[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[
]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Republic
of the Marshall Islands
|
98–0453513
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
477
Madison Avenue
New
York, New York 10022
(Address
of principal executive offices)(Zip
Code)
|
TABLE OF
CONTENTS
|
||
Page
|
||
PART
I
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Financial
Statements
|
|
Consolidated
Balance Sheets as of September 30, 2009 (unaudited) and
December
31,
2008
|
3
|
|
Consolidated
Statements of Operations (unaudited) for the three and nine months ended
September 30, 2009 and 2008
|
4
|
|
Consolidated
Statement of Stockholders' Equity (unaudited) for the nine months ended
September 30, 2009
|
5
|
|
Consolidated
Statements of Cash Flows (unaudited) for the nine months
ended September 30, 2009 and 2008
|
6
|
|
Notes to Consolidated Financial Statements (unaudited)
|
7
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition
and
Results of
Operations
|
16
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risks
|
29
|
Item
4.
|
Controls
and Procedures
|
29
|
PART
II
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
30
|
Item
1A.
|
Risk
Factors
|
30
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
30
|
Item
3.
|
Defaults
upon Senior Securities
|
30
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
30
|
Item
5.
|
Other
Information
|
30
|
Item
6.
|
Exhibits
|
30
|
Signatures
|
31
|
|
September 30, 2009
|
December 31, 2008
|
|||||||
ASSETS:
|
(Unaudited)
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 82,544,467 | $ | 9,208,862 | ||||
Accounts
receivable
|
5,825,416 | 4,357,837 | ||||||
Prepaid
expenses
|
5,348,972 | 3,297,801 | ||||||
Total current
assets
|
93,718,855 | 16,864,500 | ||||||
Noncurrent
assets:
|
||||||||
Vessels
and vessel improvements, at cost, net of accumulated
depreciation
of $114,516,274 and $84,113,047, respectively
|
919,565,338 | 874,674,636 | ||||||
Advances
for vessel construction
|
483,414,622 | 411,063,011 | ||||||
Other
fixed assets, net of accumulated amortization of $25,755
and $4,556, respectively
|
283,895 | 219,245 | ||||||
Restricted
cash
|
12,776,056 | 11,776,056 | ||||||
Deferred
drydock costs
|
4,805,679 | 3,737,386 | ||||||
Deferred
financing costs
|
22,012,037 | 24,270,060 | ||||||
Fair
value above contract value of time charters acquired
|
4,531,115 | 4,531,115 | ||||||
Fair
value of derivative instruments
|
5,984,686 | 15,039,535 | ||||||
Total
noncurrent assets
|
1,453,373,428 | 1,345,311,044 | ||||||
Total
assets
|
$ | 1,547,092,283 | $ | 1,362,175,544 | ||||
LIABILITIES
& STOCKHOLDERS' EQUITY
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 1,402,289 | $ | 2,037,060 | ||||
Accrued
interest
|
7,717,705 | 7,523,057 | ||||||
Other
accrued liabilities
|
10,473,346 | 3,021,975 | ||||||
Deferred
revenue and fair value below contract value of time charters
acquired
|
8,570,051 | 2,863,184 | ||||||
Unearned
charter hire revenue
|
5,754,126 | 5,958,833 | ||||||
Total
current liabilities
|
33,917,517 | 21,404,109 | ||||||
Noncurrent
liabilities:
|
||||||||
Long-term
debt
|
836,725,880 | 789,601,403 | ||||||
Fair
value below contract value of time charters acquired
|
25,050,597 | 29,205,196 | ||||||
Fair
value of derivative instruments
|
41,365,655 | 50,538,060 | ||||||
Total
noncurrent liabilities
|
903,142,132 | 869,344,659 | ||||||
Total
liabilities
|
937,059,649 | 890,748,768 | ||||||
Commitment
and contingencies
|
||||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, $.01 par value, 25,000,000 shares authorized, none
issued
|
— | — | ||||||
Common
shares, $.01 par value, 100,000,000 shares authorized, 61,986,777 and
