EX-99.1 2 f110810sbex991.htm Converted by EDGARwiz

Exhibit 99.1


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Safe Bulkers, Inc. Reports Third Quarter and Nine Months Ended September 30, 2010 Results and Declares Quarterly Dividend



Athens, Greece – November 8, 2010 -- 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 periods ended September 30, 2010. The Company also declared a quarterly dividend of $0.15 per share for the third quarter of 2010.



Summary of Third Quarter 2010 Results

·

Net revenue for the third quarter of 2010 increased by 11% to $40.8 million from $36.9 million during the same period in 2009.

·

Net income for the third quarter of 2010 decreased by 1% to $22.0 million from $22.2 million during the same period in 2009.

·

EBITDA1 for the third quarter of 2010 increased by 8% to $28.6 million from $26.5 million during the same period in 2009.

·

Earnings per share for the third quarter 2010 equaled $0.33, calculated on weighted average number of shares of 65,874,601, compared to $0.41 in the third quarter 2009, calculated on weighted average number of shares of 54,512,014.

·

Declaration of a dividend of $0.15 per share for the third quarter of 2010.


Summary of Nine Months Ended September 30, 2010 Results

·

Net revenue for the nine months ended September 30, 2010 decreased by 10% to $115.7 million from $128.0 million during the same period in 2009.

·

Net income for the nine months ended September 30, 2010 decreased by 45% to $78.5 million from $142.2 million during the same period in 2009.  

·

EBITDA for the nine months ended September 30, 2010, decreased by 40% to $95.5 million from $159.2 million during the same period in 2009.

·

Earnings per share for the nine months ended September 30, 2010 equaled $1.26, calculated on weighted average number of shares of 62,431,775 compared to $2.61 in the nine months ended September 30, 2009, calculated on weighted average number of shares of 54,509,508.


Fleet and Employment Profile


The Company’s operational fleet as of September 30, 2010, was comprised of 15 drybulk vessels with an average age of 3.80 years. The Company has contracted for seven additional drybulk newbuild vessels with deliveries scheduled at various times through 2013. The newbuilds consist of three Post-Panamax, two Kamsarmax, one Panamax and one Capesize vessel.


As of November 1, 2010, the contracted employment of the Company’s fleet was 85% of fleet ownership days for the remaining days of 2010, 68% for 2011, 58% for 2012 and 52% for 2013, including vessels which will be delivered to us in the future.


In August 2010, we entered into a new period time charter for the Kanaris, a 177,000 dwt Capesize class vessel, for a minimum duration of 12 months and a maximum duration of 14 months, at a gross daily charter rate of $31,000, less 5% total commissions. Upon the completion of this new period time charter, the vessel will commence a 20-year period time charter under a contract the Company entered into in 2008.


In October 2010, we entered into a new period time charter for the Maria, a 76,000 dwt Panamax class vessel, for a duration of 34 months to 36 months, with a forward delivery date in second quarter of 2011, at a gross daily charter rate of $20,250 less 3.5% total commissions.



Dividend Declaration


The Company declared a cash dividend on its common stock of $0.15 per share payable on or about November 26, 2010 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 19, 2010.


The Company had 65,876,507 shares of common stock outstanding as of November 1, 2010.


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 availability, (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: “As we head towards the year end our attention is focused on increasing our charter coverage for future periods. Our charter coverage has reached 85% for the remainder of this year and 68% for 2011. We believe our strong balance sheet provides us with considerable financial flexibility. We continue to monitor market condition for further acquisition opportunities. At the same time, we have paid our tenth consecutive quarterly dividend, in line with our dividend policy.”



Conference Call


On Tuesday, November 9, 2010 at 09:00 A.M. EST, 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 November 19, 2010 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 2010 Results


Net income decreased by 1% to $22.0 million for the third quarter of 2010 from $22.2 million for the third quarter of 2009. This decrease is mainly attributable to the following factors:


Net revenues: Net revenues were $40.8 million for the third quarter of 2010, an 11% increase compared to $36.9 million for the third quarter of 2009. Net revenues increased due to an increase in operating days. The Company operated 15.0 vessels on average during the third quarter of 2010, earning a Time Charter Equivalent (“TCE”)2 rate of $29,605, compared to 13.2 vessels and a TCE rate of $30,113 during the third quarter of 2009.  The decrease in the TCE rate resulted mainly from lower time charter rates.


Vessel operating expenses: Vessel operating expenses increased 18% to $5.9 million for the third quarter of 2010, compared to $5.0 million for the same period in 2009. The increase is mainly attributed to increased crew, repairs, maintenance and spare parts costs. Such costs increased mainly due to an increase in ownership days to 1,380 or 13% in the third quarter of 2010 from 1,218 in the third quarter of 2009, and higher drydocking costs due to the timing of the drydock. Daily vessel operating expenses for the same periods, increased by 4% to $4,294 for the third quarter 2010, compared to $4,130 for the third quarter of 2009.


