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

ATHENS, GREECE -- (Marketwire) -- 11/02/11 -- OceanFreight Inc. (NASDAQ: OCNF) (the "Company"), a global provider of marine transportation services, today announced its financial results for the three months ended September 30, 2011.

Financial Highlights

For the three months ended September 30, 2011, the Company reported a Net Loss of $19.2 million, or basic and diluted earnings equal to a loss of $3.23 per share. Included in these results are non-recurring costs associated with the proposed merger with a subsidiary of Dryships Inc. of $20.5 million.

Excluding this non-recurring costs, Net Income for the three months ended September 30, 2011 was $1.3 million, or basic and diluted earnings equal to $0.22 per share.

Third Quarter 2011 Results

For the three months ended September 30, 2011, the Company reported Voyage Revenues of $13.1 million, Operating Loss of $18.3 million and Net Loss of $19.2 million. During the same period, Net cash provided by operating activities was $4.8 million and Adjusted EBITDA was a loss of $7.9 million. Please see the reconciliation of Adjusted EBITDA to net cash provided by operating activities below.

The Company owns a fleet of eleven vessels, comprised of six drybulk vessels (four Capesize and two Panamaxes) and five under construction Very Large Ore Carriers (VLOC). The fleet has a combined deadweight tonnage of about 1.9 million tons. During the three months ended September 30, 2011, the Company operated an average of six drybulk vessels that earned an average time charter equivalent rate, or TCE, of $23,287 per day.

Fleet Data

----------------------------------------------------------------------------
                                                     Three Months Ended
                                                       September 30,
----------------------------------------------------------------------------
                                                   2010             2011
----------------------------------------------------------------------------

----------------------------------------------------------------------------
  Average number of vessels (1)                     12                6
----------------------------------------------------------------------------
  Total voyage days for fleet (2)                  1,063             534
----------------------------------------------------------------------------
  Total calendar days for fleet (3)                1,104             552
----------------------------------------------------------------------------
  Time charter equivalent rate (TCE) (4)    $     22,097     $     23,287
----------------------------------------------------------------------------
  Fleet utilization (5)                            96.3%            96.7%
----------------------------------------------------------------------------

(1)       Average number of vessels is the number of vessels that comprised
          our operating 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 our operating 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
          periods.

(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 the TCE for the periods then ended:

----------------------------------------------------------------------------
   (Dollars in thousands, except Average             Three Months Ended
         Daily results - unaudited)                    September 30,
----------------------------------------------------------------------------
                                                   2010             2011
----------------------------------------------------------------------------

----------------------------------------------------------------------------
  Voyage revenue                                  24,784           13,149
----------------------------------------------------------------------------
  Voyage expenses                                 (1,295)           (714)
----------------------------------------------------------------------------
  Revenue on a time charter basis                 23,489           12,435
----------------------------------------------------------------------------

----------------------------------------------------------------------------
  Total voyage days for fleet                      1,063             534
----------------------------------------------------------------------------
  Time charter equivalent (TCE) rate        $     22,097     $     23,287
----------------------------------------------------------------------------


Financial Statements
The following are the Company's Consolidated Statements of Operations for the three months ended September 30, 2010 and 2011:

                                                     Three Months Ended
                                                        September 30,
                                                ----------------------------
  (Dollars in thousands, except for share
            and per share data)
                                                       2010             2011
                                                -----------      -----------
STATEMENT OF OPERATIONS DATA                    (unaudited)      (unaudited)
------------------------------------------

Voyage revenues                              $       24,784   $       13,149
Loss on forward freight agreements                    (124)                -
                                                -----------      -----------
Gross revenue                                        24,660           13,149

Voyage expenses                                     (1,295)            (714)
Vessels operating expenses                         (10,113)          (4,575)
Depreciation                                        (6,979)          (4,162)
General and administrative expenses                 (1,415)         (21,417)
Survey and drydocking costs                           (448)            (590)
Loss on sale of vessels and vessels held
 for sale                                          (63,854)                -
                                                -----------      -----------
Operating loss                                     (59,444)         (18,309)
                                                ===========      ===========