47,031,300 shares issued and outstanding
|
619,868 | 470,313 | ||||||
Additional
paid-in capital
|
721,483,816 | 614,241,646 | ||||||
Retained
earnings (net of dividends declared of $262,188,388)
|
(76,690,081 | ) | (107,786,658 | ) | ||||
Accumulated
other comprehensive loss
|
(35,380,969 | ) | (35,498,525 | ) | ||||
Total
stockholders' equity
|
610,032,634 | 471,426,776 | ||||||
Total
liabilities and stockholders' equity
|
$ | 1,547,092,283 | $ | 1,362,175,544 | ||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30, 2009
|
September 30, 2008
|
September 30, 2009
|
September 30, 2008
|
|||||||||||||
Revenues,
net of Commissions
|
$ | 41,551,805 | $ | 51,553,232 | $ | 150,550,809 | $ | 125,462,448 | ||||||||
Vessel
Expenses
|
11,493,889 | 9,344,348 | 37,498,893 | 24,932,088 | ||||||||||||
Depreciation
and Amortization
|
11,094,238 | 8,991,877 | 32,328,402 | 23,718,898 | ||||||||||||
General
and Administrative Expenses
|
7,839,942 | 6,666,748 | 25,784,155 | 16,478,840 | ||||||||||||
Total
Operating Expenses
|
30,428,069 | 25,002,973 | 95,611,450 | 65,129,826 | ||||||||||||
Operating
Income
|
11,123,736 | 26,550,259 | 54,939,359 | 60,332,622 | ||||||||||||
Interest
Expense
|
7,294,151 | 3,714,458 | 20,596,321 | 10,513,928 | ||||||||||||
Interest
Income
|
(65,965 | ) | (385,816 | ) | (136,828 | ) | (2,654,863 | ) | ||||||||
Write-off
of Deferred Financing Costs
|
3,383,289 | — | 3,383,289 | — | ||||||||||||
Net
Interest Expense
|
10,611,475 | 3,328,642 | 23,842,782 | 7,859,065 | ||||||||||||
Net
Income
|
$ | 512,261 | $ | 23,221,617 | $ | 31,096,577 | $ | 52,473,557 | ||||||||
Weighted
Average Shares Outstanding :
|
||||||||||||||||
Basic
|
61,976,794 | 46,770,486 | 53,808,348 | 46,762,092 | ||||||||||||
Diluted
|
61,986,752 | 47,066,254 | 53,831,913 | 47,062,811 | ||||||||||||
Per
Share Amounts:
|
||||||||||||||||
Basic
Net Income
|
$ | 0.01 | $ | 0.50 | $ | 0.58 | $ | 1.12 | ||||||||
Diluted
Net Income
|
$ | 0.01 | $ | 0.49 | $ | 0.58 | $ | 1.11 | ||||||||
Cash
Dividends Declared and Paid
|
— | $ | 0.50 | — | $ | 1.50 | ||||||||||
Common
Shares
|
Common
Shares
Amount
|
Additional
Paid-In
Capital
|
Net Income
|
Accumulated
Deficit
|
Other Comprehensive Income
(Loss
|
Total Stockholders' Equity
|
||||||||||||||||||||||
Balance
at December 31, 2008
|
47,031,300 | $ | 470,313 | $ | 614,241,646 | $ | (107,786,658 | ) | $ | (35,498,525 | ) | $ | 471,426,776 | |||||||||||||||
Comprehensive
income :
|
||||||||||||||||||||||||||||
Net
income
|
— | — | — | $ | 31,096,577 | 31,096,577 | — | 31,096,577 | ||||||||||||||||||||
Net
unrealized gain on derivatives
|
— | — | — | — | — | 117,556 | 117,556 | |||||||||||||||||||||
Comprehensive
income
|
— | — | — | — | — | — | 502,640,909 | |||||||||||||||||||||
Issuance
of common shares, net of issuance costs
|
14,847,493 | 148,475 | 97,142,571 | — | 97,291,046 | |||||||||||||||||||||||
Issuance
of restricted shares
|
107,984 | 1,080 | (487,551 | ) | — | — | — | (486,471 | ) | |||||||||||||||||||
Non-cash
compensation
|
— | — | 10,587,150 | — | — | — | 10,587,150 | |||||||||||||||||||||
Balance
at September 30, 2009
|
61,986,777 | $ | 619,868 | $ | 721,483,816 | $ | (76,690,081 | ) | $ | (35,380,969 | ) | $ | 610,032,634 | |||||||||||||||
Nine
Months Ended
|
||||||||
|
September 30, 2009
|
September 30, 2008
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 31,096,577 | $ | 52,473,557 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Items
included in net income not affecting cash flows:
|
||||||||
Depreciation
and amortization
|
30,424,426 | 21,816,618 | ||||||
Amortization
of deferred drydocking costs
|
1,903,976 | 1,902,280 | ||||||
Amortization
of deferred financing costs