Early redelivery income/(cost): During the third quarter of 2010, we recorded $0.2 million of early redelivery cost mainly related to the early termination of a period time charter for our vessel Maria, versus $2.9 million of early redelivery income relating to the early termination of period time charters of our vessels Pedhoulas Leader and Stalo for the same period in 2009. Maria was redelivered early at our request on August 24, 2010, instead of November 30, 2010, the latest agreed redelivery date at the charterer’s option, as per the relevant charter party agreement.  In connection with the early redelivery of Maria, we paid cash compensation of $0.2 million to the relevant charterer.


(Loss)/Gain on derivatives: Loss on derivatives decreased to $3.9 million in the third quarter of 2010, compared to $6.0 million for the same period in 2009, 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 hedged the interest rate exposure of 89.6% of the Company’s aggregate loans outstanding for a weighted average remaining period of swap contracts of 2.3 years as of September 30, 2010.  The valuation of these interest rate swap transactions at the end of each quarter is affected by the prevailing interest rates at that time.


Depreciation: Depreciation increased to $5.2 million in the third quarter of 2010, compared to $3.4 million for the same period in 2009, as a result of the increase in the average number of vessels operated by the Company during the third quarter of 2010.


Cash, time deposits & restricted cash: As of September 30, 2010, we had $136.8 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. Additionally, we have $24.0 million in an undrawn loan commitment to be secured by our vessel Panayiota K.



Management Discussion of the Nine Months Ended September 30, 2010 Results


Net revenues:  Net revenues for the nine months ended September 30, 2010, decreased by 10% to $115.7 million from $128.0 million during the same period in 2009.  The Company operated 14.4 vessels on average during the first nine months of 2010, earning a TCE rate of $29,583, compared to 12.9 vessels and a TCE rate of $36,241 during the first nine months of 2009.


Net income: Net income for the nine months ended September 30, 2010, was $78.5 million, a decrease of 45% from net income of $142.2 million in the first nine months of 2009.   The decrease of $63.7 million is mainly attributed to: (i) early redelivery income of $0.1 million compared to $75.0 million, (ii) zero loss on asset cancellations compared to $20.7 million, (iii) gain on sale of assets of $15.2 million, compared to none, (iv) loss from derivatives of $13.0 million, compared to loss from derivatives of $3.2 million and (v) net revenue of $115.7 million compared to $128.0 million, during the first nine months of 2010 and 2009 respectively.  





Unaudited Interim Financial Information and Other Data


SAFE BULKERS, INC.
UNAUDITED CONDENSED CONSOLIDATED  STATEMENTS OF OPERATIONS  

 

Three-Month Period

Ended September 30,

Nine-Month Period

Ended September 30,

(In thousands of U.S. Dollars, except for share and per share data)

2009

2010

2009

2010

REVENUES:

 

 

 

 

  Revenues

37,791

41,599

130,965

117,790

Commissions

(885)

(767)

(2,927)

(2,057)

Net revenues

36,906

40,832

128.038

115,733

 

 

 

 

 

EXPENSES:

 

 

 

 

Voyage expenses

(261)

(184)

(480)

(476)

Vessel operating expenses

(5,030)

(5,926)

(14,408)

(16,838)

Depreciation

(3,409)

(5,242)

(9,952)

(14,252)

General and administrative expenses

(1,774)

(1,945)

(5,502)

(5,008)

Early redelivery income/(expense)-net

2,887

(193)

74,951

132

Loss on asset cancellations

-

-

(20,699)

-

Gain on sale of asset

-

-

-

15,199

Operating income

29,319

27,342

151,948

94,490

 

 

 

 

 

 

 

 

 

 

OTHER (EXPENSE) / INCOME:

 

 

 

 

Interest expense

(1,941)

(1,754)

(8,819)

(4,771)

Other finance costs

(143)

(49)

(391)

(183)

Interest income

1,025

474

1,866

2,246

Loss on derivatives

(6,006)

(3,928)

(3,175)

(13,046)

Foreign currency (loss)/gain

(57)

(16)

903

(6)

Amortization and write-off of deferred finance charges

(38)

(60)

(86)

(215)

Net income

22,159

22,009

142,246

78,515

Earnings per share

0.41

0.33

2.61

1.26

Weighted average number of shares

54,512,014

65,874,601

54,509,508

62,431,775





SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)




 (In thousands of U.S. Dollars)

December 31, 2009

September 30, 2010

ASSETS



 



Cash, time deposits & restricted cash

76,322

136,791

Restricted cash

6,392

-

Asset held for sale

16,969

-

Other current assets

5,965

3,822

Total fixed assets

467,513

590,448

Long-term investment

50,000

50,000

Restricted cash: non-current

4,763

5,423

Other non-current assets

800

950

Total assets

628,724

787,434

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current portion of long-term debt

15,742

25,137

Liability directly associated with asset held for sale

34,500

-

Other current liabilities

15,309

17,491

Long-term debt, net of current portion

420,994

472,070

Other non-current liabilities

44,960

49,887

Shareholders’ equity

97,219

222,849

Total liabilities and equity

628,724

787,434

 

