FreeSeas Inc. Reports Financial Results for the Third Quarter Ended September 30, 2008

Operating Revenue Increased 357 Percent in Third Quarter

Company Announces Quarterly Dividend of $.075 Per Share

PIRAEUS, Greece, Nov. 13, 2008 (GLOBE NEWSWIRE) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEW) (Nasdaq:FREEZ) ("FreeSeas" or "the Company"), a provider of seaborne transportation for drybulk cargoes, announced today unaudited operating results for the third quarter ended September 30, 2008.

Financial Highlights

* Operating revenues grew by 357.5% compared to the same quarter of 2007, to $22.32 million from $4.88 million.
* Net income for the third quarter of 2008, was $9.36 million or $0.44 basic earnings per share based on 21,171,329 common shares outstanding, compared with a net loss of $0.50 million, or $0.07 basic loss per share based on 6,674,627 common shares outstanding for the same quarter of 2007.
* Adjusted EBITDA for the quarter ended June 30, 2008 increased by 537% as compared to the same period in 2007, to $15.11 million from $2.37 million.
* Our average TCE rate for the quarter increased by 67.7% to $28,558 from $17,028 for the year earlier period.

Dividend Information

* The Company also announced today that it has declared a quarterly dividend of $0.075 per share on its common stock outstanding. The dividend will be paid on November 24, 2008 to shareholders of record as of December 3, 2008.

Fleet Developments

Overall, FreeSeas reported a 191% increase in operating days in the third quarter of 2008 compared with same period in 2007 reflecting approximately 8.3 vessels in 2008 as opposed to an average of 3.2 in the same quarter of 2007.

Free Destiny

July 23: The Company announced that the Free Destiny was delivered to her charterers for a 60 to 90 day spot charter at a rate of $28,500 per day.

September 18: FreeSeas announced that the Free Destiny had been delivered to her charterers for spot charter of approximately 40 days at a rate of $18,000 per day.

Free Envoy

July 9: The Company announced that the Free Envoy was delivered to her charterers for a time charter of approximately one year at a rate of $32,000 per day.

Free Lady

July 7: The Free Lady, a 2003-built, 50,246 dwt Handymax vessel, was delivered to FreeSeas and began a two-year time charter at a rate of $51,150 per day

Free Maverick

September 2: FreeSeas announced that it had taken delivery of the 1998-built, 23,994 dwt Handysize vessel Free Maverick. The Free Maverick is currently employed on a time-charter through April/July 2009 at $32,000 per day.

Mr. Ion Varouxakis, President and CEO, commented, "Over the past two years we have built a solid operating company. We have modernized and dramatically increased the size of our fleet. We have entered into valuable charter contracts with some of the most credit-worthy charterers in our industry. We have invested in the handysize segment, which represents less charter volatility. Today's results are the culmination of many years of hard work and carefully thought out investment and operational decisions. We have today announced net income for the third quarter of 2008 in excess of $9.3 million compared to a loss of $0.5 million in the comparable period last year. FreeSeas has a sustainable position in the market."

Varouxakis continued, "As we announce these results, we are witnessing a complete change, if not reversal, in the business environment as the current global financial crisis has slowed international trade and caused a drop in charter rates from all-time highs in May to below vessel operating costs. We expect to take advantage of attractive acquisition opportunities which may arise only once in a generation.

Our Board has determined that the company's strategy must adapt to the new reality. Retaining cash will add to our financial flexibility in order to aggressively take advantage of the opportunities as they are presented.

Therefore, our Board has decided to revise our dividend policy. The dividend shall now represent 50% of distributable cash flow, after taking into consideration the company's expenses, debt service, and reserves including reserves for further capital investments into the shipping sector, as may be determined each quarter by the Board of Directors. We believe that better long-term value can be achieved for our shareholders under this new policy. In accordance with this revised policy, we have declared, today, a dividend of $.075 per share with respect to the third quarter of 2008. Based upon our closing stock price of $1.98, this represents a current yield of 15.2%."

Mr. Varouxakis concluded, "With substantial insider ownership of outstanding common stock, we have given due consideration to the expectations that had been set in the past, measured against a dramatically reshaped business environment. We are confident that our shareholders will realize, in the light of the Company's exceptionally strong performance, that we are making these decisions from a position of strength."

Conference Call

As previously announced, the Company will host a conference call on November 13, 2008 at 4:15PM Eastern Time to review the results as well as management's outlook for the business. The call, which will be hosted by FreeSeas' management, may contain information beyond what is included in this earnings press release.

To participate in the call from the United States or Canada, please dial +1.888.694.4702 approximately five minutes prior to the starting time. To participate in the call outside the United States or Canada, please dial +1-973-582-2741 five minutes prior to the starting time. The Conference ID is 7249-2444.

Two hours after the completion of the conference call, a digital recording of the call will be available for seven days, and can be accessed by dialing +1.800.642.1687 from inside the United States or Canada and +1.706.645.9291 from outside the United States or Canada and entering the Conference ID 7249-2444.

The call, which will be simultaneously broadcast live over the Internet, can be accessed at: http://www.videonewswire.com/event.asp?id=52848. The online archive of the broadcast will be available within one hour of the live call at the same web address and will remain available for one month.

About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal offices in Piraeus, Greece. FreeSeas is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry bulk carriers. Currently, it has a fleet of seven Handysize vessels and two Handymax vessels. FreeSeas' common stock and warrants trade on the NASDAQ Global Market under the symbols FREE, FREEW and FREEZ, respectively. Risks and uncertainties are described in reports filed by FreeSeas Inc. with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the SEC's website at www.sec.gov. For more information about FreeSeas Inc., please go to our corporate website, www.freeseas.gr.

FreeSeas Inc. press release