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OceanFreight Inc. Reports Financial Results for the Second Quarter of 2011

ATHENS, GREECE -- (Marketwire) -- 08/23/11 -- 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

                                                Three Months Ended June 30,
                                                    2010           2011

Average number of vessels (1)                       11.6            6.6
Total voyage days for fleet (2)                      952            574
Total calendar days for fleet (3)                   1,050           600
Time charter equivalent (TCE) daily rate (4)  $    23,812    $    24,352
Fleet utilization (5)                               90.7%          95.7%

(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
(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)
Revenue on a time charter basis                        22,669         13,978

Total voyage days for fleet                               952            574
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
   (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)
  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
                                                     ---------- ------------

  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
                                                     ---------- ------------

  Restricted cash                                         5,511        3,011
  Other non -current assets                               5,239        5,443
                                                     ---------- ------------
    Total assets                                        478,863      423,617
                                                     ========== ============

  Current portion of long-term debt                      82,331       26,524
  Other current liabilities                              28,980       17,015
                                                     ---------- ------------
    Total current liabilities                           111,311       43,539
                                                     ---------- ------------

  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:

               Year                    Current    per   Earliest    Latest
 Vessel Name  Built   DWT     Type   Employment   Day  Redelivery Redelivery
------------- ----- ------- -------- ---------- ------ ---------- ----------
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
 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
 VLOC #1 (1)   2012 206,000 Capesize     TC     25,000   Apr-15     Apr-20
 VLOC #2 (2)   2012 206,000 Capesize     TC     23,000   Aug-17     Aug-22
 VLOC #3 (3)   2012 206,000 Capesize     TC     21,500   Oct-19     Oct-26
 VLOC #4       2012 206,000 Capesize    Spot
 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

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.

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