Safe Bulkers, Inc. (the "Company") (NYSE: SB), an international
provider of marine drybulk transportation services, announced today
its unaudited financial results for the three and nine month period
ended September 30, 2011. The Company's Board of Directors also
declared a quarterly dividend of $0.15 per share for the
third
-quarter of 2011.
Summary of Third Quarter 2011 Results
- Net revenue for the third quarter of 2011 increased by 4% to
$42.5 million from $40.8 million during the same period in
2010.
- Net income for the third quarter of 2011 decreased by 10% to
$19.8 million from $22.0 million during the same period in 2010.
Adjusted net income(1) for the third quarter of 2011 decreased
slightly to $25.9 million from $26.1 million during the same period
in 2010.
- EBITDA(2) for the third quarter of 2011 decreased by 7% to
$26.6 million from $28.6 million during the same period in 2010.
Adjusted EBITDA(1) for the third quarter of 2011 increased slightly
to $32.8 million from $32.7 million during the same period in
2010.
- Earnings per share ("EPS") and Adjusted EPS(1) for the third
quarter of 2011 of $0.28 and $0.37 respectively, calculated on a
weighted average number of shares of 70,889,569, compared to $0.33
and $0.40 in the third quarter 2010, calculated on a weighted
average number of shares of 65,874,601.
- The Company's Board of Directors declared a dividend of $0.15
per share for the third quarter of 2011.
Summary of Nine Months Ended September 30, 2011
Results
- Net revenue for the first nine months of 2011 increased by 9%
to $126.0 million from $115.7 million during the same period in
2010.
- Net income for the first nine months of 2011 decreased by 16%
to $66.2 million from $78.5 million during the same period in 2010.
Adjusted net income(1) for the first nine months of 2011 increased
by 3% to $78.8 million from $76.2 million during the same period in
2010.
- EBITDA(2) for the first nine months of 2011 decreased by 9% to
$86.6 million from $95.5 million during the same period in 2010.
Adjusted EBITDA(1) for the first nine months of 2011 increased by
6% to $99.2 million from $93.2 million during the same period in
2010.
- EPS and Adjusted EPS(1) for the first nine months of 2011 of
$0.96 and $ 1.14, respectively, calculated on a weighted average
number of shares of 68,980,741, compared to $1.26 and $1.22 in the
first nine months of 2010, calculated on a weighted average number
of shares of 62,431,775.
(1) Adjusted net income, Adjusted EPS and Adjusted EBITDA
represent Net Income, EPS and EBITDA before gain/(loss) on sale of
assets, early redelivery income/(cost) and gain/(loss) on
derivatives and foreign currency respectively. See Table 1.
(2) EBITDA represents net income plus interest expense, tax,
depreciation and amortization. See Table 1.
Fleet and Employment Profile
On September 9, 2011, the Company took delivery of the MV Venus
History, a Japanese-built, Post-Panamax class newbuild vessel.
As of October 15, 2011, the Company's operational fleet was
comprised of 17 drybulk vessels with an average age of 4.3
years.
The Company has contracted to acquire 10 additional drybulk
newbuild vessels with deliveries scheduled at various times through
2014. The newbuild vessels consist of 4 Panamax vessels with
delivery dates 1 in the first half of 2012, 1 in the second half of
2013 and 2 in the first half of 2014; 3 Kamsarmax vessels with
delivery dates in the first half of 2012; 1 Post-Panamax vessel
with delivery date in the first half of 2012; and 2 Capesize
vessels, 1 in the second half of 2011 and the other in the second
half of 2012.
As of October 15, 2011, the contracted employment of fleet
ownership days for the remainder of 2011 was 81%. For the full
years 2011, 2012 and 2013, the contracted employment of fleet
ownership days was 96%, 67% and 57%, respectively. Contracted
employment includes vessels which are scheduled to be delivered to
us in the future.
Capital expenditure requirements and liquidity
as of September 30, 2011
The remaining capital expenditure requirements net of
commissions for the delivery of the 10 newbuilds amounted to $276.7
million, of which $48.3 million is scheduled to be paid in 2011,
$148.0 million in 2012, $25.6 million in 2013 and $54.8 million in
2014. We anticipate satisfying these capital expenditure
requirements from existing cash and time deposits, operating cash
surplus and existing undrawn loan facilities.
The Company had $28.1 million in cash and short-term time
deposits, $5.4 million in long-term restricted cash and $50.0
million in a long-term floating rate note, from which it may borrow
up to 80% under certain conditions. Additionally, the Company had
an aggregate of $180.0 million in undrawn loan and credit
facilities and commitments for two existing vessels and three
newbuild vessels and $48.4 million available from existing
revolving reducing credit facilities.