|
881,728 | 185,508 | ||||||
Amortization
of fair value below contract value of time charters acquired
|
(1,942,278 | ) | (264,053 | ) | ||||
Write-off
of Deferred Financing Costs
|
3,383,289 | — | ||||||
Non-cash
compensation expense
|
10,587,150 | 7,766,452 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(1,467,579 | ) | (489,213 | ) | ||||
Prepaid
expenses
|
(2,051,171 | ) | (2,409,563 | ) | ||||
Accounts
payable
|
(634,771 | ) | (3,288,849 | ) | ||||
Accrued
interest
|
644,354 | 573,342 | ||||||
Accrued
expenses
|
7,025,387 | 1,056,589 | ||||||
Drydocking
expenditures
|
(2,546,285 | ) | (1,701,042 | ) | ||||
Deferred
revenue
|
3,494,546 | — | ||||||
Unearned
charter hire revenue
|
(204,707 | ) | 3,971,645 | |||||
Net
cash provided by operating activities
|
80,594,642 | 81,593,271 | ||||||
Cash
flows from investing activities:
|
||||||||
Vessels
and vessel improvements and advances for vessel construction
|
(145,771,439 | ) | (273,766,850 | ) | ||||
Purchase
of other assets
|
(85,849 | ) | (120,723 | ) | ||||
Net
cash used in investing activities
|
(145,857,288 | ) | (273,887,573 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Issuance
of Common Stock
|
99,999,997 | — | ||||||
Proceeds
from exercise of stock options
|
— | 237,327 | ||||||
Equity
issuance costs
|
(2,708,951 | ) | — | |||||
Bank
borrowings
|
95,770,000 | 144,724,967 | ||||||
Repayment
of bank debt
|
(48,645,523 | ) | — | |||||
Changes
in restricted cash
|
(1,000,000 | ) | (1,651,440 | ) | ||||
Deferred
financing costs
|
(4,330,801 | ) | (786,811 | ) | ||||
Cash
used to settle net share equity awards
|
(486,471 | ) | — | |||||
Cash
dividends
|
— | (70,149,063 | ) | |||||
Net cash provided by financing
activities
|
138,598,251 | 72,374,980 | ||||||
Net
increase/(decrease) in cash
|
73,335,605 | (119,919,322 | ) | |||||
Cash
at beginning of period
|
9,208,862 | 152,903,692 | ||||||
Cash
at end of period
|
$ | 82,544,467 | $ | 32,984,370 | ||||
No. of Vessels
|
Dwt
|
Vessel Type
|
Delivery
|
Employment
|
Vessels in Operation
|
||||
25
Vessels
|
1,296,917
|
22
Supramax
|
Time
Charter
|
|
3
Handymax
|
Time
Charter
|
|||
Vessels to be delivered
|
||||
3
Vessels
|
159,300
|
53,100
dwt series
Supramax
|
2009-2010
|
2
Vessels on Time Charter and 1 Vessel Charter Free
|
2
Vessels
|
112,000
|
56,000
dwt series
Supramax
|
2010
|
2
Vessels Charter Free
|
17
Vessels
|
986,000
|
58,000
dwt series
Supramax
|
2009-2011
|
17
Vessels on Time Charter
|
%
of Consolidated Time Charter Revenue
|
||||
Three
Months Ended
|
Nine
Months Ended
|
|||
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|
Charterer
|
||||
Charterer
B
|
13%
|
22%
|
16%
|
25%
|
Charterer
H
|
16%
|
14%
|
13%
|
16%
|
Charterer
L
|
—
|
18%
|
14%
|
19%
|
Charterer
M
|
17%
|
12%
|
18%
|
12%
|
Charterer
P
|
—
|
10%
|
—
|
—
|
Vessels
and Vessel Improvements, at December 31, 2008
|
$ | 874,674,636 | ||
Purchase
of Vessel and Vessel Improvements
|
3,384,485 | |||
Delivery
of Newbuild Vessels
|
71,909,444 | |||
Depreciation
Expense
|
(30,403,227 | ) | ||
Vessels
and Vessel Improvements, at September 30, 2009
|
$ | 919,565,338 | ||
Advances
for Vessel Construction, at December 31, 2008
|
$
411,063,011
|
|
Progress
Payments
|
117,330,996
|
|
Capitalized
Interest
|
20,895,336
|
|
Legal
and Technical Supervision Costs
|
6,034,723
|
|
Delivery
of Newbuild Vessels
|
(71,909,444)
|
|
Advances
for Vessel Construction, at September 30, 2009
|
$
483,414,622
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|||||||||||||
Loan
Interest
|
$ | 6,921,937 | $ | 3,652,171 | $ | 19,714,593 | $ | 10,328,420 | ||||||||
Amortization
of Deferred Financing Costs
|
372,214 | 62,287 | 881,728 | 185,508 | ||||||||||||
Write-off
