BULKU Navios Maritime Hlds Wrts (MM)

- Navios Announces Dividend Policy PIRAEUS, Greece, Nov. 28 /PRNewswire-FirstCall/ -- Navios Maritime Holdings Inc. ("Navios") (NASDAQ:BULKNASDAQ:BULKUNASDAQ:BULKW), a leading vertically integrated global shipping company specializing in the dry-bulk shipping industry, today reported its financial results for the third quarter and nine months ended September 30, 2005. Ms. Angeliki Frangou, Chairman and CEO of Navios, stated, "Since closing the acquisition of Navios at the end of the third quarter, we have taken a number of steps to position the Company for future growth and profitability. Recently, Navios announced the exercise of purchase options on certain vessels which will increase Navios's owned fleet to 12 vessels. In addition, Navios will expand its chartered-in fleet through the favorable charters of two new Panamaxes and one new Handymax in 2007 and 2008. Overall, I am pleased with this quarter's financial performance, which reflects solid operational results." For the following results and the selected financial statement tables below, Navios has presented combined statement of operations information for the three and nine months ended September 30, 2005. This information was derived from the unaudited consolidated statement of operations of the predecessor business for the period July 1 to August 25, 2005 and for the period January 1 to August 25, 2005 and from the unaudited consolidated statement of operations of the successor business for the period August 26 to September 30, 2005. Navios' has prepared this combined statement of operations information solely to assist comparisons across the three and nine month financial periods. The successor and predecessor periods in the combined statement of operations includes the effects of fair value purchase accounting adjustments. The combined information is a Non-US GAAP financial measure and should not be used in isolation or substitution of the Predecessor and Successor results. Third Quarter 2005 Results: In '000 Three Months Successor Predecessor Predecessor Ended September August 26, July 1, 2005 Three Months 30, 2005 2005 To To August Ended September 25, 2005 September 30, 2005 30, 2004 (Combined Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $51,758 $20,454 $31,304 $78,211 EBITDA $23,382 $7,923 $15,459 $28,383 Net income $16,763 $2,697 $14,066 $27,320 Revenues for the three months of operations ended September 30, 2005 were $51.7 million as compared to $78.2 million for the same period during 2004. EBITDA was $23.4 million for the third quarter 2005 as compared to $28.4 million for the same period of 2004. EBITDA for the quarter ended September 30, 2005 also included a one-time severance payment of $1.4 million to Navios' former CEO in accordance with a change of control provision contained in his employment contact. Net income for the quarter was $16.8 million as compared to $27.3 million for the comparable period of 2004. The decline in Revenues and Net income was principally attributable to a reduction in the number of short-term chartered-in vessels operated by the company during the respective periods as shown in the exhibit under "Fleet Summary Data". The "Available Days" for the fleet declined 30.7% to 2,075 days for the quarter ended September 30, 2005 as compared to the same period for 2004. The "Time Charter Equivalent" rate per day, including Forward Freight Agreements (FFA's), declined 10.1% to $22,055 for the three months ended September 30, 2005 as compared to the same period for 2004. As of September 30, 2005, Navios operated a fleet of 21 vessels, of which 6 were owned and 15 were under long-term charters at favorable rates. Navios's cash and cash equivalents balance as of September 30, 2005 was $133.3 million. Nine Months 2005 Results: In '000 Nine Months Successor Predecessor Predecessor Ended September August 26, Jan. 1, 2005 Nine Months 30, 2005 2005 To To August Ended September 25, 2005 September 30, 2005 30, 2004 (Combined Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $179,084 $20,454 $158,630 $216,274 EBITDA $63,915 $7,923 $55,992 $101,561 Net income $54,034 $2,697 $51,337 $95,916 Revenues for the nine months of operations ended September 30, 2005 were $179.1 million as compared to $216.3 million for the same period during 2004. EBITDA was $63.9 million for the first nine months 2005 as compared to $101.6 million for the same period of 2004. Net income for the nine months ended September 30, 2005 was $54.0 million as compared to $95.9 million for the comparable period of 2004. The first nine months of 2005 were adversely affected by a number of factors, including (i) a reduction in the number of short-term chartered vessels operated by Navios as exhibited in the 'Fleet Summary Data', (ii) $1.8 million of transaction costs incurred in connection with the sale of Navios and $1.4 million of one-time severance payments to the former CEO, and (iii) extraordinary profits in FFA trading in 2004 ($42.5 million). The "Available Days" for the fleet declined 26.4% to 6,886 days for the nine months ended September 30, 2005 as compared to the same period for 2004. The "Time Charter Equivalent" rate per day, including FFA's, declined 8.8% to $23,421 for the nine months ended September 30, 2005 as compared to the same period for 2004. Summary Fleet Data The following table reflects available days, operating days, fleet utilization, and TCE rates for the three month period ended September 30, 2005 and 2004. Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 (Combined) (Combined) Available days (1) 2,075 2,996 6,886 9,358 Operating days (2) 2,073 2,993 6,857 9,342 Fleet Utilization (3) 99.9% 99.9 % 99.6 % 99.8 % Time Charter Equivalent (TCE)* (4) $ 22,055 $ 24,520 $ 23,421 $25,687 *Including gains and losses from Forward Freight Agreements ("FFAs"). While FFAs are an integral part of our shipping business they are, for accounting purposes, a distinct activity. TCE rates excluding FFAs were, for the three months ending September 30, 2005 and 2004, $20,720 and $23,235, respectively and were, for the nine months ending September 30, 2005 and 2004, $23,135 and $21,146, respectively. (1) Available days for fleet are total calendar days the vessels were in our possession for the relevant period after subtracting off-hire days associated with major repairs, drydocks or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable of generating revenues. (2) Operating days is the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues. (3) Fleet utilization is the percentage of time that our vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels. (4) Time Charter Equivalent, or TCE, are defined as voyage and time charter revenues plus gains or losses on FFAs less voyage expenses during a relevant period divided by the number of available days during the period. Fleet Employment Profile: Following is the 'core fleet' employment profile, including new buildings to be delivered. The 'core fleet' includes the owned vessels and the long term chartered-in vessels. Navios's core fleet consists of a total of 29 vessels, totaling 1.9 million deadweight tons, including six modern Ultra- Handymax (52,000-55,000 dwt) vessels which the company owns, 15 Panamax (70,000-83,000 dwt) and 8 Ultra-Handymax vessels under long-term time charter. The 21 vessels in current operation aggregate approximately 1.3 million deadweight tons and have an average age of 3.5 years. Navios has currently fixed 57.6% of its 2006 available days. Vessel Type Built DWT Charter Expiration Rate(1) Date(2) Owned Vessels: Navios Achilles Ultra Handymax 2001 52,063 15,400 12/09/2005 Navios Apollon Ultra Handymax 2000 52,073 16,150 08/21/2007 Navios Herakles Ultra Handymax 2001 52,061 29,597 02/01/2006 Navios Hios Ultra Handymax 2003 55,180 19,237 09/15/2006 Navios Ionian Ultra Handymax 2000 52,068 27,693 12/06/2005 Navios Kypros Ultra Handymax 2003 55,222 24,063 04/27/2006 Long Term Chartered-in Vessels: Navios Arc Ultra Handymax 2003 53,514 17,908 07/15/2006 Navios