Apart from the above loan and credit facilities and commitments,
the Company will be able to borrow against seven debt-free newbuild
vessels, on which additional financing may be contracted as and if
required.
Dividend Declaration
The Company's Board of Directors declared a cash dividend on the
Company's common stock of $0.15 per share payable on or about
November 30, 2011 to shareholders of record at the close of trading
of the Company's common stock on the New York Stock Exchange (the
"NYSE") on November 23, 2011.
The Company has 70,891,916 shares of common stock issued and
outstanding as of today's date.
The Board of Directors of the Company is continuing a policy of
paying out a portion of the Company's free cash flow at a level it
considers prudent in light of the current economic and financial
environment. The declaration and payment of dividends, if any, will
always be subject to the discretion of the Board of Directors of
the Company. The timing and amount of any dividends declared will
depend on, among other things: (i) our earnings, financial
condition and cash requirements and available sources of liquidity,
(ii) decisions in relation to our growth strategies, (iii)
provisions of Marshall Islands and Liberian law governing the
payment of dividends, (iv) restrictive covenants in our existing
and future debt instruments and (v) global financial conditions. We
can give no assurance that dividends will be paid in the
future.
Management Commentary
Dr. Loukas Barmparis, President of the Company, said: "We are
pleased to announce that our Board of Directors has declared our
fourteenth consecutive dividend since our IPO. We believe our
financial position is supported by our charter coverage and fleet
expansion. We believe our capital expenditure requirements are
fully covered by our available liquidity while upon delivery of all
our newbuilds, seven brand new vessels are expected to be
debt-free. We continue to implement our newbuilding program and we
may pursue further attractive vessel acquisition opportunities with
new vessel designs currently under development by leading
shipyards, complying with upcoming regulations and incorporating
technology advancements providing for energy efficiency and
environmental protection expanding and renewing our current
fleet."
Conference Call
On Tuesday, October 18, 2011 at 9:00 A.M. EDT, the Company's
management team will host a conference call to discuss the
financial results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 (866) 819-7111 (US
Toll Free Dial In), 0(800) 953-0329 (UK Toll Free Dial In) or +44
(0)1452-542-301 (Standard International Dial In). Please quote "Safe Bulkers" to the operator.
A telephonic replay of the conference call will be available
until October 28, 2011 by dialing 1 (866) 247-4222 (US Toll Free
Dial In), 0(800) 953-1533 (UK Toll Free Dial In) or +44 (0)1452
550-000 (Standard International Dial In). Access Code: 1859591#
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the
conference call, available through the Company's website
(www.safebulkers.com). Participants in the live webcast should
register on the website approximately 10 minutes prior to the start
of the webcast.
Management Discussion of Third Quarter 2011
Results
Net income decreased by 10% to $19.8 million for the third
quarter of 2011 from $22.0 million for the third quarter of 2010,
mainly due to the following factors:
Net revenues: Net revenues increased by 4% to $42.5 million for
the third quarter of 2011 compared to $40.8 million for the same
period in 2010, mainly due to an increased number of operating days
partly offset by average lower charter rates. The Company operated
16.24 vessels on average during the third quarter of 2011, earning
a time charter equivalent ("TCE") rate of $28,312, compared to
15.00 vessels and a TCE rate of $29,605 during the same period in
2010.
Vessel operating expenses: Vessel operating expenses increased
by 12% to $6.6 million for the third quarter of 2011 compared to
$5.9 million for the same period in 2010. The increase in operating
expenses is mainly attributable to an increase in ownership days by
8% to 1,494 days for the third quarter of 2011 from 1,380 days for
the same period in 2010. Daily vessel operating expenses increased
by 3% to $4,426 for the third quarter of 2011 compared to $4,294
for the same period in 2010, mainly due to increase of crewing and
insurance costs.
Depreciation: Depreciation increased to $5.8 million for the
third quarter of 2011 compared to $5.2 million for the same period
in 2010, as a result of the increase in the average number of
vessels operated by the Company during the third quarter of
2011.
Loss on derivatives: Loss on derivatives increased to $6.2
million in the third quarter of 2011 compared to a loss of $3.9
million for the same period in 2010, as a result of the
mark-to-market valuation of the Company's interest rate swap
transactions that we employ to manage the risk and interest rate
exposure of our loan and credit facilities. These swaps
economically hedge the interest rate exposure of the Company's
aggregate loans outstanding. The average remaining period of our
swap contracts is 2.7 years as of September 30, 2011. The valuation
of these interest rate swap transactions at the end of each quarter
is affected by the prevailing interest rates at that time.