 

 

 






Fleet Data


 

 

Three Months Ended
September 30,

 

 Nine Months Ended
September 30,

 

2009

 

2010

 

2009

 

2010

 

 

 

 

 

 

 

 

FLEET DATA

 

 

 

 

 

 

 

Number of vessels at period end

14.00

 

15.00

 

14.00

 

15.00

Average age of fleet (in years)

3.54

 

3.80

 

3.54

 

3.80

Ownership days (1)

1,218

 

1,380

 

3,529

 

3,917

Available days (2)

1,217

 

1,373

 

3,520

 

3,896

Operating days (3)

1,202

 

1,372

 

3,505

 

3,870

Fleet utilization (4)

98.7%

 

99.4%

 

99.3%

 

98.8%

Average number of vessels in the period (5)

13.24

 

15.00

 

12.93

 

14.35


AVERAGE DAILY RESULTS

 

 

 

 

 

 

 

Time charter equivalent rate (6)

$30,113

 

$29,605

 

$36,241

 

$29,583

Daily vessel operating expenses (7)

$4,130

 

$4,294

 

$4,083

 

$4,299

_____________


(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.




EBITDA RECONCILIATION

(In thousands of U.S. Dollars)

 

Three Months Ended
September 30,

Nine Months Ended
September 30,

 

2009

2010

2009

2010

 

 

 

 

 

Net Income

22,159

22,009

142,246

78,515

Plus Net Interest Expense

916

1,280

6,953

2,525

Plus Depreciation

3,409

5,242

9,952

14,252

Plus Amortization

38

60

86

215

EBITDA

26,522

28,591

159,237

95,507


 

EBITDA represents net income before interest, income tax expense, depreciation and amortization. EBITDA is not a recognized measurement under US GAAP. EBITDA assists 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 information. The Company believes that EBITDA is 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, items which may vary for different companies for reasons unrelated to overall operating performance.

 

EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the Company’s results as reported under US GAAP. EBITDA should not be considered a substitute for net income and other operations data prepared in accordance with US GAAP or as a measure of profitability. While EBITDA is frequently used as a measure of operating results and performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.


 




Fleet Employment Profile as of November 1, 2010

Set out below is a table showing our existing vessels and their contracted employment.

 

Vessel Name

DWT

Year Built

Charter Rate (a) USD/day

Charter Duration (b)

Maria

76,000

2003

    17,750

    20,250

Sep 2010 – Apr 2011 Apr 2011 – Apr 2014

Vassos

76,000

2004

29,000

Nov 2008 – Oct 2013

Katerina

76,000

2004

15,500

20,000

Jun 2009 – Jan 2011

Mar 2011 – Mar 2014

Maritsa

76,000

2005

28,000 (c)

Mar 2010 – Mar 2015

Pedhoulas Merchant

82,300

2006

27,250

Apr 2010 – Apr 2011

Pedhoulas Trader

82,300

2006

41,500 (d)

Aug 2008 – Jul 2013

Pedhoulas Leader

82,300

2007

18,500

Jul 2009 – Nov 2010

Stalo

87,000

2006

34,160

Mar 2010 – Feb 2015

Marina

87,000

2006

41,500 (e)

Dec 2008 – Dec 2013

Sophia

87,000

2007

34,720

Oct 2008 – Sep 2013

Eleni

87,000

2008

41,640 (f)

Nov 2008 – Mar 2015

Martine

87,000

2009

40,500

Feb 2009 – Feb 2014

Andreas K

92,000

2009

20,500

Nov 2009 – Nov 2010

Panayiota K

92,000

2010

22,750

Apr 2010 – Apr 2011

Kanaris

177,000

2010

31,000

25,928

Aug 2010 – Aug 2011

Aug 2011 – Apr 2031



(a)

Either gross charter rate or average gross charter rate for charter parties with variable rates among periods or for consecutive charter parties with the same charterer under similar basic terms.

(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)

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.

(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.

(f)

Three contracts in direct continuation, the first from Nov. 2008 to Oct. 2009 at $70,000, the second from Oct. 2009 to Mar. 2010 at $66,400 and the third from Apr. 2010 to Mar. 2015 at $34,160.



The contracted charter coverage, including newbuilds, based on Company’s best estimate as of November 1, 2010, is:

2010 (remaining) ………………..85%

2011

……………………………..68%

2012

……………………………..58%

2013

……………………………..52%



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 15 drybulk vessels, all built post-2003, and the Company has contracted to acquire seven additional drybulk newbuild vessels to be delivered at various times through 2013.


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 the 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 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:

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:

Ramnique Grewal

Vice 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




Footnotes

1 EBITDA represents net income plus interest expense, tax, depreciation and amortization. See "EBITDA    Reconciliation".

2 Refer to definition of “TCE” in Note 6 of Fleet Data Table.