TOP SHIPS REPORTS FOURTH QUARTER AND FISCAL YEAR 2008 FINANCIAL RESULTS

ATHENS, GREECE (April, 2009) … TOP Ships Inc. (NasdaqGS:TOPS) today announced its operating results for the fourth quarter and the fiscal year ended December 31, 2008.

For the three months ended December 31, 2008, the Company reported net income of $8,429,000, or $0.30 per share, compared with net loss of $37,439,000, or $2.67 per share, for the fourth quarter of 2007. The weighted average numbers of common shares used in the computations were 28,090,125 and 14,082,742 for the fourth quarter of 2008 and 2007 , respectively. For the three months ended December 31, 2008, operating income was $7,952,000, compared with operating loss of $25,982,000 for the fourth quarter of 2007. Revenues for the fourth quarter of 2008 were $36,962,000, compared to $51,789,000 recorded in the fourth quarter of 2007.

For the year ended December 31, 2008, the Company reported net income of $25,639,000, or $1.01 per share, compared with net loss of $49,076,000, or $4.09 per share, for the year ended December 31, 2007. The weighted average numbers of common shares used in the computations were 25,445,031 and 11,986,857 for the years ended December 31, 2008 and 20071, respectively. For the year ended December 31, 2008, operating income was $61,723,000, compared with operating loss of $29,118,000 for the year ended December 31, 2007. Revenues for the year ended December 31, 2008 were $257,380,000, compared to $252,259,000 recorded in the year ended December 31, 2007.

Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc., commented:

“The later part of 2008 was very challenging for the shipping industry and the world economy overall. Despite the challenges faced, we achieved another quarter with solid results, which is a product of our successful strategic decisions that were implemented throughout the year. Specifically, during 2008:

- We sold 7 owned suezmax tankers and 1 owned panamax dry bulk vessel for an aggregate sale price of $380.5 million. These sales enhanced our liquidity and created a cash cushion during a period where liquidity is key to the survival of any company.
- We arranged the sale of 6 chartered-in vessels, under bareboat charters, and terminated the respective charters.
- We completed the refinancing of our six new-building product tankers and we chartered all 6 vessels with 3 major charterers at fixed rates for periods that range between 7 and 10 years. These charters have been agreed on a bareboat basis, which not only reduces our long-term market risk relating to the vessels, but also eliminates the Company’s operational risk for that period.
- We took delivery of our dry bulk vessels, which are currently deployed on time charters at premium rates.

Developments during the fourth quarter of 2008 included:

- As of December 31, 2008, the Company was not in compliance with certain loan covenants. We are currently in advanced discussions with our lending banks to receive waivers of the covenants to 2010.
- We terminated an interest rate derivative product for $5.0 million. When we entered into this product in November 2007, we had received an upfront payment of $8.5 million.
- We completed the refinancing for our new-building product tankers, four of which have already been delivered to their bareboat charterers.
- We commenced our share repurchase program, which allows the Company to purchase up to $20.0 million in our shares over period of one year.”

Recent Developments

Our Board of Directors has appointed as of April 1st, 2009 Mr. Alexandros Tsirikos to the position of Chief Financial Officer. Mr. Tsirikos, 34, is a UK qualified Chartered Accountant (ACA) and has been employed with Top Ships since July 2007 as the Company’s Corporate Development Officer. Prior to joining TOP Ships, Mr Tsirikos was a manager with PricewaterhoouseCoopers where he worked for six years. During his career with PwC, Mr. Tsirikos drew experience both from consulting as well as auditing as a member of the PwC Advisory team and Assurance team. As a member of the Advisory team, he lead and participated in numerous projects in the public and the private sectors, involving strategic planning and business modelling, investment analysis and appraisal, feasibility studies, costing and project management. As a member of the Assurance team, Mr. Tsirikos was part of the IFRS (International Financial Reporting Standards) technical team of PwC Greece and lead numerous IFRS conversion projects for listed companies. He holds an MSc in Shipping Trade and Finance from City University of London and a Bachelor’s Degree with honours in Business Administration from Boston University in the United States. He speaks English, French and Greek.

Fleet Report:

As of December 31, 2008, the Company’s fleet consisted of 12 vessels, or 0.6 million dwt (including 7 owned and 5 vessels sold and leased back for a period of 5 to 7 years) as compared to 23 vessels, or 2.2 million dwt (including 11 vessels sold and leased back for a period of 5 to 7 years) on December 31, 2007.

The Company’s fleet size and composition remained unchanged during the fourth quarter of 2008.

Fleet Deployment:

During the fourth quarter of 2008, the Company had 100% of the fleet’s operating days on long-term employment contracts. As of December 31, 2008, all of the Company’s 12 vessels were on time charter contracts with an average term of 1.7 years with all but four of the time charters including profit sharing agreements, and one vessel under bareboat charter with a term of over three years.

Tanker Vessels:

All of the Company’s Handymax tankers operate under long-term employment agreements that provide for a base rate and additional profit sharing.

