Excel Maritime Q1 Results
Excel Maritime Carriers Ltd (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportation services for dry bulk cargoes, announced its operating and financial results for the first quarter ended March 31, 2010.
First Quarter 2010 Highlights: Three Months ended March 31, 2009 2010:
A reconciliation of the non-GAAP measures discussed above is included in a subsequent section of this release.
Pavlos Kanellopoulos, Chief Financial Officer of Excel, stated, “We are pleased to report yet another profitable quarter with increased cash flow generation. We believe that our balanced fleet deployment strategy has allowed us to take advantage of the improving dry bulk market conditions and has resulted in increased EBITDA and operating cash flow compared to the respective period of last year. This has allowed us to repay bank debt, improve the capital structure of the company and secure the required funding for all our capex commitments for 2010. We believe that the performance of the dry bulk market throughout the past five quarters has justified our cautiously optimistic outlook that we have been communicating to our shareholders.”
First Quarter 2010 Corporate Developments New-building Vessels
On March 8, 2010, Christine Shipco LLC paid an amount of $7.3 million to the shipyard, representing the scheduled installment due on the vessel launching. The M/V Christine is a Capesize vessel with a carrying capacity of 180,000dwt and was delivered from the Imabari Shipyard in Japan on April 30, 2010 as mentioned below.
On March 9, 2010, Hope Shipco LLC paid $15.6 million to the shipyard, representing the second installment due on the steel cutting.
New Loan Agreements and Loan Repayment
On February 11, 2010, Hope Shipco LLC entered into a bank loan agreement for the financing of the vessel M/V Hope (to be named M/V Mairaki upon delivery) in the maximum amount of $42.0 million and in any event not more than 75% of the fair value of the vessel upon delivery. The loan will be drawn down in various installments following the vessel’s construction progress through November 2010 and is repayable in twenty quarterly installments and a balloon payment through January 2016. The first installment will be due three months from the vessel delivery.
The first drawdown, amounting to $13.9 million, took place on March 9, 2010 to partially finance the second payment installment to the shipyard upon the steel cutting that has taken place, as provided in the relevant shipbuilding contract. On March 9, 2010, Hope Shipco LLC repaid its then outstanding debt under its previous credit facility amounting to $10.9 million.
Exercise of Warrants
On March 31, 2010, entities affiliated with the family of the Chairman of Excel’s Board of Directors exercised 1,428,572 warrants, being part of the 5,500,000 warrants granted to such entities as part of the loan amendments of March 2009, at a price of $3.50 per warrant to purchase 1,428,572 shares of our class A common stock at a price of $3.50 per warrant. The related proceeds amounted to $5.0 million and were used to repay part of the $1.4 billion Nordea loan facility on April 1, 2010. Based on an amendment to the warrants dated March 26, 2010, Excel granted to the above-mentioned entities a nine month extension until December 31, 2010 in order to exercise the remaining 4,071,428 warrants.
On April 26, 2010, we entered into a bank loan agreement for the post-delivery financing of the vessel M/V Christine in the amount of the lesser of $42.0 million or 65% of the fair value of the vessel MV Christine upon delivery. The loan was drawn down on April 27, 2010. The loan is repayable in 26 quarterly installments and a balloon payment through December 2016. The first installment will be due three months after the drawdown.
On April 30, 2010, the vessel M/V Christine was delivered from the shipyard at a total cost of approximately $72.5 million. On the same date, Christine Shipco LLC’s previous indebtedness in the amount of $25.3 million was fully repaid. The delivery installment and the loan repayment were financed through the loan proceeds of $42.0 million discussed above and contributions made by each partner. The vessel commenced employment as specified below.
Vessels New Fixtures
On February 25, 2010, the M/V Linda Leah, a Panamax vessel of 73,317 dwt built in 1997, was fixed under a new time charter for a period of 12-14 months at a daily rate of $24,000.
On February 26, 2010, the M/V Coal Glory, a Panamax vessel of 73,670 dwt built in 1995, was fixed under a new time charter for a period of 13-16 months at a daily rate of $24,000.
On February 26, 2010, the M/V Coal Pride, a Panamax vessel of 72,493 dwt built in 1999, was fixed under a new time charter for a period of 13-16 months at a daily rate of $24,000.
On March 4, 2010, the M/V Grain Harvester, a Panamax vessel of 76,417 dwt built in 2004, was fixed under a new time charter for a period of 13-15 months at a daily rate of $30,000.
On April 8, 2010, the M/V Fortezza, a Panamax vessel of 69,634 dwt built in 1993, was fixed under a new time charter for a period of 13-16 months at a daily rate of $27,000.
On May 1, 2010, following its delivery from the shipyard, the M/V Christine, a Capesize vessel of 180,000 dwt commenced a period charter until February 2016 at a daily rate of $25,000 plus a 50% profit sharing over the base rate based on the monthly average BCI Time Charter Rate, as published daily by the Baltic Exchange in London.
Time Charter Coverage
As of today, we have secured under time charter employment 63.6% of our operating days for 2010 (Q2-Q4) and 17.3% for the year ending December 31, 2011.
First Quarter 2010 Results:
Excel reported net profit for the quarter of $67.3 million or $0.82 per weighted average diluted share compared to a net profit of $118.0 million or $2.57 per weighted average diluted share in the first quarter of 2009. The first quarter 2010 results include a non-cash unrealized interest-rate swap gain of $0.4 million compared to a non-cash unrealized interest-rate swap gain of $6.7 million in the corresponding period in 2009. The changes in the fair values of interest rate swaps are recorded in income as they do not meet the criteria for hedge accounting. In addition, the first quarter 2009 results include $0.1 million of a noncash gain on sale of a vessel.
Included in the above net income is 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 $58.0 million ($0.71 per weighted average diluted share) and $119.3 million ($2.60 per weighted average diluted share) for the first quarters of 2010 and 2009, respectively. Adjusted net income, excluding all the above items, for the first quarter of 2010 would have amounted to $8.9 million or $0.11 per weighted average diluted share compared to an adjusted net loss, excluding all the above items, for the first quarter of 2009 of $8.1 million or $0.18 per weighted average diluted share. A reconciliation of adjusted Net income to Net Income is included in a subsequent section of this release.
Included in the above adjusted net income is also the amortization of stock based compensation expense of $0.7 million ($0.01 per weighted average diluted share) and $2.4 million ($0.05 per weighted average diluted share), for the quarters ended March 31, 2010 and 2009, respectively.
Voyage revenues for the first quarter of 2010 amounted to $104.2 million as compared to $92.8 million for the same period in 2009, an increase of approximately 12.3%.
An average of 47.0 and 47.8 vessels were operated during the first quarters of 2010 and 2009, respectively, earning a blended average time charter equivalent rate of $24,451 and $21,024 per day, respectively. Please refer to a subsequent section of this Press Release for a calculation of the TCE.
Adjusted EBITDA for the first quarter of 2010 was $62.0 million compared to $53.3 million for the first quarter of 2009, an increase of approximately 16.3%. (Please refer to a subsequent section of this Press Release for a reconciliation of adjusted EBITDA to Net Income)