ATHENS, Greece, June 5 /PRNewswire-FirstCall/ -- TOP Ships Inc. (NasdaqGS: TOPS) today announced its operating results for the first quarter ended March 31, 2009. For the three months ended March 31, 2009, the Company reported net income of $1,370,000, or $0.05 per share basic and diluted compared with net loss of $18,841,000, or $0.93 per share, for the first quarter of 2008. The weighted average numbers of common shares used in the computations were 27,522,092 and 20,295,240 for the first quarter of 2009 and 2008, respectively. For the three months ended March 31, 2009, operating income was $2,357,000, compared with operating loss of $2,434,000 for the first quarter of 2008. Revenues for the first quarter of 2009 were $29,793,000, compared to $72,637,000 recorded in the first quarter of 2008. Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc., commented: We are happy to report one more profitable quarter in a very challenging economic environment. Some of the most important developments that have taken place until today are the following: -- As of March 31, 2009, we were not in compliance with certain loan covenants under our loan agreements. We have received or agreed to receive waivers on covenant breaches until 31 March 2010 from four out of five banks, representing approximately 85% of our total indebtedness. -- Specifically, we have received waivers from HSH Nordbank and Alpha Bank on certain covenant breaches until 31 March 2010, representing approximately 54.6% of our total indebtedness. -- We have agreed to receive waivers, subject to completion of legal documentation, from DVB and Emporiki Bank on covenant breaches until 31 March 2010, representing 30.6% of our total indebtedness. -- We are currently in discussions with RBS regarding waivers until 31 March 2010. -- We took delivery of five out of six of our newbuilding product tankers. Our final newbuilding is scheduled to be delivered during the second quarter of 2009. -- In April 2009, we agreed with the owners of the M/T Relentless to terminate the bareboat charter. Under this agreement, during the 3rd quarter of 2009 we will redeliver the M/T Relentless to its owners and pay a termination fee of $2.5m. The bareboat charter would have expired in 2012. -- Finally we are continuing our efforts to unwind the remaining bareboat charter-in contracts in order to further reduce our leasing expenditure." The following key indicators serve to highlight changes in the financial performance of the Company's vessels during the first quarters of 2008 and 2009: Tanker Fleet Three Months Ended March 31, (In U.S. Dollars unless ---------------------------- otherwise stated) 2008 2009 Change ---- ---- ------ Total available ship days 1,698 727 -57.2% Total operating days 1,345 636 -52.7% Utilization of vessels operating SPOT or under TCs 79.2% 85.6% 8.0% TCE per ship per day under spot voyage charter 47,462 - - TCE per ship per day under time charter 25,746 17,204 -33.2% Average revenues per day under Bareboat charters - 13.990 - Drybulk Fleet Three Months Ended March 31, (In U.S. Dollars unless ---------------------------- otherwise stated) 2008 2009 Change ---- ---- ------ Total available ship days 390 450 15.4% Total operating days 385 434 12.7% Utilization of vessels operating SPOT or under TCs 98.5% 95.6% -3.0% TCE per ship per day under spot Voyage charters - - - TCE per ship per day under time charter 51,074 40,590 -20.5% Average revenues per day under bareboat charters 51,567 49,489 -4.0% Fleet Report: As of March 31, 2009, the Company's fleet consisted of sixteen vessels, or 0.9 million dwt (including eleven owned and five vessels sold and leased back for a period of five to seven years) as compared to twenty three vessels, or 2.1 million dwt on March 31, 2008 (including twelve owned, one under capital lease and ten vessels sold and leased back for a period of five to seven years). On February, 2009, the Company took delivery of the vessels Miss Marilena and Lichtenstein from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Miss Marilena and Lichtenstein are the two out of six 50,000 dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Miss Marilena and Lichtenstein entered into a bareboat time-charter employment for a period of ten years at a daily rate of $14,400 and $14,550, respectively. On March 19, 2009, the Company took delivery of the vessels Ionian Wave and Tyrrhenian Wave from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Ionian Wave and Tyrrhenian Wave are the third and fourth out of six 50,000dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Ionian Wave and Tyrrhenian Wave entered into a bareboat time-charter employment for a period of seven years at a daily rate of $14,300, with three successive one-year options at a higher daily rate. On May 22, 2009, the Company took delivery of the vessel Britto