of Deferred Financing Costs
|
3,383,289 | — | 3,383,289 | — | ||||||||||||
Total
Interest Expense
|
$ | 10,677,440 | $ | 3,714,458 | $ | 23,979,610 | $ | 10,513,928 |
Notional
Amount
Outstanding
–
September
30, 2009
|
Notional
Amount
Outstanding
–
December
31, 2008
|
Fixed
Rate
|
Maturity
|
|||||||||||
$ | 84,800,000 | $ | 84,800,000 | 3.900 | % | 09/2013 | ||||||||
25,776,443 | 25,776,443 | 4.905 | % | 03/2010 | ||||||||||
10,995,000 | 10,995,000 | 4.980 | % | 08/2010 | ||||||||||
202,340,000 | 202,340,000 | 5.040 | % | 08/2010 | ||||||||||
100,000,000 | 100,000,000 | 4.220 | % | 09/2010 | ||||||||||
30,000,000 | 30,000,000 | 4.538 | % | 09/2010 | ||||||||||
25,048,118 | 25,048,118 | 4.740 | % | 12/2011 | ||||||||||
36,752,038 | 36,752,038 | 5.225 | % | 08/2012 | ||||||||||
81,500,000 | 81,500,000 | 3.895 | % | 01/2013 | ||||||||||
144,700,000 | 144,700,000 | 3.580 | % | 10/2011 | ||||||||||
9,162,500 | 9,162,500 | 3.515 | % | 10/2011 | ||||||||||
3,405,174 | 3,405,174 | 3.550 | % | 10/2011 | ||||||||||
17,050,000 | 17,050,000 | 3.160 | % | 11/2011 | ||||||||||
$ | 771,529,273 | $ | 771,529,273 | |||||||||||
Level
1
|
Level
2
|
Level
3
|
|||||||||||
Assets
|
|||||||||||||
Foreign
currency contracts
|
— | $ | 5,984,686 | — | |||||||||
Liabilities
|
Interest
rate contracts
|
— | $ | 41,365,655 | — | ||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|||||||||||||
Net
Income
|
$ | 512,261 | $ | 23,221,617 | $ | 31,096,577 | $ | 52,473,557 | ||||||||
Weighted
Average Shares – Basic
|
61,976,794 | 46,770,486 | 53,808,348 | 46,762,092 | ||||||||||||
Dilutive
effect of stock options and restricted stock units
|
9,958 | 295,768 | 23,565 | 300,719 | ||||||||||||
Weighted
Average Shares – Diluted
|
61,986,752 | 47,066,254 | 53,831,913 | 47,062,811 | ||||||||||||
Basic
Earnings Per Share
|
$ | 0.01 | $ | 0.50 | $ | 0.58 | $ | 1.12 | ||||||||
Diluted
Earnings Per Share
|
$ | 0.01 | $ | 0.49 | $ | 0.58 | $ | 1.11 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|||||||||||||
Stock
Option Plans
|
$ | 75,370 | $ | 62,851 | $ | 776,960 | $ | 226,108 | ||||||||
Restricted
Stock Grants
|
3,270,063 | 3,131,658 | 9,810,190 | 6,931,944 | ||||||||||||
Stock
Grants
|
— | — | — | 608,400 | ||||||||||||
Total
Non-cash compensation expense
|
$ | 3,345,433 | $ | 3,194,509 | $ | 10,587,150 | $ | 7,766,452 |
|
(1)
|
concentration
in one vessel category: Supramax class of Handymax dry bulk vessels, which
we believe offer size, operational and geographical advantages (over
Panamax and Capesize vessels),
|
|
(2)
|
our
strategy is to charter our vessels primarily pursuant to one- to
three-year time charters to allow us to take advantage of the stable cash
flow and high utilization rates that are associated with medium to
long-term time charters. On the other hand, time charters provide a
shipping company with a predictable level of revenues. We have entered
into time charters for substantially all of our vessels in our operating
fleet which range in length from approximately one to three years, and in
the case of many of our newbuilding vessels for periods up to December
2018. Our time charters provide for fixed semi-monthly payments in
advance. We believe this strategy is effective in strong and weak dry bulk
markets, giving us security and predictability of cashflows when we look
at the volatility of the shipping
markets,
|
|
(3)
|
maintain
high quality vessels and improve standards of operation through improved
environmental procedures, crew training and maintenance and repair
procedures, and
|
|
(4)
|
maintain
a balance between purchasing vessels as market conditions and
opportunities arise and maintaining prudent financial ratios (e.g.