Horizon Ultra Handymax 2001 50,346 12,588 05/30/2006 Navios Mercator Ultra Handymax 2002 53,400 21,175 10/01/2006 Navios Meridian Ultra Handymax 2002 50,316 20,045 10/15/2006 Navios Vector Ultra Handymax 2002 50,300 8,883 12/17/2007 Linda Oldendorff Panamax 1995 75,100 31,350 01/03/2006 Navios Aurora Panamax 2005 75,200 24,063 05/27/2008 Navios Cielo Panamax 2003 75,834 18,961 03/15/2006 Navios Galaxy Panamax 2001 74,195 24,062 12/25/2007 Navios Hyperion Panamax 2004 75,500 15,400 01/05/2007 Navios Magellan Panamax 2000 74,333 18,763 04/07/2006 Navios Orbiter Panamax 2004 76,000 33,688 12/28/2005 Navios Orion Panamax 2005 76,000 21,175 01/15/2007 Navios Star Panamax 2002 76,662 15,343 01/13/2007 Navios Titan Panamax 2005 82,300 20,000 10/09/2007 Long Term Chartered-in Vessels to be delivered: Navios TBN Shoei (Taiyo) Ultra Handymax 05/2006 53,500 Navios TBN Kamasarmax Panamax 08/2006 82,800 Navios TBN Toyo Kaiun Panamax 01/2007 75,500 Navios TBN Shoei Ultra Handymax 04/2007 53,500 Navios TBN Tsuneishi Panamax 09/2007 82,000 Navios TBN Doun Kisen Panamax 11/2007 75,200 Navios TBN Shoei Panamax 03/2008 76,500 Navios TBN Doun Kisen Ultra Handymax 05/2008 55,100 (1) Net Time Charter Rate per day (excludes commissions) (2) Estimated dates assuming earliest redelivery by charterers Selected Financial Tables The results of operations of Navios to August 25, 2005 are labeled as "Predecessor" and remain as historically reported. The results of operations from August 26, 2005 forward are labeled as "Successor" and reflect the operations of Navios subsequent to the acquisition and downstream merger of International Shipping Enterprises, Inc. NAVIOS MARITIME HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of US Dollars) Successor Predecessor Predecessor August 26, July 1, Three 2005 2005 Months To To Ended Sept. 30, August 25, Sept. 30, 2005 2005 2004 (Unaudited) (Unaudited) (Unaudited) Revenue $20,454 $31,304 $78,211 Gain (loss) on Forward Freight Agreements (898) 3,668 3,850 Time charter, voyage and port terminal expense (10,179) (15,873) (48,177) Direct vessel expense (858) (1,296) (1,863) General and administrative expense (866) (3,216) (2,920) Depreciation and amortization (2,187) (890) (1,503) Interest income 242 489 286 Interest expense (3,170) (687) (909) Other income 368 581 115 Other expense (337) (162) (36) Income before equity in net earnings of affiliate companies 2,569 13,918 27,054 Equity in net earnings of affiliate companies 128 148 266 Net income $2,697 $14,066 $27,320 Net income per share: Basic $0.068 $0.353 $0.685 Diluted $0.054 $0.283 $0.685 NAVIOS MARITIME HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of US Dollars) Successor Predecessor Predecessor August 26, January 1, Nine Months 2005 To To Ended Sept. 30, August 25, Sept. 30, 2005 2005 2004 (Unaudited) (Unaudited) (Unaudited) Revenue $20,454 $158,630 $216,274 Gain (loss) on Forward Freight Agreements (898) 2,869 42,492 Time charter, voyage and port terminal expense (10,179) (91,806) (141,494) Direct vessel expense (858) (5,650) (6,118) General and administrative expense (866) (9,964) (9,300) Depreciation and amortization (2,187) (3,872) (4,438) Interest income 242 1,350 486 Interest expense (3,170) (1,677) (2,549) Other income 368 1,426 482 Other expense (337) (757) (532) Income before equity in net earnings of affiliate companies 2,569 50,549 95,303 Equity in net earnings of affiliate companies 128 788 613 Net income $2,697 $51,337 $95,916 Net income per share: Basic $0.068 $1.287 $2.404 Diluted $0.054 $1.043 $2.404 NAVIOS MARITIME HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (in thousands of US Dollars) Successor Predecessor September 30, December 31, 2005 2004 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $133,289 $46,758 Restricted cash 4,159 3,513 Accounts receivable - net of allowance for doubtful accounts of $7 as at September 30, 2005 and $2,291 as at December 31, 2004 13,181 15,200 Short term derivative assets 35,475 109,310 Short term backlog asset 5,246 - Prepaid