Interest expense: Interest expense decreased by 39% to $1.1
million in the third quarter of 2011 from $1.8 million for the same
period in 2010, attributable to the declining US dollar interest
rates and a decrease in the average outstanding indebtedness.
Other finance costs: Other finance costs increased to $0.7
million for the third quarter of 2011 compared to approximately
zero for the same period in 2010, as a result of the increase in
legal and commitment fees of new credit facilities during the third
quarter of 2011.
Unaudited Interim Financial Information and Other Data
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands of U.S. Dollars except for share and per share data)
Three-Months Period Nine-Months Period
Ended September 30, Ended September 30,
---------------------- ----------------------
2010 2011 2010 2011
---------- ---------- ---------- ----------
REVENUES:
Revenues 41,599 43,302 117,790 128,321
Commissions (767) (771) (2,057) (2,330)
Net revenues 40,832 42,531 115,733 125,991
EXPENSES:
Voyage expenses (184) (233) (476) (1,040)
Vessel operating expenses (5,926) (6,613) (16,838) (18,879)
Depreciation (5,242) (5,838) (14,252) (17,066)
General and administrative
expenses (1,945) (2,126) (5,008) (6,018)
Early redelivery
(cost)/income (193) - 132 101
Gain on sale of asset - - 15,199 -
Operating income 27,342 27,721 94,490 83,089
OTHER (EXPENSE) / INCOME:
Interest expense (1,754) (1,098) (4,771) (3,740)
Other finance costs (49) (748) (183) (868)
Interest income 474 259 2,246 787
Loss on derivatives (3,928) (6,165) (13,046) (12,317)
Foreign currency loss (16) (18) (6) (409)
Amortization and write-off
of deferred finance
charges (60) (185) (215) (363)
Net income 22,009 19,766 78,515 66,179
Earnings per share 0.33 0.28 1.26 0.96
Weighted average number of
shares 65,874,601 70,889,569 62,431,775 68,980,741
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands of U.S. Dollars)
December 31, 2010 September 30, 2011
------------------ ------------------
ASSETS
Cash, time deposits 100,415 28,144
Other current assets 3,861 9,397
Vessels, net 541,244 581,306
Advances for vessel acquisition and
vessels under construction 99,014 148,373
Restricted cash non-current 5,423 5,423
Long-term investment 50,000 50,000
Other non-current assets 5,415 6,288
Total assets 805,372 828,931
LIABILITIES AND EQUITY
Current portion of long-term debt 27,674 15,973
Other current liabilities 25,309 32,159
Long-term debt, net of current
portion 467,070 429,568
Other non-current liabilities 41,186 32,335
Shareholders' equity 244,133 318,896
Total liabilities and equity 805,372 828,931
Fleet Data 2011
Three-Months Nine-Months
Period Ended Period Ended
September 30, September 30,
------------------ ------------------
2010 2011 2010 2011
-------- -------- -------- --------
FLEET DATA
Number of vessels at period's end 15 17 15 17
Average age of fleet (in years) 3.80 4.29 3.80 4.29
Ownership days (1) 1,380 1,494 3,917 4,390
Available days (2) 1,373 1,494 3,896 4,382
Operating days (3) 1,372 1,491 3,870 4,374
Fleet utilization (4) 99.4% 99.8% 98.8% 99.6%
Average number of vessels in the
period (5) 15.00 16.24 14.35 16.08
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 29,605 $ 28,312 $ 29,583 $ 28,515
Daily vessel operating expenses (7) $ 4,294 $ 4,426 $ 4,299 $ 4,300
_____________
(1) Ownership days represent the aggregate number of days in a period during
which each vessel in our fleet has been owned by us.
(2) Available days represent the total number of days in a period during
which each vessel in our fleet was in our possession net of off-hire
days associated with scheduled maintenance, which includes major
repairs, drydockings, vessel upgrades or special or intermediate
surveys.
(3) Operating days represent the number of our available days in a period
less the aggregate number of days that our vessels are off-hire due to
any reason, excluding scheduled maintenance.
(4) Fleet utilization is calculated by dividing the number of our operating
days during a period by the number of our ownership days during that
period.
(5) Average number of vessels in the period is calculated by dividing
ownership days in the period by the number of days in that period.
(6) Time charter equivalent rates, or TCE rates, represent our charter
revenues less commissions and voyage expenses during a period divided by
the number of our available days during the period.