from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Britto is the fifth out of six 50,000dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Britto entered into a bareboat time-charter employment for a period of ten years at a daily rate of $14,550. Fleet Deployment: Tanker Vessels: During the first quarter of 2009, seven of the Company's Handymax tankers operated under long-term employment contracts that provide for a base rate and additional profit sharing earning on average $17,204 per vessel per day on a time charter equivalent (TCE) basis, including profit-sharing allocated to the Company and four under bareboat charter earning on average $13,990 per vessel per day. Drybulk Vessels: During the first quarter of 2009, four of the Company's drybulk vessels operated under time charter contracts earning on average $40,590 per vessel per day on a time charter equivalent (TCE) basis and one under bareboat charter earning on average $49,489 per vessel including the amortization of the fair value of acquired time charter contracts of $26,077 per vessel per day. The following table presents the Company's current fleet list and employment: Year Daily Dwt Built Charter Type Expiry Base Rate 12 Handymax Tankers Relentless(A) 47,084 1992 Time Charter Q2/2009 $14,000 Vanguard(B) 47,084 1992 Time Charter Q1/2010 $15,250 Spotless(B) 47,094 1991 Time Charter Q1/2010 $15,250 Doubtless(B) 47,076 1991 Time Charter Q1/2010 $15,250 Faithful(B) 45,720 1992 Time Charter Q2/2010 $14,500 Dauntless(C) 46,168 1999 Time Charter Q1/2010 $16,250 Ioannis P(C). 46,346 2003 Time Charter Q4/2010 $18,000 Miss Marilena(C) 50,000 2009 Bareboat Charter Q1-2/2019 $14,400 Lichtenstein(C) 50,000 2009 Bareboat Charter Q1-2/2019 $14,550 Ionian Wave(C) 50,000 2009 Bareboat Charter Q1-2/2016 $14,300 Thyrrhenian Wave(C) 50,000 2009 Bareboat Charter Q1-2/2016 $14,300 Britto(C) 50,000 2009 Bareboat Charter Q1-2/2019 $14,550 1 Newbuilding Product Tanker Hull S-1033 50,000 2009 Bareboat Charter Q1-2/2019 $14,550 Total Tanker dwt 626,572 5 Drybulk Vessels Cyclades(C) 75,681 2000 Time Charter Q2/2011 $54,250 Amalfi(C) 45,526 2000 Time Charter Q2/2009 $10,000 Voc Gallant(C) 51,200 2002 Bareboat Charter Q2/2012 $24,000 Pepito(C) 75,928 2001 Time Charter Q2/2013 $41,000 Astrale(C) 75,933 2000 Time Charter Q2/2009 $12,000 Total Drybulk dwt 324,268 TOTAL DWT 950,840 Profit Sharing Above Base Rate (2009) --------------- 12 Handymax Tankers Relentless(A) 50% thereafter Vanguard(B) 50% thereafter Spotless(B) 50% thereafter Doubtless(B) 50% thereafter Faithful(B) 100% first $500 + 50% thereafter Dauntless(C) 100% first $1,000 + 50% thereafter Ioannis P(C). 100% first $1,000 + 50% thereafter Miss Marilena(C) None Lichtenstein(C) None Ionian Wave(C) None Thyrrhenian Wave(C) None Britto(C) None 1 Newbuilding Product Tanker Hull S-1033 None Total Tanker dwt 5 Drybulk Vessels Cyclades(C) None Amalfi(C) None Voc Gallant(C) None Pepito(C) None Astrale(C) None A. Vessel sold and leased back in September 2005 for a period of 7 years. B. Vessels sold and leased back in March 2006 for a period of 5 years. C. Owned vessels. Liquidity and Capital Resources Since the Company's formation, the sources of funds have been cash from operations, long-term borrowings and equity provided by the shareholders. The Company's principal use of funds has been capital expenditures to establish and grow its fleet, maintain the quality of its vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and make principal repayments on outstanding served loan facilities. The Company expects to rely upon operating cash flows, long-term borrowings and equity financings to implement its future growth plan. As of March 31, 2009, the Company had total indebtedness under senior secured credit facilities of $398.3 million (excluding unamortized financing fees of $4.3 million) with its lenders, the Royal Bank of Scotland ("RBS"), HSH Nordbank ("HSH"), DVB Bank ("DVB"), Alpha Bank ("ALPHA") and Emporiki Bank ("EMPORIKI"), maturing from 2013 through 2019. The Company's non-restricted cash as of March 31, 2009 was $13.3 million. Loan Covenants and Discussions with Banks As at March 31, 2009, the Company was not in compliance with certain of its loan covenants. As of the date of this release, the Company had received certain waivers on these covenant breaches until 31 March 2010 from HSH Nordbank and Alpha Bank, representing approximately 54.6% of total indebtedness as set forth below HSH Nordbank The Company has entered into amendatory agreements with HSH Nordbank under its Bulker Financing Facility, initial amount of $95m / outstanding as of March 31, 2009 of $51.1m, and the Product Tanker Financing Facility, initial amount of $121m / outstanding as of March 31, 2009 of $92.8m. These amendatory agreements mainly provide for: (1) waiver regarding financial covenants through March 31, 2010, except for adjusted