Interest income                                           6               57
Interest expense and finance costs                    (862)            (659)
Loss on derivative instruments                      (2,734)            (315)
                                                -----------      -----------
Net loss                                     $     (63,034)   $     (19,226)
                                                ===========      ===========

Loss per common share, basic and diluted     $      (16,32)   $       (3,23)

Weighted average number of common shares,
 basic and diluted (1)                            3,863,333        5,946,180

(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 the Company's Consolidated Balance Sheets as of December 31, 2010 and September 30, 2011:


(Dollars in thousands, except per share
 data)
                                                      2010              2011
                                              ------------      ------------
ASSETS                                           (audited)       (unaudited)
----------------------------------------
CURRENT ASSETS:
  Cash and cash equivalents                $         9,549    $       11,034
  Vessels held for sale                             88,274                 -
  Other current assets                              11,931             4,365
                                              ------------      ------------
    Total current assets                           109,754            15,399
                                              ------------      ------------

FIXED ASSETS, NET:
  Vessels under construction                        46,618            95,329
  Vessels, net of accumulated                      311,144           298,908
   depreciation
  Other, net of accumulated depreciation               597               418
                                              ------------      ------------
    Total fixed assets, net                        358,359           394,655
                                              ------------      ------------

OTHER NON-CURRENT ASSETS
  Restricted cash                                    5,511             3,011
  Other non -current assets                          5,239             5,372
                                              ------------      ------------
    Total assets                                   478,863           418,437
                                              ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------
CURRENT LIABILITIES:
  Current portion of long-term debt                 82,331            26,524
  Other current liabilities                         28,980            30,891
                                              ------------      ------------
    Total current liabilities                      111,311            57,415
                                              ------------      ------------

NON-CURRENT LIABILITIES:
  Derivative liability, net of current               4,875             2,427
   portion
  Long-term debt, net of current portion           127,441           111,187
                                              ------------      ------------
    Total non-current liabilities                  132,316           113,614
                                              ------------      ------------



STOCKHOLDERS' EQUITY:                              235,236           247,408
                                              ------------      ------------
    Total liabilities and stockholders'
     equity                                        478,863           418,437
                                              ============      ============


Adjusted EBITDA Reconciliation

The Company 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 September 30,
(amounts in thousands of U.S. dollars)              2010               2011
                                          --------------     --------------

Net cash provided by operating
 activities                                        8,043              4,782
Net increase/(decrease) in operating
 assets                                           (8,315)              (597)
Net (increase)/decrease in operating
 liabilities                                       9,163            (14,412)
Net interest expense (*)                           2,764              2,387
Amortization of deferred financing
 costs included in interest expense                 (130)               (71)
                                          --------------     --------------
Adjusted EBITDA                                   11,525             (7,911)
                                          ==============     ==============

(*) 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 the date of this report:

                                                 Gross
                                                 Rate
               Year                    Current    per   Earliest    Latest
 Vessel Name  Built   DWT     Type   Employment   Day  Redelivery Redelivery
------------- ----- ------- -------- ---------- ------ ---------- ----------
Drybulk
 Vessels
-------------
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
M/V
 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
 Acquired
-------------
Newbuilding
 VLOC #1 (1)   2012 206,000 Capesize     TC     25,000   Apr-15     Apr-20
Newbuilding
 VLOC #2 (2)   2012 206,000 Capesize     TC     23,000   Aug -17    Aug -22
Newbuilding
 VLOC #3 (3)   2012 206,000 Capesize     TC     21,500   Oct-19     Oct-26
Newbuilding
 VLOC #4       2012 206,000 Capesize    Spot
Newbuilding
 VLOC #5       2013 206,000 Capesize    Spot

(1)  Upon delivery of the vessel, which is expected in the first 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 second 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.

The Company is an owner and operator of drybulk vessels that operate worldwide. The Company 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.

The Company's common stock is listed on the NASDAQ Global Market where it trades under the symbol "OCNF." Visit our website at www.oceanfreightinc.com.

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 the Company 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, the Company 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 the Company'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.

Please see the Company's filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.

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