leverage ratio).
|
Vessel
|
Year Built
|
Dwt
|
Time Charter Expiration (1)
|
Daily
Time
Charter Hire Rate
|
Cardinal
(2)
|
2004
|
55,362
|
September
2010 to November 2010
|
$16,250
|
Condor
|
2001
|
50,296
|
May
2010 to July 2010
|
$22,000
|
Falcon
|
2001
|
51,268
|
April
2010 to June 2010
|
$39,500
|
Griffon
|
1995
|
46,635
|
February
2010 to May 2010
|
$9,500
|
Harrier
|
2001
|
50,296
|
April
2010 to June 2010
|
$13,500
|
Hawk
I
|
2001
|
50,296
|
May
2010 to August 2010
|
$13,000
|
Heron
(3)
|
2001
|
52,827
|
January
2011 to May 2011
|
$26,375
|
Jaeger
(4)
|
2004
|
52,248
|
October
2009 to January 2010
|
$10,100
|
Kestrel
I
|
2004
|
50,326
|
March
2010 to July 2010
|
$11,500
|
Kite
(5)
|
1997
|
47,195
|
September
2009 to January 2010
|
$9,500
|
Merlin
(6)
|
2001
|
50,296
|
December
2010 to March 2011
|
$25,000
|
Osprey
I
|
2002
|
50,206
|
October
2009 to December 2009
|
$25,000
|
Peregrine
(7)
|
2001
|
50,913
|
January
2010
Jan
2010 to Jan 2011/Mar 2011
|
$8,500
$10,500
(with Index
share)
|
Sparrow
(8)
|
2000
|
48,225
|
February
2010 to May 2010
|
$10,000
|
Tern
|
2003
|
50,200
|
December
2009 to March 2010
|
$8,500
|
Shrike
|
2003
|
53,343
|
May
2010 to August 2010
|
$25,600
|
Skua
(9)
|
2003
|
53,350
|
September
2010 to November 2010
|
Index
|
Kittiwake
(10)
|
2002
|
53,146
|
June
2010 to September 2010
|
Index
|
Goldeneye
(11)
|
2002
|
52,421
|
May
2010 to July 2010
|
Index
|
Wren
(12)
|
2008
|
53,349
|
Feb
2012
Feb
2012 to Dec 2018/Apr 2019
|
$24,750
$18,000
(with profit
share)
|
Redwing
(13)
|
2007
|
53,411
|
August
2010 to October 2010
|
Index
|
Woodstar
(14)
|
2008
|
53,390
|
Jan
2014
Jan
2014 to Dec 2018/Apr 2019
|
$18,300
$18,000
(with profit
share)
|
Crowned
Eagle
|
2008
|
55,940
|
September
2009 to December 2009
|
$16,000
|
Crested
Eagle (15)
|
2009
|
55,989
|
December
2009 to March 2010
|
$10,500
|
Stellar
Eagle
|
2009
|
55,989
|
February
2010 to May 2010
|
$12,000
|
(1) |
The
date range provided represents the earliest and latest date on which the
charterer may redeliver the vessel to the Company upon the termination of
the charter. The time charter hire rates presented are gross daily charter
rates before brokerage commissions, ranging from 1.25% to 6.25%, to third
party ship brokers.
|
|
(2) | Upon conclusion of the previous charter in September 2009, the CARDINAL commenced a new one year charter at $16,250 per day. | |
(3) |
The
charterer of the HERON has an option to extend the charter period by 11 to
13 months at a time charter rate of $27,375 per day. The charterer has a
second option for a further 11 to 13 months at a time charter rate of
$28,375 per day.
|
|
(4) |
In
December 2008, the JAEGER commenced a charter for one year at an average
daily rate of approximately $10,100 based on a charter rate of $5,000 per
day for the first 50 days and $11,000 per day for the balance of the year.
