further vessel acquisitions. Dryships now has $1.6 billion in fixed EBITDA from its dry bulk and offshore units over the next 2.5 years. The steps taken by the company to strengthen it’s balance sheet, earlier in the year, have positioned us to take advantage of distressed deals that are beginning to surface despite the improvement in freight rates.”

Financial Highlights

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For the fourth quarter of 2008, the Company reported a Loss of $1.02 billion or $18.42 per share. Included in the fourth quarter results are a non-cash loss of  $700.5 million or $12.68 per share related to the impairment of goodwill associated with the acquisition of Ocean Rig ASA, a loss related to contract termination fees and forfeiture of vessel deposits of $160.0 million or $2.90 per share, a non cash loss of $177.0 million or $3.20 per share associated with the valuation of the Company’s interest rate swaps, a loss on the sale of one vessel of $3.0 million or $0.05 per share, amortization of stock based compensation of $9.5 million or $0.17 per share and a gain on the contract cancellation of one vessel of $9.1 million or 0.16 per share . Excluding these items, Net Income would amount to $23.5 million or $0.43 per share.

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For the year ended December 31, 2008, the Company reported a Loss of $361.3 million or $8.11 per share. Included in the year ended December 31, 2008 results are a non-cash loss of $700.5 million or $15.71 per share related to impairment of goodwill associated with the acquisition of our wholly-owned subsidiary Ocean Rig ASA, a loss related to contract termination fees and forfeiture of vessel deposits of $160.0 million or $3.59 per share, a non cash loss of $207.9 or $4.66 per share associated with the valuation of the Company’s interest rate swaps, a gain on the sale of eight vessels of $223.0 million or $5.00 per share, amortization of stock based compensation of $31.5 million or $0.71 per share and a gain on the contract cancellation of one vessel of $9.1 million or 0.20 per share. Excluding these items, Net Income would amount to $506.2 million or $11.35 per share.

Financial Highlights

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The Company reported Net Income of 180.0 million or $4.21 per fully diluted share for the third quarter of 2008. Included in the third quarter results is a capital gain on the sale of two vessels of $65.8 million or $1.54 per fully diluted share and a non-cash loss of $36.8 million or $0.86 per fully diluted share associated with the valuation of interest rate swaps. Excluding these items Net Income would amount to $151.0 million or $3.53 per fully diluted share.

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For the third quarter of 2008 the Company reported EBITDA¹, excluding vessel gains, of $194.2 million.  

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In September 2008 the Company declared its fourteenth consecutive quarterly cash dividend of $0.20 per common share.

Financial Highlights

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The Company reported Net Income of $299.8 million or $7.10 per fully diluted share for the second quarter of 2008. Included in the second quarter results is a capital gain on the sale of three vessels of $135.8 million or $3.21 per fully diluted share and a non-cash gain of $12.2 million or $0.29 per fully diluted share associated with the valuation of interest rate swaps. Excluding these items Net Income would amount to $151.8 million or $3.60 per fully diluted share.

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For the second quarter of 2008 the Company reported adjusted EBITDA¹, excluding vessel gains, of $224 million.  

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In July 2008 the Company declared its thirteenth consecutive quarterly cash dividend of $0.20 per common share.

Financial Highlights

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The Company reported Net Income of $176.3 million or $4.61 per share, for the first quarter of 2008.  Included in the first quarter results is a capital gain on the sale of one vessel of $24.4 million or $0.64 per share and a non-cash loss of $6.1 million or $0.16 per share associated with the valuation of interest rate swaps.  Excluding these items Net Income would amount to $158.0 million or $4.13 per share.

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For the first quarter of 2008 the Company reported EBITDA¹, excluding vessel gains and non-cash items, of $201.4 million.

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In April 2008 the Company declared and paid its twelfth consecutive quarterly cash dividend of $0.20 per common share.

Financial Highlights

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For the fourth quarter of 2007 the Company reported Net Income of $195.2 million or $5.37 per share. Included in the fourth quarter results is a capital gain on the sale of 1 vessel of $31.5 million or $0.87 per share. Excluding this gain, Net Income would amount to $163.7 million or $4.50 per share.

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For the fourth quarter of 2007 the Company reported EBITDA¹ of $229.3 million. [¹Please see later in this release for a reconciliation of EBITDA to net cash provided by Operating activities.]

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For the year ended December 2007, the Company reported Net Income of $475.4 million or $13.32 per share. Included in the full year results is a capital gain on the sale of 11 vessels of $135.0 million or $3.78 per share. Excluding this gain, Net Income would amount to $340.4 million or $9.54 per share.

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For the year ended December 2007 the Company reported EBITDA of $600.8 million.

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In January 2008 the Company declared and paid its eleventh consecutive quarterly cash dividend of $0.20 per common share.

Financial Highlights

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The Company reported Net Income of $103.5 million or $2.92 per share, for the third quarter of 2007.  Included in the third quarter results is a capital gain on the sale of 2 vessels of $19.2 million or $0.54 per share. Excluding this gain, Net Income would amount to $84.3 million or $2.38 per share.

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For the third quarter of 2007 the Company reported EBITDA, excluding vessel gains, of $117.3 million, which is the highest EBITDA reported in a single quarter since the Company’s inception¹.

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In September 2007 the Company declared its tenth consecutive quarterly cash dividend of $0.20 per common share which was paid on October 31, 2007.

Financial Highlights

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The Company reported Net Income of $110.2 million or $3.11 per share, for the second quarter of 2007.  Included in the second quarter results is a capital gain on the sale of 5 vessels of $53.8 million or $1.52 per share. Excluding this gain, Net Income would amount to $56.4 million or $1.59 per share.

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For the second quarter of 2007 the Company reported EBITDA, excluding vessel gains, of $87.3 million, which is the highest EBITDA excluding vessel gains reported in a single quarter since the Company’s inception.

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In July 2007 the Company declared and paid its ninth consecutive quarterly cash dividend of $0.20 per common share.

Financial Highlights

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The Company reported Net Income of $66.4 million or $1.87 per share, for the first quarter of 2007.  Included in the first quarter results is a capital gain on the sale of three vessels of $30.5 million or $0.86 per share. Excluding this gain Net Income would amount to $35.9 million or $1.01 per share.

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For the first quarter of 2007 the Company reported EBITDA, excluding vessel gains, of $63.5 million, which is the highest EBITDA excluding vessel gains reported in a single quarter since the Company’s inception.

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In April 2007 the Company declared and paid its eighth consecutive quarterly cash dividend of $0.20 per common share.

Financial Highlights

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For the fourth quarter of 2006 the Company reported EBITDA of $64.1 million, which is the highest EBITDA reported in a single quarter since the Company’s inception.

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The Company reported Net Income of $35.9 million or $1.02 per share, for the fourth quarter of 2006.  Included in the fourth quarter results is a gain on the sale of one vessel of $8.6 million or $0.24 per share. Excluding this gain Net Income would amount to $27.3 million or $0.77 per share.

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For the year ended December 31, 2006 the Company reported EBITDA of $158.4 million. ¹

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For the year ended December 31, 2006, the Company reported Net Income of $56.7 million or $1.75 per share.  Included in the year end 2006 results is a gain on the sale of one vessel of $8.6 million or $0.27 per share and a one-time loss on Forward Freight Agreement (“FFA”) contracts of $ 22.5 million or $0.69 per share. Excluding the above items Net Income would amount to $70.6 million or $2.18 per share.

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In January 2007 the Company declared and paid its seventh consecutive quarterly cash dividend of $ 0.20 per common share.