Excel Maritime Reports Results for the Second Quarter
and Six-Month period ended June 30, 2009
ATHENS, GREECE – August 5, 2009 – 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 and six-month period ended
June 30, 2009.
Second Quarter 2009 Highlights:
• Revenue from operations for the quarter amounted to $173.9 million as
compared to $205.5 million in the second quarter of 2008.
• Adjusted EBITDA for the second quarter of 2009 was $57.3 million compared to $91.0 million for the second quarter of 2008. A reconciliation of adjusted EBITDA to Net Income is included in a subsequent section of this release.
• An average of 47 vessels were operated during the second quarter of 2009 earning a blended average time charter equivalent rate of $22,148 per day compared to $33,325 per day for the second quarter of 2008 earned by an average of 42.2 vessels.
Six Months 2009 Highlights:
• Revenue from operations for the six-month period ended June 30, 2009 increased to $396.0 million from $275.3 million in the six-month period ended June 30, 2008.
• Net income for the six-month period ended June 30, 2009 was $196.0 million or $3.27 per weighted average diluted share compared to $158.6 million or $5.28 per weighted average diluted share in the respective period of 2008. These results include non-cash items of $21.0 million in both periods relating to the unrealized gain from the valuation of interest rate swaps. Net income for 2009 includes also a non-cash item of $0.1 million relating to the resulting gain from the sale of vessel Swift. Net income, excluding the above items, would amount to $174.9 million or $2.92 per weighted average diluted share for the six month period ended June 30, 2009 compared to $137.6 million or $4.58 per weighted average diluted share for the respective period in 2008.
• Adjusted EBITDA for the six month period ended June 30, 2009 was $110.5 million compared to $143.0 million for the respective period of 2008. A reconciliation of adjusted EBITDA to Net Income is included in a subsequent section of this release.
Year to Date Corporate Developments
During the six-month period ended June 30, 2009, the following corporate developments took place, which are discussed in more detail in our earnings release for the first quarter of 2009 released on May 22, 2009:
• Nordea and Credit Suisse loan amendments and equity infusion;
• Dividend suspension; and
• Receipt of $5.2 million, representing Oceanaut’s liquidation proceeds.
Fleet Developments:
Sale of vessel
Based on a Memorandum of Agreement dated February 20, 2009, the M/V Swift, a Handymax vessel of 37,687 dwt built in 1984 was sold for net proceeds of approximately $3.8 million. As of December 31, 2008, the vessel’s value was impaired and written down to her fair value, which approximated her sale proceeds and thus, the 2009 results were not materially affected. The vessel was delivered to her new owners on March 16, 2009. Following the sale of the vessel, the Company repaid an amount of $4.6 million of its loan with Nordea Bank.
Vessels new fixtures
On April 16, 2009 the M/V Sandra, a Capesize vessel of 180,274 dwt built in 2008, terminated her existing time charter. The Company received approximately $2.0 million as compensation for the early termination and entered into a new charter at a daily rate of $32,000 expiring in September 2010. A second charter on the vessel has been fixed commencing upon completion of her current charter and through February 2016 at a daily base rate of $25,000, with 50% profit sharing based on the monthly AV4 BCI charter rate as published by the Baltic Exchange.
On June 8, 2009 the M/V Birthday, a Panamax vessel of 71,504 dwt built in 1993, began a new time charter for a period of 12-14 months at a daily rate of $16,500. On June 10, 2009 the M/V Barbara, a Panamax vessel of 73,307 dwt built in 1997, began a new time charter for a period of 12-14 months at a daily rate of $23,000. On June 22, 2009 the M/V Powerful, a Panamax vessel of 70,083 dwt built in 1994, began a new time charter for a period of 6-8 months at a daily rate of $20,500.
Time Charter Coverage
As of today, we have secured under time charter employment 66% of our operating days for the second half of 2009 and 53% for 2010.
Management Commentary:
Lefteris Papatrifon, Chief Financial Officer of Excel, stated, “We are very pleased with our financial and operating performance for the second quarter of 2009, given the prevailing market conditions. As we had anticipated earlier in the year, global economic conditions, which directly affected our sector, have started improving since the first quarter of this year. Our strategy of enhancing the stability of our cash flows by gradually fixing our vessels under charters at the proper time has continued to benefit us. We have not only maintained but we even improved our operating revenues and profitability, as depicted by the second quarter 2009 EBITDA of $57.3 million as compared to the first quarter 2009 EBITDA of $53.3 million. The recent further improvement of the economic sentiment in the US and China, as evidenced by various economic indicators and future market expectations, allows us to be cautiously optimistic for the future. We will continue implementing our strategy, which we expect will allow us to continue managing current market volatility while at the same time being able to take advantage of any opportunities presented to us.”
Second Quarter 2009 Results:
The Company reported net income for the quarter of $78.0 million or $1.05 per weighted average diluted share as compared to net income of $123.6 million or $3.06 per weighted average diluted share for the second quarter of 2008.