Revenue recognition is based on an average daily rate of
$10,100.
|
|
(5) |
In
March 2009, the charterer of the KITE paid in advance for the duration of
the charter an amount equal to the difference between the prevailing daily
charter rate of $21,000 and a new rate of $9,500 per day. This amount has
been recorded in Deferred Revenue in the Company's financial statements
and has been recognized into revenue ratably until September
2009.
|
|
(6) |
The
daily rate for the MERLIN is $27,000 for the first year, $25,000 for the
second year and $23,000 for the third year. Revenue recognition is based
on an average daily rate of $25,000.
|
|
(7) |
The
charterer of the PEREGRINE has exercised the option to extend the charter
period by 11 to 13 months. The rate for the option period is index based
with a minimum daily time charter rate of $10,500 and a profit share which
is equal to 50% of the difference between the base rate and the average of
the trailing Baltic Supramax Index for each 30 day hire
period.
|
|
(8)
|
In
March 2009, the charterer of the SPARROW paid in advance for the duration
of the charter an amount equal to the difference between the prevailing
daily charter rate of $34,500 and a new rate of $10,000 per day. This
amount has been recorded in Deferred Revenue in the Company's financial
statements and is being recognized into revenue ratably over the charter
period such that the daily charter rate remains effectively $34,500 per
day. The cash payment received by the Company has been adjusted by a
present value interest rate factor of
3%.
|
(9) |
Upon
conclusion of the previous time charter in August 2009, the SKUA commenced
an index based one year charter with a minimum rate of $8,500 per day. The
index rate will be an average of the trailing Baltic Supramax Index for
each 15 day hire period. For the first 45 days of the charter the index
rate will be a maximum of $19,000 per day.
|
|
(10) |
Upon
conclusion of the previous time charter, in July 2009, the KITTIWAKE
performed a short term charter at $18,000 per day and then entered into
another short term time charter at $25,000 per day. Subsequently, in
October 2009, the KITTIWAKE will enter into an index based charter for one
year with a minimum rate of $8,500 per day. The index rate will be an
average of the trailing Baltic Supramax Index for each 15 day hire period.
For the first 45 days of the charter the index rate will be a maximum of
$19,000 per day.
|
|
(11) |
Upon
conclusion of the previous time charter, in September 2009, the GOLDENEYE
commenced an index based one year charter with a minimum rate of $8,500
per day. The index rate will be an average of the trailing Baltic Supramax
Index for each 15 day hire period. For the first 50 days of the charter
the index rate is $15,000 per day.
|
|
(12) |
The
WREN has entered into a long-term charter. The charter rate until February
2012 is $24,750 per day. Subsequently, the charter until redelivery in
December 2018 to April 2019 will be profit share based. The base charter
rate will be $18,000 with a 50% profit share for earned rates over $22,000
per day. Revenue recognition for the base rate from commencement of the
charter is based on an average daily base rate of
$20,306.
|
|
(13) |
Upon
conclusion of the previous time charter in August 2009, the REDWING
commenced an index based one year charter with a minimum rate of $8,500
per day. The index rate will be an average of the trailing Baltic Supramax
Index for each 15 day hire period. For the first 45 days of the charter
the index rate will be a maximum of $19,000 per day.
|
|
(14) |
The
WOODSTAR has entered into a long-term charter. The charter rate until
January 2014 is $18,300 per day. Subsequently, the charter until
redelivery in December 2018 to April 2019 will be profit share based. The
base charter rate will be $18,000 with a 50% profit share for earned rates
over $22,000 per day. Revenue recognition for the base rate from
commencement of the charter is based on an average daily base rate of
$18,152.
|
|
(15) |
The
charterer of the CRESTED EAGLE has an option to extend the charter period
by 11 to 13 months at a base time charter rate of $11,500 plus 50% of the
difference between the base rate and the BSI time charter average
(provided the BSI TC average is greater than the base rate). The profit
share to be calculated each month is based on the trailing BSI TC average
for the month.
