TOP Ships Inc. (NasdaqGS:TOPS) announced its operating results for the third quarter and nine months ended September 30, 2009. For the third quarter of 2009, the company reported net income of $329,000 or $0.01 per share, compared with net income of $41,640,000 or $1.44 per share, for the third quarter of 2008. Third quarter operating income was $6,672,000 for 2009, compared with operating income of $49,127,000 for the corresponding period in 2008. Revenues for the third quarter of 2009, were $25,153,000 compared to $71,094,000 recorded in the third quarter of 2008.
For the nine months ended September 30, 2009, the Company reported net loss of $14,251,000 or $0.52 per share, compared with net income of $17,210,000 or $0.69 per share, for the nine months ended September 30, 2008. For the nine months ended September 30, 2009, operating loss was $2,473,000 compared with operating income of $53,771,000 for the nine months ended September 30, 2008. Revenues for the nine months ended September 30, 2009, were $83,582,000 compared to $220,418,000 recorded in the nine months ended September 30, 2008.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc., commented: “We are happy to report a profitable quarter despite the current dire market conditions. Our financial results for the third quarter of 2009 include non-recurring charges of $1,386,000 relating to the termination of leases and one-off cash and accelerated stock-based compensation of retiring board members. Excluding these expenses, net income for the third quarter of 2009 would have been $1,715,000 or $0.06 per share.
During the third quarter of 2009 we achieved average TCE rates of $26,777 for the vessels that we operated under time charters and approximately $22,700 for the vessels that we operated under bareboat charters. Given our fixed contracts we expect similar rates to be achieved during the fourth quarter of 2009.
As of September 30, 2009, we were in breach of our loan covenants and we are currently in discussions with all our banks to receive waivers for these breaches and extend existing waivers that were scheduled to expire in 2010, to 2011.”
As of September 30, 2009, we had total indebtedness under senior secured and unsecured credit facilities with our lenders of $407.3 million with maturity dates from 2010 through 2019.
As of the date of this release, we have received waivers and signed amendments to our loan agreements with all five of our lending banks in relation to certain loan covenant breaches that have taken place since December 31, 2008. However, as of September 30, 2009, we were in breach of additional covenants with all of our banks, which have not been previously waived. These breaches relate to EBITDA, our overall cash position (minimum liquidity covenants), adjusted net worth and the asset value cover of our product tankers with certain banks. We expect that our lenders will not demand payment of our loans before their maturity, provided that we pay loan installments and accumulated or accrued interest as they fall due under the existing credit facilities.
If we are unable to obtain covenant waivers or modifications for current covenant breaches or for covenant breaches that may occur in future reporting periods, our lenders may require that we post additional collateral, enhance our equity and liquidity, increase our interest payments or pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels, or they may accelerate our indebtedness, which would impair our ability to continue to conduct our business. In order to further enhance our liquidity, we may find it necessary to sell vessels at a time when vessel prices are low, in which case we will recognize losses and a reduction in earnings, which could affect our ability to raise additional capital necessary to comply with our loan covenants and/or the additional lender requirements described above.