net worth for which a waiver has not been received yet (2) waiver for asset coverage covenants through March 31, 2010 (3) an increased applicable margin; (4) an amendment fee; (5) cross collateralisation of the two facilities. Alpha Bank The Company has entered into amendatory agreements with Alpha Bank under its Bulker Financing Facility, initial amount of $48m / outstanding as of March 31, 2009 of $34.8m, and the Product Tanker Financing Facility of $39m. These amendatory agreements mainly provide for: (1) a waiver regarding financial and asset coverage covenants through March 31, 2010; (2) an increased applicable margin; (3) cross collateralisation of the two facilities. In addition, the Company has agreed with DVB and Emporiki Bank to receive waivers until 31 March 2010, representing approximately 30.6% of total indebtedness. The agreements are preliminary and are subject to execution of definitive documents whereby certain terms of the existing financing agreements, will be amended. Finally, the Company is currently in discussions with RBS in order to receive waivers until 31 March 2010. The outcome of these discussions remains unknown. Due to the fact that the Company has not yet reached definitive agreements with all its banks with regards to covenant breaches, it has in this release an unclassified balance sheet which does not show a breakdown of its debt and swap facilities into current and long term. If the Company receives waivers from all its lenders then the debt and swap facilities would be classified as current and long term portions based on when the installments fall due. If the Company cannot obtain covenant waivers from all of its lenders, all outstanding loan balances will be classified as current as a result of cross default covenants attached to all loan agreements. In addition, the Company may be in non-compliance with these or other covenants, such as minimum liquidity, in future quarters to the extent it has not received waivers for such non-compliance. If the Company is not able to obtain covenant waivers or modifications, for current covenant breaches or for covenant breaches that may occur in future reporting periods, its lenders may require the Company to post additional collateral, enhance its equity and liquidity, increase its interest payments or pay down its indebtedness to a level where it is in compliance with its loan covenants, sell vessels, or they may accelerate its indebtedness, which would impair its ability to continue to conduct its business. In order to further enhance its liquidity, the Company may find it necessary to sell vessels at a time when vessel prices are low, in which case it will recognize losses and a reduction in its earnings, which could affect its ability to raise additional capital necessary for the Company to comply with its loan covenants and/or the additional lender requirements described above. Conference Call and Webcast Top Ships' management team will host a conference call to review the results and discuss other corporate news and its outlook on Friday, June 5, 2009, at 11:00 AM ET. Those interested in listening to the live webcast may do so by going to the Company's website at http://www.topships.org/, or by going to http://www.investorcalendar.com/. The telephonic replay of the conference call will be available by dialling 1-877-660-6853 (from the US and Canada) or +1-201-612-7415 (from outside the US and Canada) and by entering account number 286 and conference ID number 319023. An online archive will also be available immediately following the call at the sites noted above. Both are available for one week, through June 5, 2009. About TOP Ships Inc. TOP Ships Inc., formerly known as TOP Tankers Inc., is an international provider of worldwide seaborne crude oil and petroleum products and drybulk transportation services. The Company operates a combined tanker and drybulk fleet as follows: -- A fleet of twelve double-hull handymax tankers, with a total carrying capacity of approximately 0.6 million dwt, of which 76% are sister ships. Seven of the Company's handymaxes are on time charter contracts with an average term of ten months with all of the time charters including profit sharing agreements above their base rates. Five of the Company's handymax tankers are fixed on a bareboat charter basis with an average term of eight and a half years. -- One newbuilding product tanker, which is expected to be delivered in 2009. The expected newbuilding has fixed rate bareboat employment agreement for a period of ten years. -- A fleet of five drybulk vessels with a total carrying capacity of approximately 0.3 million dwt, of which 47% are sister ships. All of the Company's drybulk vessels have fixed rate employment contracts for an average period of 23 months. Forward Looking Statement Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. Important