Eagle Bulk Shipping Inc. Reports Third Quarter 2008 Results

* 52% Increase in Third Quarter Revenues
* 50% Increase in Third Quarter Net Income
* 42% Increase in Third Quarter EBITDA

NEW YORK, Nov. 5, 2008 (GLOBE NEWSWIRE) -- Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today announced its results for the third quarter of 2008.

Financial Highlights for the Third Quarter included:

* Net Income of $23.2 million or $0.49 per share (based on a weighted average of 47,066,254 diluted shares outstanding for the quarter), up 50% from net income of $15.5 million or $0.37 per share (based on a weighted average of 42,365,252 diluted shares outstanding for the quarter) in the third quarter of 2007.

* Gross time charter revenue increased by $17 million, or 46%, to $53.9 million for the third quarter of 2008, from $36.9 million for the third quarter of 2007. Net time charter revenue increased by $17.6 million, or 52%, to $51.6 million for the third quarter of 2008, from $34.0 million for the third quarter of 2007.

* EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 42% to $38.9 million for the third quarter of 2008, from $27.4 million for the third quarter of 2007. Please see below for a reconciliation of EBITDA to net income.

* Declared and paid a dividend of $0.50 per share, or $23.4 million, on August 23, 2008, based on the second quarter 2008 results.

Based on the third quarter results, the Company has declared a cash dividend of $0.50 per share payable on or about November 26, 2008, to shareholders of record as of November 20, 2008.

Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, "We are very pleased with the achievement of record results in the third quarter, which reflect strong across-the-board execution."

Mr. Zoullas continued, "In today's challenging global environment, Eagle Bulk's strategy since inception of focusing on the versatile Supramax asset class and securing medium- to long-term charter contracts has positioned the Company well. Specifically, we have over $1 billion of contracted revenues, while maintaining one of the industry's lowest cash break-even levels."

Results of Operations for the three month periods ended September 30, 2008 and 2007

All of the Company's revenues were earned from Time Charters. Net revenues during the three months ended September 30, 2008, and 2007 were $51,553,232 and $33,955,704, respectively, an increase of 52%. Gross revenues in the third quarter of 2008 were $53,905,696, an increase of 46% from the $36,934,096 recorded in the comparable quarter in 2007, primarily due to a larger fleet size, as reflected by increased operating days, and an increase in daily time charter rates. Brokerage commissions incurred on revenues earned were $2,616,517 and $1,898,392 in the third quarters of 2008 and 2007, respectively. Included in net revenues in the third quarters of 2008 and 2007 are an amortization amount of $264,053 relating to the fair value below contract value of time charters acquired and $1,080,000 relating to the fair value above contract value of time charters acquired, respectively.

For the third quarter of 2008, total vessel expenses incurred amounted to $9,344,348. These expenses included $8,792,573 in vessel operating costs and $551,775 in technical management fees paid to the Company's third-party technical managers. For the corresponding quarter in 2007, total vessel expenses were $6,647,223 which included $6,144,820 in vessel operating costs and $502,403 in technical management fees.

General and administrative expenses for the three-month periods ended September 30, 2008 and 2007 were $6,666,748 and $1,691,594, respectively. The increase in general and administrative expenses is attributed to expenses, including non-cash compensation charges, associated with a larger fleet.

EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 42% to $38,858,408 for the third quarter of 2008, from $27,421,413 for the comparable quarter in 2007. (Please see below for a reconciliation of EBITDA to net income)

Net income for the third quarter of 2008 was $23,221,617, an increase of 50% from $15,501,895 in the comparable quarter in 2007. Diluted earnings per share in the third quarter of 2008 were $0.49, based on a weighted average of 47,066,254 diluted shares outstanding. In the comparable quarter of 2007, earnings per share were $0.37, based on a weighted average of 42,365,252 diluted shares outstanding.

Results of Operations for the nine month periods ended September 30, 2008 and 2007

All of the Company's revenues were earned from Time Charters. Net revenues during the nine-month periods ended September 30, 2008, and 2007 were $125,462,448 and $89,202,283, respectively, an increase of 41%. Gross revenues in the nine-month period of 2008 were $131,687,130, an increase of 35% from the $97,422,371 recorded in the comparable period in 2007, primarily due to a larger fleet size, as reflected by increased operating days, and an increase in daily time charter rates. Third party brokerage commissions incurred on revenues earned were $6,488,735 and $4,980,088 in the nine-month periods of 2008 and 2007, respectively. The nine-month periods of 2008 and 2007 also reflected an amortization amount of $264,053 relating to the fair value below contract value of time charters acquired and $3,240,000 relating to the fair value above contract value of time charters acquired, respectively.

For the nine-month period of 2008, total vessel expenses incurred amounted to $24,932,088. These expenses included $23,343,511 in vessel operating costs and $1,588,577 in technical management fees paid to the Company's third-party technical managers. For the corresponding period in 2007, total vessel expenses were $19,749,702 which included $18,416,785 in vessel operating costs and $1,332,917 in technical management fees.