|
Vessel
|
Dwt
|
Year Built
-
Expected Delivery (1)
|
Time Charter Employment
Expiration (2)
|
Daily Time Charter Hire Rate
(3)
|
Profit Share
|
Bittern (4)
|
58,000
|
Oct
2009
|
Dec
2014
|
$18,850
|
—
|
Dec
2014 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Canary
|
58,000
|
2009Q4
|
Jan
2015
|
$18,850
|
—
|
Jan
2015 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Thrasher
|
53,100
|
2009Q4
|
Feb
2016
|
$18,400
|
—
|
Feb
2016 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Crane
|
58,000
|
2010Q1
|
Feb
2015
|
$18,850
|
—
|
Feb
2015 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Avocet
|
53,100
|
2010Q1
|
Mar
2016
|
$18,400
|
—
|
Mar
2016 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Egret (5)
|
58,000
|
2010Q1
|
Sep
2012 to Jan 2013
|
$17,650
|
50%
over $20,000
|
Golden Eagle
|
56,000
|
2010Q1
|
Charter
Free
|
—
|
—
|
Imperial Eagle
|
56,000
|
2010Q1
|
Charter
Free
|
—
|
—
|
Gannet (5)
|
58,000
|
2010Q1
|
Oct
2012 to Feb 2013
|
$17,650
|
50%
over $20,000
|
Grebe(5)
|
58,000
|
2010Q2
|
Nov
2012 to Mar 2013
|
$17,650
|
50%
over $20,000
|
Ibis
(5)
|
58,000
|
2010Q2
|
Dec
2012 to Apr 2013
|
$17,650
|
50%
over $20,000
|
Jay
|
58,000
|
2010Q2
|
Sep
2015
|
$18,500
|
50%
over $21,500
|
Sep
2015 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Kingfisher
|
58,000
|
2010Q3
|
Oct
2015
|
$18,500
|
50%
over $21,500
|
Oct
2015 to Dec 2018/Apr 2019
|
$18,000
|
50%
over $22,000
|
|||
Martin
|
58,000
|
2010Q3
|
Dec
2016 to Dec 2017
|
$18,400
|
—
|
Thrush
|
53,100
|
2010Q4
|
Charter
Free
|
—
|
—
|
Nighthawk
|
58,000
|
2011Q1
|
Sep
2017 to Sep 2018
|
$18,400
|
—
|
Oriole
|
58,000
|
2011Q3
|
Jan
2018 to Jan 2019
|
$18,400
|
—
|
Owl
|
58,000
|
2011Q3
|
Feb
2018 to Feb 2019
|
$18,400
|
—
|
Petrel (5)
|
58,000
|
2011Q4
|
Jun
2014 to Oct 2014
|
$17,650
|
50%
over $20,000
|
Puffin (5)
|
58,000
|
2011Q4
|
Jul
2014 to Nov 2014
|
$17,650
|
50%
over $20,000
|
Roadrunner (5)
|
58,000
|
2011Q4
|
Aug
2014 to Dec 2014
|
$17,650
|
50%
over $20,000
|
Sandpiper (5)
|
58,000
|
2011Q4
|
Sep
2014 to Jan 2015
|
$17,650
|
50%
over $20,000
|
CONVERTED INTO OPTIONS
|
|||||
Cernicalo (6,7)
|
58,000
|
2011Q1
|
Charter
Free
|
—
|
—
|
Fulmar (6,7)
|
58,000
|
2011Q3
|
Charter
Free
|
—
|
—
|
Besra
(6,7)
|
58,000
|
2011Q4
|
Charter
Free
|
—
|
—
|
Goshawk (6,7)
|
58,000
|
2011Q4
|
Charter
Free
|
—
|
—
|
Snipe (7)
|
58,000
|
2012Q1
|
Charter
Free
|
—
|
—
|
Swift (7)
|
58,000
|
2012Q1
|
Charter
Free
|
—
|
—
|
Raptor (7)
|
58,000
|
2012Q2
|
Charter
Free
|
—
|
—
|
Saker (7)
|
58,000
|
2012Q2
|
Charter
Free
|
—
|
—
|
(1)
|
Vessel
build and delivery dates are estimates based on guidance received from
shipyard.
|
|
(2)
|
The
date range represents the earliest and latest date on which the charterer
may redeliver the vessel to the Company upon the termination of the
charter.
|
|
(3)
|
The
time charter hire rate presented are gross daily charter rates before
brokerage commissions ranging from 1.25% to 6.25% to third party ship
brokers.
|
|
(4)
|
The
BITTERN was delivered in October 2009.
|
|
(5)
|
The
charterer has an option to extend the charter by 2 periods of 11 to 13
months each.
|
|
(6)
|
Options
for construction declared on December 27, 2007.
|
|
(7)
|
Firm
contracts converted to options in December
2008.
|
|
·
|
Strategic management.
We locate, obtain financing and insurance for, purchase and sell
vessels.
|
|
·
|
Commercial management.
We obtain employment for our vessels and manage our relationships with
charterers.
|
|
·
|
Technical management.
The technical manager performs day-to-day operations and maintenance of
our vessels.
