Company Reports 13.6% Year Over Year Operating Revenue Growth
PIRAEUS, Greece, April 25 /PRNewswire-FirstCall/ -- FreeSeas Inc.
(Nasdaq: FREE; FREEW; FREEZ) (FreeSeas), a provider of seaborne
transportation for dry bulk cargoes, announced today unaudited
operating results for the full year ended December 31, 2006. For
the year ended December 31, 2006, FreeSeas reported operating
revenue growth of 13.6% to $11.73 million, compared with $10.33
million in 2005. Net loss for the year was $3.32 million, or $0.53
per share, based on 6,290,100 basic shares outstanding. Excluding
non-cash compensation costs of $651,000, net loss for the year
ended December 31, 2006 would have been $2.67 million, or $0.42 per
basic share. In 2005, the Company reported net income of $152,000,
or $0.03 per share, based on 4,574,588 basic shares outstanding.
Excluding non-cash compensation costs of $180,000, net income for
the year ended December 31, 2005 would have been $332,000, or $0.07
per basic share. In January 2007, FreeSeas and its Board of
Directors announced a comprehensive restructuring of the business
aimed at streamlining management and positioning the Company for
continued growth. "We enter 2007 with a new operating strategy that
is already providing us with measurable results," said Mr. Ion
Varouxakis, Chairman of the Board, President and Chief Executive
Officer. "While we ended 2006 with operating revenue growth in
excess of 13%, we believe that the next several years will provide
us with the foundation for future growth as we actively pursue
second hand tonnage to increase the size of our fleet and further
enhance our cash position." Operating loss for the year ended
December 31, 2006 was $2.28 million, compared with operating income
of $1.21 million for the comparable period in 2005. Excluding the
aforementioned non-cash compensation costs, operating loss for 2006
would have been $1.63 million, compared with operating income of
$1.41 million for 2005. EBITDA, adjusted for certain non-cash
compensation expenses, for 2006 was $3.24 million, compared with
$5.31 million for 2005. A reconciliation of EBITDA to net income is
provided below. Mr. Varouxakis continued, "As we move through 2007,
we are continuing to enjoy strong market fundamentals in the
drybulk industry, and our recent corporate initiatives have helped
position FreeSeas to take advantage of the current rate
environment. As an example, the recent proposed sale of the M/V
Free Fighter is expected to generate a $1.6 million capital gain
for the Company in the second quarter of 2007, which we plan to
leverage as we evaluate vessel acquisitions." Mr. Varouxakis
concluded, "FreeSeas will continue to execute on its new operating
strategy and we look forward to updating our shareholders on our
progress through increased communications." FREESEAS INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (All amounts in
tables in thousands of United States Dollars, except for share
data) For the Period from Date of Inception For the year For the
year (April 23, 2004) ended ended to December 31, December 31,2006
December 31,2005 2004 OPERATING REVENUES 11,727 10,326 2,830
OPERATING EXPENSES: Vessel operating expenses (4,483) (3,596) (786)
Voyage expenses (689) (55) (16) Depreciation expense (4,479)
(3,553) (872) Amortization of deferred dry-docking and special
survey costs (442) (355) (109) Management fees to a related party
(540) (488) (180) Commissions (799) (553) (127) Compensation costs
(651) (200) - General and administrative expenses (1,925) (321)
(34) Income from operations (2,281) 1,205 706 OTHER INCOME
(EXPENSE): Finance Costs (1,004) (1,076) (240) Interest income 19 8
4 Other (58) 15 Other expense (1,043) (1,053) (236) Net (loss)
income (3,324) 152 470 Basic (loss) earnings per share $(0.53)
$0.03 $0.10 Diluted (loss) earnings per share $(0.53) $0.03 $0.10
Basic weighted average number of shares 6,290,100 4,574,588
4,500,000 Diluted weighted average number of shares 6,290,100
4,600,444 4,500,000 FREESEAS INC. CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (All amounts in tables in thousands of United States
Dollars, except for share data) December 31, 2006 2005 ASSETS
CURRENT ASSETS Cash in hand and at bank 372 3,285 Trade
receivables, net 278 520 Inventories 242 42 Insurance claims 485
762 Due from related party 40 677 Total current assets 1,417 5,286
Fixed assets, net 19,369 23,848 Deferred charges, net 2,300 706
