Seanergy Maritime Holdings Corp. Reports Financial Results for the First Quarter Ended March 31, 2010
June 3, 2010 - Athens, Greece - Seanergy Maritime Holdings Corp. (the “Company”) (NASDAQ: SHIP;
SHIP.W) announced today its operating results for the first quarter ended March 31, 2010.
First Quarter 2010 Highlights
- Net Revenues of $18.2 million
- Fleet of 11 vessels earning a daily TCE rate of $18,314
- EBITDA of $8.9 million
- Operating Income of $5.2 million
- Net Income of $0.1 million, or $0.002 per basic and diluted share
In the first quarter 2010 we completed a public offering of our common stock resulting in approximately $30.0 million in proceeds, which expanded our shareholder base and enhanced the liquidity of our common stock. The offering also strengthened our cash position and our ability to pursue fleet expansion opportunities. We are pleased to announce the completion of the MCS acquisition on schedule. We view this as a strategic and transformational acquisition for Seanergy. It increases our controlled fleet to the significant size of 20 vessels while decreasing the average fleet age, and we believe it expands our revenue and profit generation capacity.
We believe that the acquisition of MCS is accretive to our shareholders. The purchase price for the 51% ownership interest in MCS was $33.0 million and the projected adjusted EBITDA from the MCS contribution is estimated to be $23.0 million for the remainder of 2010 and $40.0 million for 2011 implying a purchase price to EBITDA multiple of 1.6 times on an annualized basis.
In the short period of less than two years as a publicly-traded company, we have more than tripled our controlled fleet from 6 to 20 vessels and quadrupled our deadweight, in our opinion without sacrificing the strength of our balance sheet. We also believe that the timing of the MCS acquisition is optimal, as it enables Seanergy to benefit from the gradual global economic recovery with a larger and younger fleet.
Freight rates continue to remain firm despite an uncertain market place. Currently, congestion at iron ore and coal ports is increasing due to Chinese demand on both products and India’s demand for coal which helps offset the newbuildings coming into the market. We expect the harvest season in the southern hemisphere to help sustain rates although volatility will most likely remain. We continue to remain quietly optimistic on the long term outlook for the dry bulk sector due to the robust growth especially in the Far East region and the gradual global economic recovery.”
Christina Anagnostara, the Company’s Chief Financial Officer, stated: “Our results for the first quarter 2010 correspond to a daily TCE, or time charter equivalent rate, of $18,314. Our cash reserves as of March 31, 2010 were $89.4 million, reflecting $7.4 million in cash generated from operations and approximately $30.0 million from our latest public offering of our common stock which were used for the acquisition of the controlling ownership interest in MCS. The purchase consideration was paid from the proceeds of our recent equity offering and our cash reserves. We believe our strong cash position enables us to meet remaining debt repayments and anticipated capital expenditures in 2010, and we believe our healthy balance sheet allows us to take advantage of market opportunities as they become available.
Following the MCS acquisition, our total assets will be approximately $730 million and our total debt will be approximately $430.8 million. As of June 3, 2010, our cash reserves amount to $84.5 million and the Company now operates a fleet of 20 vessels. On a combined fleet basis, we have secured under period employment 93% of ownership days in 2010, 58% for 2011, 27% for 2012 and 19% for 2013 providing us with significant cash flow visibility. As we welcome MCS as a new subsidiary we believe that this acquisition contributes significant value in the long term and allows our Company to take advantage and exploit market opportunities in Hong Kong and China, access the Chinese capital markets and subsequently expand its asset base revenue and profitability.”
First Quarter 2010 Financial Results
Net Revenues for the three month period ended March 31, 2010 decreased to $18.2 million from $26.2 million in the same quarter in 2009. This is mainly attributable to the lower market imposed time charter rates earned during the three month period ended March 31, 2010 as compared to the same period in 2009.
The Company operated a fleet of 11 vessels on average during the first quarter of 2010, earning a TCE rate of $18,314 as compared to an average of six vessels and TCE rate of $51,831 during the first quarter of 2009. The decrease in TCE reflects the new time charter contracts at prevailing lower market rates.
EBITDA was $8.9 million for the three months ended March 31, 2010 as compared to $21.3 million in the same quarter in 2009. Please refer to a subsequent section of the press release for a reconciliation of net income to EBITDA and operating cash flows to EBITDA.
Operating Income amounted to $5.2 million for the three months ended March 31, 2010, as compared to an Operating Income of $13.6 million for the same quarter in 2009.
Net Income was $0.1 million, or $0.002 per basic and diluted share for the three months ended March 31, 2010, as compared to Net Income of $12.1 million, or $0.54 per basic and $0.50 per diluted share, for the same quarter in 2009, based on weighted average common shares outstanding of 49,347,837 basic and diluted for 2010, 22,361,227, basic, and 24,621,227 diluted, for 2009.
