Excel Maritime Reports Second Quarter 2008 Diluted EPS of $3.14 and Declares Dividend of $0.40 Per Share
ATHENS, GREECE – August 11, 2008 – Excel Maritime Carriers Ltd (NYSE: EXM),
an owner and operator of dry bulk carriers and a leading international provider of
worldwide seaborne transportation services for dry bulk cargoes, announced today its
operating and financial results for the second quarter ended June 30, 2008.
Second Quarter and Year to Date Highlights:
• On April 15, 2008, the Company successfully completed the acquisition of
Quintana Maritime Limited, creating a combined company that operates a fleet of
47 vessels with a total carrying capacity of approximately 3.7 million DWT and an
average age of approximately 8.7 years;
• The second quarter 2008 results include the consolidated results of Excel and
Quintana starting from April 16, 2008. In this respect, approximately $14.1 million
of revenues earned by Quintana between April 1 and April 15, 2008 have not been
included in the second quarter results;
• Revenues from operations increased by approximately 451% to $205.5 million in
the second quarter of 2008 compared to $37.3 million in the corresponding period
in 2007. Revenues include non-cash adjustments of approximately $75.7 million,
relating to the amortization of unfavorable time charters that were fair valued
upon acquiring Quintana;
• Net income increased by approximately 534% to $126.8 million or $3.14 per
diluted share, compared to $20.0 million or $1.00 per diluted share in the second
quarter of 2007. Net income includes a non-cash interest-rate swap gain in the
period of approximately $22.8 million compared to $0.3 million in the second
quarter of 2007.
• Adjusted EBITDA was approximately $88.6 million compared to $23.7 million in
the second quarter of 2007, an increase of approximately 274%;
• An average of 42.2 vessels were operated earning a blended average adjusted
time charter equivalent, net rate of $33,329 per day compared to $25,142 per day
for the second quarter of 2007;
• The Company increased its quarterly minimum dividend guidance by 100% to
$0.40 per share.
Second Quarter 2008 Results:
The acquisition of Quintana was accounted for using the “purchase method” of
accounting, whereby all Quintana’s assets were fair valued, resulting in goodwill of
approximately $321m. In particular, all Quintana’s time charters were fair valued,
giving rise to significant deferred assets and liabilities that will be amortized to income
over their remaining lives.
The second quarter results reflect consolidated Excel-Quintana results from April 16,
the day following the closing of the Quintana acquisition transaction. In this respect,
revenues and expenses from ex-Quintana vessels start contributing to Excel’s results
from April 16 onwards. The first quarterly results that will reflect a full quarter’s
operations of the combined entity will be the third quarter of 2008.
For the second quarter of 2008, Excel reported net income of $126.8 million, or $3.14
per diluted share, compared to net income of $20.0 million, or $1.00 per diluted
share, in the second quarter of 2007. The second quarter 2008 results include a noncash
unrealized interest-rate swap gain of $22.8 million due to increased forward
interest rates during the period compared to an unrealized interest-rate swap gain of
$0.2 million in the corresponding period in 2007. Swap gains and losses are recorded
in income as they do not meet the criteria for hedge accounting. The second quarter
results of 2007 also include a gain on sale of vessels of $6.2 million whereas no such
gains were recorded in the second quarter of 2008. Before the unrealized swap gains
and gain on sale of vessels, adjusted net income is $104.0 million, or $2.58 per
adjusted diluted share, compared to $13.5 million or $0.68 per share in the second
quarter 2007, an increase of approximately 670%.
Revenues for the second quarter of 2008 amounted to $205.5 million as compared to
$37.3 million for the same period in 2007, an increase of approximately 451%.
Included in revenues for the second quarter of 2008 are $75.7 million of non-cash
revenues relating to the amortization of underwater time charters. There were no
such non-cash revenue adjustments recorded in the corresponding period in 2007.
General and administrative expenses for the second quarter of 2008 include one-off
charges as a result of the merger of approximately $1.9 million, or $0.05 per diluted
share. In addition the Company initiated a stock based incentive program.
Amortization cost relating to the plan during the quarter was approximately $2.6
million or $0.06 per diluted share.
Adjusted EBITDA for the second quarter of 2008 was $88.6 million compared to $23.7
million for the second quarter of 2007, an increase of approximately 274%. Adjusted
EBITDA for the second quarter excludes bareboat charter amortization of
approximately $8.3 million relating to favorable bareboat time charters that were fair
valued upon the acquisition of Quintana and reflected as an asset on Excel’s balance
sheet. The amortization increases charter hire expense on Excel’s income statement
and there was no such amortization in the corresponding period in 2007. It also
excludes the amortization of unfavorable time charters as discussed above. Please
refer to a subsequent section of this Press Release for a reconciliation of adjusted
EBITDA to Net Income.