Total Assets 23,086 29,840 LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: Bank overdraft 2,000 - Accounts payable 2,003
1,176 Accrued liabilities 1,515 1,540 Unearned revenue 179 172
Shareholders' loans, current portion 1,218 950 Due to related
parties - 893 Long-term debt, current portion 3,345 5,500 Total
current liabilities 10,260 10,231 Long-term debt, net of current
portion 4,485 7,500 Shareholders' loans, net 1,334 2,250 Other
liabilities - 154 Total long-term liabilities 5,819 9,904 Total
Liabilities 16,079 20,135 Commitments and contingencies
SHAREHOLDERS' EQUITY Preferred shares (5,000,000 authorized with
par value $0.001, nil issued and outstanding as at 2006 and 2005) -
- Common shares (40,000,000 authorized with par value $0.001,
6,290,100 shares issued and outstanding at 2006 and 2005,
respectively) 6 6 Additional paid-in capital 9,703 9,242 Retained
earnings / (deficit) (2,702) 622 Deferred stock compensation -
(165) Total shareholders' equity 7,007 9,705 Total Liabilities and
Shareholders' Equity 23,086 29,840 FREESEAS INC. EBITDA TO NET
INCOME RECONCILIATION (UNAUDITED) (All amounts in tables in
thousands of United States Dollars, except for share data) December
31, 2006 2005 EBITDA Net Income (Loss) (3,324) 152 Interest Expense
1,004 1,075 Interest Income (19) (8) Depreciation 4,479 3,554
Amortization 442 355 Non-Cash Compensation Cost 651 180 EBITDA
3,233 5,308 EBITDA Reconciliation FreeSeas Inc. considers EBITDA to
represent net earnings before interest, taxes, depreciation and
amortization. EBITDA does not represent and should not be
considered as an alternative to net income or cash flow from
operations, as determined by United States generally accepted
accounting principles, or U.S. GAAP, and our calculation of EBITDA
may not be comparable to that reported by other companies. EBITDA
is included herein because it is a basis upon which the Company
assesses its liquidity position and because FreeSeas believes that
it presents useful information to investors regarding a company's
ability to service and/or incur indebtedness. The Company's
definition of EBITDA may not be the same as that used by other
companies in the shipping or other industries. About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal
offices in Piraeus, Greece. FreeSeas is engaged in the
transportation of dry bulk cargoes through the ownership and
operation of dry bulk vessels. Currently, it has a fleet of two
Handysize vessels. FreeSeas' common stock and warrants trade on the
NASDAQ Capital Market under the symbols FREE, FREEW and FREEZ,
respectively. Risks and uncertainties are described in reports
filed by FreeSeas Inc. with the US Securities and Exchange
Commission, which can be obtained free of charge on the SEC's
website at http://www.sec.gov/. For more information about FreeSeas
Inc. please go to our corporate website http://www.freeseas.gr/.
Forward-Looking Statements This press release contains
forward-looking statements (as defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended) concerning future
events and the Company's growth strategy and measures to implement
such strategy, including expected vessel acquisitions. 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 be correct. These
statements involve known and unknown risks and are based upon a
number of assumptions and estimates which 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 dry bulk 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 obligation or undertaking to
release publicly 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: Ion Varouxakis
Chief Executive Officer FreeSeas Inc. 89 Akti Miaouli Street 185 38
Piraeus, Greece Tel: 011-30-210-45-28-770 Fax: 011-30-210-429-10-10
E-Mail: http://www.freeseas.gr/ Investor Relations / Financial
Media: Thomas J. Rozycki, Jr. Sr. Vice President Cubitt Jacobs
& Prosek Communications 350 Fifth Avenue - Suite 3901 New York,
NY 10118, USA Tel: +1.212.279.3115 x208 Fax: +1.212.279-3117
E-Mail: http://www.cjpcom.com/ DATASOURCE: FreeSeas Inc. CONTACT:
Ion Varouxakis, Chief Executive Officer of FreeSeas Inc.,
+011-30-210-45-28-770, fax, +011-30-210-429-10-10, ; or Investor
Relations-Financial Media, Thomas J. Rozycki, Jr., Sr. Vice
President of Cubitt Jacobs & Prosek Communications,
+1-212-279-3115 x208, fax, +1-212-279-3117, Web site:
http://www.freeseas.gr/
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