|
Commercial
and Strategic Management
|
Technical
Management
|
Three
Months Ended
|
Nine
Months Ended
|
|||
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|
Ownership
Days
|
2,300
|
1,866
|
6,713
|
5,160
|
Available
Days
|
2,271
|
1,862
|
6,657
|
5,117
|
Operating
Days
|
2,264
|
1,845
|
6,634
|
5,094
|
Fleet
Utilization
|
99.7%
|
99.1%
|
99.7%
|
99.6%
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|||||||||||||
Net
Income
|
$ | 512,261 | $ | 23,221,617 | $ | 31,096,577 | $ | 52,473,557 | ||||||||
Interest
Expense
|
7,294,151 | 3,714,458 | 20,596,321 | 10,513,928 | ||||||||||||
Depreciation
and Amortization
|
11,094,238 | 8,991,877 | 32,328,402 | 23,718,898 | ||||||||||||
Amortization
of fair value below contract value of time charters
acquired
|
(645,098 | ) | (264,053 | ) | (1,942,278 | ) | (264,053 | ) | ||||||||
EBITDA
|
18,255,552 | 35,663,899 | 82,079,022 | 86,442,330 | ||||||||||||
Adjustments
for Exceptional Items:
|
||||||||||||||||
Write-off
of Financing Fees (1)
|
3,383,289 | — | 3,383,289 | — | ||||||||||||
Non-cash
Compensation Expense (2)
|
3,345,433 | 3,194,509 | 10,587,150 | 7,766,452 | ||||||||||||
Credit
Agreement EBITDA
|
$ | 24,984,274 | $ | 38,858,408 | $ | 96,049,461 | $ | 94,208,782 |
(1) One time charge (see Note 4 to
the financial statements).
(2) Stock
based compensation related to stock options, restricted stock
units.
|
(in
thousands of U.S. dollars)
|
Within
One
Year
|
One
to
Three
Years
|
Three
to Five Years
|
More
than
Five years
|
Total
|
|||||||||||||||
Vessels
(1)
|
$ | 308,978 | $ | 198,868 | — | — | $ | 507,846 | ||||||||||||
Bank Loans | — | — | — | $ | 836,726 | 836,726 | ||||||||||||||
Interest
and borrowing fees (2)
|
57,238 | 114,632 | 104,909 | — | 276,779 | |||||||||||||||
Office
lease (3)
|
649 | 1,577 | 1,670 | 3,062 | 6,958 | |||||||||||||||
Total
|
$ | 366,865 | $ | 315,077 | $ | 106,579 | $ | 839,788 | $ | 1,628,309 | ||||||||||
|
(1)
|
The
balance of the contract price in US dollars for the 22 newbuilding vessels
which are to be constructed and delivered between 2009 and 2011. Two of
the newbuilding vessels are priced in Japanese
yen.
|
|
(2)
|
The
Company is a party to floating-to-fixed interest rate swaps covering
aggregate notional amount of $771,529,273. Interest and borrowing fees
includes capitalized interest for the newbuilding
vessels.
|
|
(3)
|
Remainder
of the lease on the office space which we
occupy.
|
Quarter Ending
|
Off-hire Days(1)
|
Projected Costs(2)
|
December
31, 2009
|
44
|
$1.00
million
|
March
31, 2010
|
44
|
$1.00
million
|
June
30, 2010
|
44
|
$1.00
million
|
September
30, 2010
|
44
|
$1.00
million
|
(1)Actual
duration of drydocking will vary based on the condition of the vessel,
yard schedules and other factors.
(2)Actual
costs will vary based on various factors, including where the drydockings
are actually performed.
|
3.1
|
Amended
and Restated Articles of Incorporation of the Company 1
|
3.2
|
Amended
and Restated Bylaws of the Company 1
|
3.3
|
Certificate
of Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock 2
|
4.1
|
Form
of Share Certificate of the Company 1
|
4.2
|
Form
of Senior Indenture 3
|
4.3
|
Form
of Subordinated Indenture 3
|
4.4
|
Rights
Agreement 2
|
10.1
|
Amended
and Restated Employment Agreement of Mr. Sophocles N. Zoullas, dated as of
September 19, 2008 4,6
|
10.2
|
Amendatory
Agreement, dated as of July 3, 2008, among the Company and certain of its
subsidiaries and the banks and financial institutions party thereto and
the Royal Bank of Scotland plc, as mandated lead arranger 5
|
10.3
|
Second
Amendatory Agreement, dated as of December 17, 2008, among the Company and
certain of its subsidiaries and the banks and financial institutions party
thereto and the Royal Bank of Scotland plc, as mandated lead arranger
7
|
10.4
|
Third
Amendatory Agreement, dated as of August 4, 2009, among the Company and
certain of its subsidiaries and the banks and financial institutions party
thereto and the Royal Bank of Scotland plc, as mandated lead
arranger
|
31.1
|
Rule
13a-14(d) / 15d-14(a) Certification of CEO
|
31.2
|
Rule
13a-14(d) / 15d-14(a) Certification of CFO
|
32.1
|
Section
1350 Certification of CEO
|
32.2
|
Section
1350 Certification of CFO
|