The results for the second quarters of 2009 and 2008 include non-cash items of $14.3 million and $22.8 million, respectively relating to the unrealized gain from the valuation of interest rate swaps. Net income, excluding the above items, for the second quarter of 2009 would amount to $63.7 million or $0.86 per weighted average diluted share compared to respective income for the second quarter of 2008 of $100.8 million or $2.50 per weighted average diluted share.
Included in the above adjusted net income are also the amortization of favorable and unfavorable time charters that were fair valued upon acquiring Quintana Maritime Limited (“Quintana”) on April 15, 2008 amounting to a net income of $65.3 million ($0.88 per weighted average diluted share) and $65.0 million ($1.61 per weighted average diluted share) for the second quarters of 2009 and 2008, respectively and the amortization of stock based compensation expense of $3.0 million and $2.6 million, respectively.
In addition, effective January 1, 2009, we changed the method of accounting for drydocking and special survey costs from the deferral method to the expense as incurred method, as well as, adopted FASB Staff Position APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion” that changed the method of accounting for our Convertible Notes. (Please refer to a subsequent section of this Press Release for a further discussion on these accounting changes). Such changes were effected retrospectively to all periods presented and their effect in the three months to June 30, 2009 was a decrease in net income of approximately $1.3 million or $0.02 per weighted average diluted share in relation to the change in dry-dock and special survey policy and $1.4 million or $0.02 per weighted average diluted share in relation to the change in the accounting for the convertible notes.
Revenues for the second quarter of 2009 amounted to $173.9 million as compared to $205.5 million for the same period in 2008, a decrease of approximately 15.4%. Included in revenues for the second quarters of 2009 and 2008 are $75.3 million and $73.3 million, respectively of non-cash revenues relating to the amortization of unfavorable time charters that were fair valued upon acquiring Quintana.
An average of 47 vessels were operated during the second quarter of 2009 earning a blended average time charter equivalent rate of $22,148 per day compared to $33,325 per day for the second quarter of 2008 earned by an average of 42.2 vessels. Please refer to a subsequent section of this Press Release for a calculation of the TCE.
Adjusted EBITDA for the second quarter of 2009 was $57.3 million compared to $91.0 million for the second quarter of 2008, a decrease of approximately 37.0%. Please refer to a subsequent section of this Press Release for a reconciliation of adjusted EBITDA to Net Income.
Six Months to June 30, 2009:
The Company reported net income for the period of $196.0 million or $3.27 per weighted average diluted share as compared to net income of $158.6 million or $5.28 per weighted average diluted share for the respective period of 2008.
The results for the six-month periods ended June 30, 2009 and 2008 include a noncash item of $21.0 million in both periods relating to the unrealized gain from the valuation of interest rate swaps. Net income for 2009 includes also a non-cash item of $0.1 million relating to the resulting gain from the sale of vessel Swift. Net income, excluding the above items, would amount to $174.9 million or $2.92 per weighted average diluted share for the six month period ended June 30, 2009 compared to $137.6 million or $4.58 per weighted average diluted share for the respective period in 2008.
Included in the above adjusted net income are also the amortization of favorable and unfavorable time charters discussed above and amounting to a net income of $184.6 million ($3.1 per weighted average diluted share) out of which $51.5 million ($0.86 per weighted average diluted share) relate to the accelerate amortization of the time charter value of M/V Sandra and M/V Coal Pride assumed upon Quintana acquisition due to their termination and $65.0 million ($2.2 per weighted average diluted share) for the six-month periods ended June 30, 2009 and 2008, respectively and the amortization of stock based compensation expense of $5.4 million and $2.7 million, respectively.
The effect of the accounting changes discussed above in the six- month period ended June 30, 2009 was a decrease in net income of approximately $3.3 million or $0.06 per weighted average diluted share in relation to the change in dry-dock and special survey policy and $2.8 million or $0.05 per weighted average diluted share in relation to the change in the accounting for the convertible notes.
Revenues for the period amounted to $396.0 million as compared to $275.3 million for the same period in 2008, an increase of approximately 43.8%.
Included in revenues for the six-month periods ended June 30, 2009 and 2008 are $204.4 million and $73.3 million, respectively of non-cash revenues relating to the amortization of unfavorable time charters that were fair valued upon acquiring Quintana.
An average of 47.4 vessels were operated during the six-month period ended June 30, 2009, earning a blended average time charter equivalent (TCE) rate of $21,559 per day compared to $35,786 per day for the six-months period ended June 30, 2008 earned by an average of 30.1 vessels. Please refer to a subsequent section of this Press Release for a calculation of the TCE.
Adjusted EBITDA for the period was $110.5 million compared to $143.0 million for the respective period of 2008, a decrease of approximately 22.7%. Please refer to a subsequent section of this Press Release for a reconciliation of adjusted EBITDA to Net Income.
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. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 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