(7) Daily vessel operating expenses include the costs for crewing,
insurance, lubricants, spare parts, provisions, stores, repairs,
maintenance, statutory and classification expense, drydocking,
intermediate and special surveys and other miscellaneous items. Daily
vessel operating expenses are calculated by dividing vessel operating
expenses by ownership days for the relevant period.
TABLE 1
RECONCILIATION OF ADJUSTED NET INCOME, EBITDA, ADJUSTED EBITDA AND ADJUSTED
EPS
Three-Months Nine-Months
Period Ended Period Ended
September 30, September 30,
--------------------- ----------------------
(In thousands of U.S. Dollars
except for share and per
share data) 2010 2011 2010 2011
---------- ---------- ---------- ----------
Net Income - Adjusted Net
Income
Net Income 22,009 19,766 78,515 66,179
Less Gain on Sale of Assets - - (15,199) -
Plus/Less Early Redelivery
Cost/(Income) 193 - (132) (101)
Plus Loss on Derivatives 3,928 6,165 13,046 12,317
Plus Foreign Currency Loss 16 18 6 409
Adjusted Net Income 26,146 25,949 76,236 78,804
EBITDA - Adjusted EBITDA
Net Income 22,009 19,766 78,515 66,179
Plus Net Interest Expense 1,280 839 2,525 2,953
Plus Depreciation 5,242 5,838 14,252 17,066
Plus Amortization 60 185 215 363
EBITDA 28,591 26,628 95,507 86,561
Less Gain on Sale of Assets - - (15,199) -
Less Early Redelivery
Cost/(Income) 193 - (132) (101)
Plus Loss on Derivatives 3,928 6,165 13,046 12,317
Plus Foreign Currency Loss 16 18 6 409
ADJUSTED EBITDA 32,728 32,811 93,228 99,186
EPS - Adjusted EPS
Net Income 22,009 19,766 78,515 66,179
Adjusted Net Income 26,146 25,949 76,236 78,804
Weighted average number of
shares 65,874,601 70,889,569 62,431,775 68,980,741
EPS 0.33 0.28 1.26 0.96
Adjusted EPS 0.40 0.37 1.22 1.14
EBITDA represents net income before interest, income tax
expense, depreciation and amortization. Adjusted EBITDA represents
EBITDA before gain/(loss) on sale of assets, early redelivery
income/(cost) and gain/(loss) on derivatives and foreign currency.
EBITDA and adjusted EBITDA are not recognized measurements under US
GAAP. EBITDA and adjusted EBITDA assist the Company's management
and investors by increasing the comparability of the Company's
fundamental performance from period to period and against the
fundamental performance of other companies in the Company's
industry that provide EBITDA and adjusted EBITDA information. The
Company believes that EBITDA and adjusted EBITDA are useful in
evaluating the Company's operating performance compared to that of
other companies in the Company's industry because the calculation
of EBITDA generally eliminates the effects of financings, income
taxes and the accounting effects of capital expenditures and
acquisitions and the calculation of adjusted EBITDA generally
further eliminates the effects from gain/(loss) on sale of assets,
early redelivery income/(cost) and gain/(loss) on derivatives and
foreign currency, items which may vary for different companies for
reasons unrelated to overall operating performance.
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS
have limitations as analytical tools, and should not be considered
in isolation, or as a substitute for analysis of the Company's
results as reported under US GAAP and should not be considered as
substitutes for net income and other operations data prepared in
accordance with US GAAP or as a measure of profitability. While
EBITDA and adjusted EBITDA are frequently used as measures of
operating results and performance, they are not necessarily
comparable to other similarly titled captions of other companies
due to differences in methods of calculation.
Existing Fleet Employment Profile as of October
15, 2011
Set out below is a table showing our existing vessels and their
contracted employment.