voyage costs 5,833 11,120 Prepaid expenses and other current assets 1,876 2,043 Total current assets 199,059 187,944 Vessels, net 194,270 116,231 Port terminal assets, net 26,633 20,973 Other fixed assets, net 894 995 Fixed assets under construction - 2,794 Deposit on exercise of vessel purchase option 1,869 - Long term derivative assets 2,746 708 Long term backlog asset 9,066 - Deferred financing costs, net 8,984 425 Deferred dry dock and special survey costs, net 865 435 Investment in affiliates 500 557 Trade name 89,723 2,004 Other fixed operating rights, net 30,924 - Favorable leases terms 62,770 - Vessel purchase options 76,010 - Goodwill 39,429 226 Total noncurrent assets 544,683 145,348 Total Assets $743,742 $333,292 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $8,499 $14,883 Accrued expenses 7,287 7,117 Deferred voyage revenue 9,445 15,135 Short term derivative liability 21,697 65,392 Short term backlog liability 6,052 - Current portion of long term debt 175,500 1,000 Total current liabilities 228,480 103,527 Long term liabilities 2,544 3,024 Long term derivative liability 2,717 2,444 Long term backlog liability 6,052 Long term debt, net of current portion 317,000 49,506 Total noncurrent liabilities 328,313 54,974 Total liabilities 556,793 158,501 Commitments and Contingencies - - Stockholders' Equity: Successor: Preferred Stock - $0.0001 per value, authorized 1,000,000 shares, none issued Common Stock - $0.0001 par value, authorized 20,000,000, issued and outstanding 39,900,000 4 Additional paid-in capital 184,248 Retained earnings 2,697 Predecessor: Common Stock, $0.10 par value - authorized, issued and outstanding, 874,584 shares 87 Additional Paid-in Capital 60,570 Legal Reserve (Restricted) 289 Retained earnings 113,845 Total stockholders' equity 186,949 174,791 Total Liabilities and Stockholders' Equity $743,742 $333,292 NAVIOS MARITIME HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOW (in thousands of US Dollars) Successor Predecessor Predecessor August 26, January 1, January 1, 2005 To 2005 To 2004 To Sept. 30, August 25, Sept. 30, 2005 2005 2004 (Unaudited) (Unaudited) (Unaudited) OPERATING ACTIVITIES: Net income $2,697 $51,337 $95,916 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,187 3,872 4,438 Amortization of dry dock 32 160 188 Amortization of deferred financing cost 159 425 396 Amortization of backlog (80) - - Provision for losses on accounts receivable 7 (880) (556) Unrealized loss on FFA derivatives 8,775 23,793 8,863 Unrealized (gain)/loss on foreign exchange contracts (120) 338 133 Unrealized (gain)/loss on interest rate swaps (138) (403) 388 Earnings in affiliates, net of dividends received (128) 185 86 Changes in operating assets and liabilities: (Increase) decrease in restricted cash 360 (1,005) 61 (Increase) decrease in accounts receivable (8,267) 11,768 3,228 Decrease in prepaid voyage costs 1,632 3,704 6,441 (Increase) decrease in prepaid expenses and other assets (6) 58 116 Decrease in accounts payable (6,709) (10,172) (4,105) Increase (decrease) in accrued expenses (896) (1,229) 1,124 Decrease in deferred voyage revenue (658) (5,032) (4,819) Decrease in long term liabilities (28) (451) (475) Increase (decrease) in derivative accounts 653 (4,523) 1,243 Net cash provided by operating activities (528) 71,945 112,666 INVESTING ACTIVITIES: Deposit on exercise of vessel purchase option (1,869) - - Deferred drydock and special survey costs (14) - - Purchase of property and equipment - (4,264) (3,475) Cash received from downstream merger 102,259 Net cash used in investing activities 100,376 (4,264) (3,475) FINANCING ACTIVITIES: Repayment of long term debt (21,870) (50,506) (4,870) Acquisition of common stock - - (9,000) Redemption of preferred stock - - (15,189) Repayment of stockholder loans (8,622) - - Net cash used in financing activities (30,492) (50,506) (29,059) Increase in cash and cash equivalents 69,356 17,175 80,132 Cash and cash equivalents, beginning of the period 63,933 46,758 26,450 Cash and cash equivalents, end of period $133,289 $63,933 $106,582 EBITDA EBITDA represents operating earnings before extraordinary items, depreciation and amortization, net interest expense, and income taxes, if any. EBITDA is included because it is used by certain investors to measure a company's financial performance. EBITDA is not an item recognized by US GAAP and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. EBITDA is presented to provide additional information with respect to the Company's ability to satisfy its obligations including debt service, capital expenditures, and working capital requirements. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation. EBITDA Reconciliation to Cash From Operations Three Months Ended September 30, (in thousands of US Dollars) Successor Predecessor Predecessor August 26, July 1, Three months 2005 To 2005 To Ended Sept. 30, August 25, Sept. 30, 2005 2005 2004 (Unaudited) (Unaudited) (Unaudited) Net Cash provide by operating activities (528) 22,298 45,152 Net increase (decrease) in operating assets 6,281 (14,811) (7,243) Net increase (decrease) operating liabilities 7,638 6,664 (128) Net interest cost 2,928 69 (817) Provision for losses on accounts receivable (7) - 353 Unrealized gain (loss) on FFA derivatives, FEC's and Interest rate swaps (8,517) 1,581 (8,920) Earnings in affiliates, net of dividends received 128 (342) (14) EBITDA $7,923 $15,459 $28,383 Nine Months Ended September 30, (in thousands of US Dollars) Successor Predecessor Predecessor Aug. 26, January 1, Nine months 2005 To 2005 To Ended Sept. 30, August 25, Sept. 30, 2005 2005 2004 (Unaudited) (Unaudited) (Unaudited) Net Cash provide by operating activities (528) 71,945 112,666 Net increase (decrease) in operating assets 6,281 (14,525) (9,846) Net increase (decrease) operating liabilities 7,638 21,407 7,032 Net interest cost 2,928 198 623 Provision for losses on accounts receivable (7) 880 556 Unrealized gain (loss) on FFA derivatives, FEC's and Interest rate swaps (8,517) (23,728) (9,384) Earnings in affiliates, net of dividends received 128 (185) (86) EBITDA $7,923 $55,992 $101,561 Dividend Policy Navios's Board of Directors has indicated its intention to declare a quarterly cash dividend of $0.0666 per common share in respect of the fourth quarter subject to, among other things, finalizing the financing for vessels being acquired. Ms Frangou stated "I am pleased that we have announced our dividend policy - we are mindful of our shareholders' need for both a current return as well as long-term growth which can be achieved by retaining adequate cash flow to build our core fleet." About Navios Maritime Holdings Inc. Navios Maritime Holdings, Inc. is one of the leading global brands in seaborne dry bulk shipping and is a trusted partner for industrial end users, shipowners, financial business partners, agents and brokers. As a public company, Navios is committed to providing best-in-class service to both customers and business partners. Navios maintains offices in Piraeus, Greece; South Norwalk, Connecticut; and Montevideo, Uruguay. Navios's stock is listed on the NASDAQ where it trades under the symbols "BULK," "BULKU," and "BULKW." Risks and uncertainties are described in reports filed by Navios Maritime Holdings Inc. with the United States Securities and Exchange Commission. Safe Harbor This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Maritime Holdings Inc. (Navios). Forward looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of Navios's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. The information set forth herein should be read in light of such risks. Navios does not assume any obligation to update the information contained in this press release. Public & Investor Relations Contact: Navios Maritime Holdings Inc. Investor Relations 212-279-8820 DATASOURCE: Navios Maritime Holdings Inc. CONTACT: Public & Investor Relations: Navios Maritime Holdings Inc., Investor Relations, +1-212-279-8820, or

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