An average of 42.2 vessels were operated during the second quarter of 2008 earning
a blended average adjusted time charter equivalent rate of $33,329 per day,
compared to an average of 16.4 vessels operated during the second quarter of 2007
earning a blended average time charter equivalent rate of $25,142 per day.
Stamatis Molaris, President and Chief Executive Officer of Excel, stated, “The second
quarter results demonstrate the significant growth of Excel following the acquisition of
Quintana, even though Quintana’s results are not fully reflected in the second quarter
2008 results. The acquisition has completely transformed Excel in terms of growth
prospects as well as cash flow security. The recent minimum dividend guidance of
$0.40 per share is a reflection of Excel’s strong financial position. We are all very
optimistic for our future performance despite the recent market volatility. The
significant time charter cover inherited from Quintana provides a stable platform for
us to enhance our performance and enhance returns for our shareholders in the
future.”
Six Months to June 30, 2008
For the six-month period ended June 30, 2008, Excel reported net income of $165.2
million, or $5.50 per diluted share, compared to net income of $32.2 million, or $1.61
per diluted share, for the corresponding period in 2007. The first half 2008 results
include a non-cash unrealized swap gain of $21.0 million compared to an unrealized
swap gain of $0.3 million in the first half of 2007. The first half results of 2007 also
include a gain on sale of vessels of $6.2 million whereas no such gains were recorded
in the first half of 2008. Before the unrealized swap gains and gain on sale of vessels,
adjusted net income is $144.2 million, or $4.80 per adjusted diluted share, compared
to $25.8 million or $1.29 per share in the first half 2007, an increase of
approximately 459%.
Revenues for the six months to June 30, 2008 amounted to $275.3 million as
compared to $73.4 million for the same period in 2007, an increase of 275%.
Included in revenues for the first half of 2008 is a non-cash time charter amortization
of $75.7 million, as discussed above. There were no such non-cash revenues recorded
in the corresponding period in 2007.
Adjusted EBITDA for the first half of 2008 was $140.7 million compared to $46.4
million for the first half of 2007, an increase of approximately 203%. Adjusted
EBITDA for the first half of 2008 excludes bareboat charter amortization of
approximately $8.3 million relating to favorable bareboat time charters. There was no
such amortization in the corresponding period in 2007. It also excludes the
amortization of unfavorable time charters as discussed above. Please refer to a
subsequent section of this Press Release for a reconciliation of adjusted EBITDA to
Net Income.
An average of 30.1 vessels were operated during the first half of 2008 earning a
blended average adjusted time charter equivalent rate of $35,786 per day, compared
to an average of 16.7 vessels operated during the second quarter of 2007 earning a
blended average time charter equivalent rate of $23,760 per day.
Time Charter Coverage:
The current combined fleet charter coverage, after the acquisition of Quintana’s fleet,
for the second half of 2008 and for the full years 2009 and 2010 is expected to be
approximately 80%, 59% and 50% respectively. As a result, the projected net
revenues under fixed time charters for the second half of 2008 and for the full years
2009 and 2010 is expected to be approximately $207 million, $280 million and $221
million respectively, before any non-cash revenue adjustments.
During the remaining part of 2008 Excel will have 8 Panamax vessels, 2 Supramax
vessels and 5 Handymax vessels rolling off from their current charters.
Stamatis Molaris, President and Chief Executive Officer of Excel, stated, “Post-merger,
Excel’s combined fleet is deployed in a more balanced employment approach. We are
taking advantage of the positive rate environment to expand our charter coverage for
2009 and beyond to secure consistent cash flows and ongoing profitability to our
shareholders, while at the same time we are benefitting from operating certain part of
our fleet under short-term period charters or in the spot market.”
Dividend Guidance:
The Board of Directors has declared a dividend of $0.40 per share, payable on
September 15, 2008 to all shareholders of record as of September 1, 2008. Inclusive
of this dividend, Excel Maritime has declared an aggregate dividend of $1.40 per
share since May 2007. The dividend payment of $0.40 per share is consistent with the
guidance provided by the Board of Directors. The Board retains the authority to alter
the dividend policy at its discretion.
For more financial data please visit www.excelmaritime.com
ABOUT EXCEL MARITIME CARRIERS LTD.
Excel is an owner and operator of dry bulk carriers and a provider of worldwide seaborne
transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as
bauxite, fertilizers and steel products. After the acquisition of Quintana, Excel owns a fleet of
40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47
vessels (4 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 6 Handymax vessels) with
a total carrying capacity of approximately 3.7 million DWT. Excel Class A common shares
have been listed since September 15, 2005 on the New York Stock Exchange (NYSE) under
the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX)
since 1998. For more information about the Company, please go to our corporate website
www.excelmaritime.com.
Excel Maritime press release