----------------------------------------------------------------------------
Year Charter Rate (a)
Vessel Name DWT Built USD/day Charter Duration (b)
----------------------------------------------------------------------------
Maria 76,000 2003 20,250 Apr 2011 - Apr 2014
----------------------------------------------------------------------------
Vassos 76,000 2004 29,000 Nov 2008 - Oct 2013
----------------------------------------------------------------------------
Katerina 76,000 2004 20,000 Feb 2011 - Feb 2014
----------------------------------------------------------------------------
Maritsa 76,000 2005 26,727 (c) Mar 2010 - Mar 2015
----------------------------------------------------------------------------
Pedhoulas Merchant 82,300 2006 18,350 Aug 2011 - Aug 2013
----------------------------------------------------------------------------
Pedhoulas Trader 82,300 2006 20,000 (d) Aug 2008 - Jul 2013
----------------------------------------------------------------------------
Pedhoulas Leader 82,300 2007 16,250 May 2011 - Oct 2011
----------------------------------------------------------------------------
Stalo 87,000 2006 34,160 Mar 2010 - Feb 2015
----------------------------------------------------------------------------
Marina 87,000 2006 42,500 (e) Dec 2008 - Dec 2013
----------------------------------------------------------------------------
Sophia 87,000 2007 34,720 Oct 2008 - Sep 2013
----------------------------------------------------------------------------
Eleni 87,000 2008 34,160 Apr 2010 - Mar 2015
----------------------------------------------------------------------------
Martine 87,000 2009 40,500 Feb 2009 - Feb 2014
----------------------------------------------------------------------------
Andreas K 92,000 2009 22,000 Feb 2011 - Oct 2011
15,250 Oct 2011 - Apr 2012
----------------------------------------------------------------------------
Panayiota K 92,000 2010 19,250 May 2011 - Nov 2011
15,250 Nov 2011 - May 2012
----------------------------------------------------------------------------
Venus Heritage 95,800 2010 17,750 Mar 2011 - Oct 2011
----------------------------------------------------------------------------
Venus History 95,800 2011 13,500 Sep 2011 - Oct 2011
----------------------------------------------------------------------------
Kanaris 178,100 2010 25,928 Sep 2011 - Jun 2031
----------------------------------------------------------------------------
(a) Gross charter rates as of October 15, 2011.
(b) Delivery / redelivery dates reflect the Company's best estimates.
Actual delivery / redelivery dates can differ pursuant to the terms
of the relevant charter contract.
(c) Initially a five-year variable rate contract, first and second year
at $32,000, third year at $28,000, and fourth and fifth years at
$24,000. In April 2011, the Company agreed with the charterer to
adopt a fixed charter rate of $26,727 for the remainder of the five
year charter period without changing the total contracted revenue.
(d) Five-year variable rate contract, first year at $69,000, second
year at $56,500, third year at $42,000, and fourth and fifth years
at $20,000.
(e) Five-year variable rate contract, $61,500 from Dec. 2008 to Mar.
2009, $57,500 from Apr. 2009 to Dec. 2009, $52,500 from Dec. 2009
to Dec. 2010, $42,500 from Dec. 2010 to Dec. 2011, $32,500 from
Dec. 2011 to Oct. 2012, $31,500 from Oct. 2012 to Dec. 2012 and
$21,500 from Dec. 2012 to Dec. 2013.
The contracted charter coverage including newbuilds, based on
the Company's best estimates as of October 15, 2011, is:
2011 (remaining) 81%
2011 (full year) 96%
2012 67%
2013 57%
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk
transportation services, transporting bulk cargoes, particularly
coal, grain and iron ore, along worldwide shipping routes for some
of the world's largest users of marine drybulk transportation
services. The Company's common stock is listed on the NYSE, where
it trades under the symbol "SB". The Company's current fleet
consists of 17 drybulk vessels, all built post-2003, and the
Company has contracted to acquire 10 additional drybulk newbuild
vessels to be delivered at various times through 2014.
Forward-Looking Statements
This press release contains forward-looking statements (as
defined in Section 27A of the Securities Exchange Act of 1933, as
amended, and in Section 21E of the Securities Act of 1934, as
amended) concerning future events, the Company's growth strategy
and measures to implement such strategy, including expected vessel
acquisitions and entering into further time charters. Words such as
"expects," "intends," "plans," "believes," "anticipates," "hopes,"
"estimates" and variations of such words and similar expressions
are intended to identify forward-looking statements. Although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct. These
statements involve known and unknown risks and are based upon a
number of assumptions and estimates that are inherently subject to
significant uncertainties and contingencies, many of which are
beyond the control of the Company. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, changes in the demand
for drybulk vessels, competitive factors in the market in which the
Company operates, risks associated with operations outside the
United States and other factors listed from time to time in the
Company's filings with the Securities and Exchange Commission. The
Company expressly disclaims any obligations or undertaking to
release any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's
expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based.
For further information please contact: Company
Contact: Dr. Loukas Barmparis President Safe Bulkers, Inc.
Athens, Greece Tel.: +30 (210) 899-4980 Fax: +30 (210) 895-4159
E-Mail: directors@safebulkers.com Investor Relations / Media
Contact: Nicolas Bornozis President Capital Link, Inc. 230 Park
Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (212) 661-7566 Fax:
(212) 661-7526 E-Mail: safebulkers@capitallink.com
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