During the fourth quarter of 2008, the Company’s Handymax tankers earned on average $18,998 per vessel per day on a time charter equivalent (TCE) basis, including profit-sharing allocated to the Company.

Drybulk Vessels:

During the fourth quarter of 2008, four of the Company’s drybulk vessels operated under time charter contracts and one under bareboat charter, earning on average $53,070 per vessel per day on a time charter equivalent (TCE) basis, including the amortization of the fair value of time charter contracts of $14,492 per vessel per day.

Liquidity and Capital Resources

Since the Company’s formation, the sources of funds have been cash from operations, long-term borrowings and equity provided by the shareholders. The Company’s principal use of funds has been capital expenditures to establish and grow its fleet, maintain the quality of its vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and make principal repayments on outstanding served loan facilities. The Company expects to rely upon operating cash flows, long-term borrowings and equity financings to implement its future growth plan.

As of December 31, 2008, the Company had total indebtedness under senior secured credit facilities of $346.9 million (excluding unamortized financing fees of $4.4 million) with its lenders, the Royal Bank of Scotland (“RBS”), HSH Nordbank (“HSH”), DVB Bank (“DVB”), Alpha Bank (“ALPHA”) and Emporiki Bank (“EMPORIKI”), maturing from 2013 through 2019.

The Company’s unencumbered cash as of December 31, 2008 was $46.2 million.

As of December 31, 2008, the Company had three interest rate swap agreements with RBS for the amounts of $25.4 million, $10.0 million and $10.0 million for a remaining period of one, five and five years, respectively. Under these agreements the interest rate is fixed at an effective annual rate of 4.66% (in addition to the applicable margin), 4.23% and 4.11%, respectively. The Company also had one interest rate swap agreement with Egnatia Bank for the amount of $10.0 million for a remaining period of five years, respectively. Under this agreement the interest rate is fixed at an effective annual rate of 4.76%. In addition, the Company had seven interest rate swap agreements with HSH, six of them for the amounts of $11.2 million, $11.2 million, $11.2 million, $15.1 million, $7.4 million and $13.4 million, for a remaining period of three, three, three, five, five and seven years, respectively, and a forward interest rate swap agreement with HSH for the amount of $15.1 million effective in June 2010 for a period of four years, at a fixed interest rate of 4.73% in addition to the applicable margin. The above swaps of $10.0 million and $10.0 million with RBS and $10.0 million with Egnatia Bank include steepening terms based on the two and 10 year U.S. Dollar swap difference, which is calculated quarterly in arrears. The interest rate for the remaining balance of the loans is LIBOR, plus the margin.

Loan Covenants and Discussions with Banks

As at December 31, 2008, the Company was not in compliance with certain of its loan covenants.

As of the date of this release, the Company is in advanced discussions with all its lenders in order to receive waivers for such non-compliance, extending until the end of March 2010, but no definitive agreement has been signed yet. In order to receive waivers, the Company may have to amend certain terms of its existing financing agreements.

Because definitive agreements with respect to such waivers have not yet been signed, the Company currently cannot provide a breakdown of its debt and swap facilities into current and long term as such a breakdown is directly related to the status of the covenants.

If the Company receives waivers for more than one year from all its lenders then the debt and swap facilities would be split into current and long term portions based on when the installments fall due. If the Company cannot obtain covenant waivers from all of its lenders, all loans would need to be categorized as current as a result of cross default covenants attached to all loan agreements.

If the Company is not able to obtain covenant waivers or modifications, its lenders may require the Company to post additional collateral, enhance its equity and liquidity, increase its interest payments or pay down its indebtedness to a level where it is in compliance with its loan covenants, sell vessels, or they may accelerate its indebtedness, which would impair its ability to continue to conduct its business. In order to further enhance its liquidity, the Company may find it necessary to sell vessels at a time when vessel prices are low, in which case it will recognize losses and a reduction in its earnings, which could affect its ability to raise additional capital necessary for the Company to comply with its loan covenants and/or the additional lender requirements described above.

About TOP Ships Inc.

TOP Ships Inc., formerly known as TOP Tankers Inc., is an international provider of worldwide seaborne crude oil and petroleum products and drybulk transportation services. The Company operates a combined tanker and drybulk fleet as follows:

• A fleet of eleven double-hull handymax tankers, with a total carrying capacity of approximately 0.5 million dwt, of which 74% are sister ships. Seven of the Company's handymaxes are on time charter contracts with an average term of
one year with all of the time charters including profit sharing agreements above their base rates. Four of the Company’s handymax tankers are fixed on a bareboat charter basis with an average term of eight and a half years.
• Two newbuilding product tankers, which are expected to be delivered in the first half of 2009. All the expected newbuildings have fixed rate bareboat employment agreements for a period of ten years.
• A fleet of five drybulk vessels with a total carrying capacity of approximately 0.3 million dwt, of which 47% are sister ships. All of the Company's drybulk vessels have fixed rate employment contracts for an average period of 24 months.

Top Ships Press Release