General and administrative expenses for the nine-month periods ended September 30, 2008 and 2007 were $16,478,840 and $8,292,167, respectively. The increase in general and administrative expenses is attributed to expenses, including non-cash compensation charges, associated with a larger fleet.

EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, increased by 32% to $94,208,782 for the nine-month period of 2008, from $71,527,623 for the comparable period in 2007. (Please see below for a reconciliation of EBITDA to net income)

Net income for the nine-month period of 2008 was $52,473,557, an increase of 46% from $35,914,378 in the comparable period in 2007. Diluted earnings per share for the nine-month period of 2008 were $1.11, based on a weighted average of 47,062,811 diluted shares outstanding. In the comparable period of 2007, earnings per share were $0.88, based on a weighted average of 40,590,796 diluted shares outstanding.

Liquidity and Capital Resources

Net cash provided by operating activities during the nine month periods ended September 30, 2008 and 2007 was $81,593,271 and $62,587,594, respectively. The increase was primarily due to cash generated from the operation of the fleet at a higher time charter rate for 5,094 days in the nine month period ended September 30, 2008 compared to 4,417 days during the same period in 2007.

Net cash used in investing activities during the nine month period ended September 30, 2008, was $273,887,573, compared to $391,953,782 during the corresponding period in 2007. Investing activities during the current nine month period included an amount of $146,688,116 spent for the acquisition of GOLDENEYE and REDWING, which were delivered in the second and third quarter of 2008, respectively, and advancing a total of $127,078,734 for the newbuilding vessel construction program. Investing activities during the comparable nine month period in 2007 primarily related to the expenditure of $138,876,098 for the acquisition of three Supramax vessels, SHRIKE, SKUA and KITTIWAKE, advances of $265,089,166 for the newbuilding vessel construction program, and net proceeds of $12,011,482 from the sale of SHIKRA, a 1984-built Handymax vessel, to an unrelated third party.

Net cash provided by financing activities during the nine month period ended September 30, 2008 was $72,374,980, compared to net cash provided by financing activities of $462,037,833 during the corresponding nine month period in 2007. Financing activities during the current nine month period primarily relates to borrowings of $144,724,967 from the Company's revolving credit facility to fund the newbuilding program, and paying $70,149,063 in dividends. Financing activities during the comparable nine month period in 2007 primarily relates to gross proceeds of $239,848,266 from the issuance of common shares of the Company's stock, incurring costs of $5,701,127 associated with the share sale, borrowings of $300,304,279 from the revolving credit facility, debt repayments of $12,440,000 from the proceeds of the sale of the SHIKRA, and payment $58,771,405 in dividends.

As of September 30, 2008, the Company's cash balance was $32,984,370 compared to a cash balance of $152,903,692 at December 31, 2007. In addition, $10,500,000 in cash deposits are maintained with our lender for loan compliance purposes and this amount is recorded in Restricted Cash in our financial statements as of September 30, 2008. Also recorded in Restricted Cash is an amount of $276,056 which is collateralizing a letter of credit relating to the Company's office leases.

As of September 30, 2008, total availability under the $1,600,000,000 revolving credit facility is $858,032,143. The facility also provides the Company with the ability to borrow up to $20,000,000 for working capital purposes. The Company anticipates that its current financial resources, together with cash generated from operations and, if necessary, borrowings under the revolving credit facility will be sufficient to fund the operations of its fleet, including working capital requirements, for the foreseeable future. The Company is in compliance with all of the covenants contained in its debt agreements as of September 30, 2008.

The Company's policy is to declare quarterly dividends to shareholders in March, May, August and November. Payment of dividends is in the discretion of the Board of Directors and is limited by the terms of certain agreements to which the Company and its subsidiaries are parties to and provisions of Marshall Islands law. The Company's revolving credit facility permits it to pay quarterly dividends in amounts up to its cumulative free cash flows, which is our earnings before extraordinary or exceptional items, interest, taxes, depreciation and amortization (Credit Agreement EBITDA), less the aggregate amount of interest incurred and net amounts payable under interest rate hedging agreements during the relevant period and an agreed upon reserve for dry-docking for the period, provided that there is not a default or breach of a loan covenant under the credit facility and the payment of the dividends would not result in a default or breach of a loan covenant. In this connection, the drybulk market has recently declined substantially. Depending on market conditions in the dry bulk shipping industry and acquisition opportunities that may arise, the Company may be required to obtain additional debt or equity financing which could affect its dividend policy. In addition, any determination by the Board of Directors to pay dividends in the future will depend upon the Company's results of operations, financial condition, liquidity needs, capital restrictions, loan covenants and other factors deemed relevant by the Board of Directors in its discretion.

More at: www.eagleships.com

About Eagle Bulk Shipping Inc.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in New York. The Company is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.

Eagle Bulk Shipping Inc.