factors that, in our view, could affect the matters discussed in these forward-looking statements include, general market conditions, including fluctuations in charter rates and vessel values, changes in the demand for our vessels, offers that may be received from third parties, potential liability from pending or future litigation, general domestic and international political conditions, and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. Contact: Michael Mason (investors) Alexandros Tsirikos Allen & Caron Inc TOP Ships Inc. 212 691 8087 011 30 210 812 8180 TABLES FOLLOW TOP SHIPS INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Expressed in thousands of U.S. Dollars - except for share and per share data) Three Months Ended March 31, 2008 2009 (Unaudited) (Unaudited) REVENUES: Revenues $72,637 $29,793 EXPENSES: Voyage expenses 10,324 1,150 Charter hire expense 17,988 5,787 Amortization of deferred gain on sale and leaseback of vessels (1,297) (808) Other vessel operating expenses 25,842 8,653 Dry-docking costs 4,049 1,263 Depreciation 10,510 6,340 General and administrative expenses 7,705 5,060 Foreign currency (gains) / losses, net 532 (9) Gain on sale of vessels (582) - Operating income (loss) (2,434) 2,357 OTHER INCOME (EXPENSES): Interest and finance costs (7,983) (2,271) Gain / (loss) on financial instruments (8,822) 1,205 Interest income 430 189 Other, net (32) (110) Total other expenses, net (16,407) (987) Net Income (loss) $(18,841) $1,370 Earnings (loss) per share, basic and diluted $(0.93) $0.05 Weighted average common shares outstanding, basic 20,295,240 27,522,092 Weighted average common shares outstanding, diluted 20,295,240 27,522,092 TOP SHIPS INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Expressed in thousands of U.S. Dollars - except for share and per share data) December 31, March 31, 2008 2009 ASSETS (Unaudited) (Unaudited) CASH AND CASH EQUIVALENTS $46,242 $13,273 ADVANCES FOR VESSELS ACQUISITIONS / UNDER CONSTRUCTION 159,971 60,199 VESSELS, NET 414,515 605,432 RESTRICTED CASH 52,575 38,343 OTHER ASSETS 25,072 23,156 Total assets $698,375 $740,403 LIABILITIES AND STOCKHOLDERS' EQUITY FINANCIAL INSTRUMENTS 16,438 14,373 FAIR VALUE OF BELOW MARKET TIME CHARTER 3,911 1,565 BANK DEBT 342,479 393,928 DEFERRED GAIN ON SALE AND LEASEBACK OF VESSELS 15,479 14,902 OTHER LIABILITIES 28,017 22,487 Total liabilities 406,324 447,255 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY 292,051 293,148 Total liabilities and stockholders' equity $698,375 $740,403 TOP SHIPS INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Expressed in thousands of U.S. Dollars) Three Months Ended March 31, 2008 2009 (Unaudited) (Unaudited) Cash Flows from (used in) Operating Activities: Net income (loss) $(18,841) $1,370 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,087 6,696 Stock-based compensation expense 483 459 Change in fair value of financial instruments 8,859 (2,065) Amortization of deferred gain on sale and leaseback of vessels (1,297) (808) Amortization of fair value below market time charter (6,099) (2,347) Loss on sale of other fixed assets 25 93 Gain on sale of vessels (582) - Change in operating assets and liabilities 13,634 1,006 Net Cash from (used in) Operating Activities 8,269 4,404 Cash Flows from (used in) Investing Activities: Principal payments received under capital lease 3,700 - Principal payments paid under capital lease (928) - Advances for vessels acquisitions / under construction (14,768) (19,504) Vessel acquisitions and improvements (115,747) (77,735) Insurance claims recoveries 125 151 Increase in restricted cash (3,500) - Decrease in restricted cash - 14,232 Net proceeds from sale of vessels 47,867 - Net proceeds from sale of other fixed assets 49 197 Acquisition of other fixed assets (520) (295) Net Cash from (used in) Investing Activities (83,722) (82,954) Cash Flows from (used in) Financing Activities: Proceeds from long-term debt 100,180 74,165 Payments of long-term debt (42,085) (22,799) Financial instrument termination payments (5,000) Cancellation of fractional shares (2) - Repurchase and cancellation of common stock - (732) Payment of financing costs (277) (53) Net Cash from (used in) Financing Activities 57,816 45,581 Net increase (decrease) in cash and cash equivalents (17,637) (32,969) Cash and cash equivalents at beginning of period 26,012 46,242 Cash and cash equivalents at end of period $8,375 $13,273 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES Fair value below market time charter $12,647 $12,647 Amounts owed for capital expenditures $2,469 $289 DATASOURCE: TOP Ships Inc. CONTACT: Michael Mason (investors) of Allen & Caron Inc, +1-212-691-8087, , for TOP Ships Inc.; or Alexandros Tsirikos of TOP Ships Inc., 011 30 210 812 8180, Web Site: http://www.topships.org/

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