Recent Developments:
Public Offering of 20,833,333 Shares of Common Stock
On January 28, 2010, the Company priced a public offering of 20,833,333 shares of the Company’s common stock. The Company granted the representatives of the underwriters a 45-day option to purchase up to an additional 3,125,000 shares of common stock to cover over-allotments. The shares were offered to the public at $1.20 per share. Four of our major shareholders affiliated with the Restis family purchased an additional 4,166,667 shares of common stock directly from the Company at the public offering price. The offering and the concurrent sale of 4,166,667 shares to entities affiliated with the Restis family settled and closed on February 3, 2010. The net proceeds were approximately $28.0 million. On March 19, 2010, the underwriters exercised the overallotment option to purchase an additional 1,945,000 shares of the Company’s common stock, which resulted in additional net proceeds to the Company of approximately $2.1 million.
Termination of a memorandum of agreement for intended vessel acquisition
On February 8, 2010, the Company announced its termination of a memorandum of agreement for the intended acquisition of a 2009 Capesize vessel, as described in the Company’s prospectus dated January 28, 2010.
MCS acquisition of 51% ownership interest
The Company announced on June 2, 2010 that it had completed the final documentation after entering into a Share and Purchase Agreement with Maritime Capital Shipping (Holdings) Limited, of the British Virgin Islands (“Seller”) for the acquisition of a 51% ownership interest in Maritime Capital Shipping Limited, of Bermuda (“MCS”) for a purchase price of USD 33.0 million. The purchase price was paid to the Seller from the proceeds of the Company’s recent equity offering completed in February 2010 and from the Company’s cash reserves. The Seller, which is controlled by the Restis family, one of the Company’s major shareholders, has retained a 49% ownership interest in MCS.
As a result of the acquisition, the size of the Company’s fleet increased from 11 to 20 dry bulk vessels, consisting of four Capesize, three Panamax, two Supramax, one Handymax and 10 Handysize dry bulk carriers, with a combined cargo-carrying capacity of approximately 1,292,544 dwt and an average fleet age of 12.7 years.
Estimated Drydocking and Maintenance Schedule
The BET Scouter commenced its scheduled drydocking on March 26, 2010, which was completed on May 17, 2010. The total cost of the BET Scouter drydocking amounted to approximately $1.2 million. The BET Prince commenced its scheduled drydocking on May 14, 2010 which is expected to be completed by June 8, 2010. The cost of the BET Prince drydocking is expected to be $0.7 million. Other Matters
On June 2, 2010 the Company executed Addendum No. 3 to its loan agreement with Marfin Bank of Greece, S.A. (“Marfin”) and extended the waiver on its market value to loan covenant from January 1, 2011 through January 3, 2012. In connection with the addendum and extension of the waiver, Marfin made certain changes to the Company’s loan agreement including increasing the interest payable during the waiver period from LIBOR plus 3.00% to LIBOR plus 3.50% in respect of the term loan and from LIBOR plus 3.50% to LIBOR plus 4.00% in respect of the revolving facility and accelerating the due dates of certain of the Company’s principal installments.
Resignation of Board member
Mr. Alexis Komninos has resigned from his position as a member of the Company’s Board of Directors following the termination of the voting agreement among the Company’s founding shareholders and entities affiliated with the Restis family, and due to other professional engagements he has undertaken. The Company wishes Mr. Komninos the best as he takes on new challenges.
Detailed report at: www.seanergymaritime.com
About Seanergy Maritime Holdings Corp.
Seanergy Maritime Holdings Corp., the successor to Seanergy Maritime Corp., is a Marshall Islands corporation with its executive offices in Athens, Greece. The Company is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry bulk carriers.
The Company's initial fleet comprised two Panamax, two Supramax, one Handymax and one Handysize dry bulk carriers that Seanergy purchased and took delivery of in the third and fourth quarters of 2008 from companies associated with members of the Restis family. In August 2009, the Company acquired a controlling interest in Bulk Energy Transport (Holdings) Limited, which owns four Capesize and one Panamax dry bulk carriers. In May 2010, the Company acquired a controlling interest in Maritime Capital Shipping Limited, which owns nine Handysize dry bulk carriers.
The Company's current controlled fleet includes 20 drybulk carriers (four Capesize, three Panamax, two Supramax and one Handymax and 10 Handysize vessels) with a total carrying capacity of approximately 1,292,544 dwt and an average fleet age of 12.7 years.
The Company's common stock and warrants trade on the NASDAQ Global Market under the symbols “SHIP” and “SHIP.W”, respectively.
Seanergy Maritime Corp. press release