EXHIBIT 99.1
Quintana Maritime Limited Pandoras 13 & Kyprou Street 166 74 Glyfada Greece |
NEWS RELEASE
QUINTANA MARITIME LIMITED REPORTS FOURTH QUARTER AND
ANNUAL 2005 RESULTS, DECLARES A DIVIDEND OF $0.21 PER
SHARE, AND DEFINES DIVIDEND POLICY
ANNUAL 2005 RESULTS, DECLARES A DIVIDEND OF $0.21 PER
SHARE, AND DEFINES DIVIDEND POLICY
ATHENS, GREECE — February 28, 2006 —Quintana Maritime Limited (NASDAQ: QMAR) today announced operating results for the fourth quarter of 2005 and for the period from January 13, 2005 (inception) to December 31, 2005. The Company was incorporated on January 13, 2005 and commenced operations on April 12, 2005.
Fourth Quarter 2005 and Full Year Results:
For the fourth quarter of 2005, Quintana reported net income of $4.7 million, or $0.20 per diluted share, based on the weighted average of 23,583,194 diluted shares outstanding for the period. Adjusted EBITDA for the quarter was $15.2 million. Quintana owned and operated an average of 9.4 vessels in the fourth quarter, as two Capesize ships were delivered during the quarter. For the fourth quarter, the full fleet earned an average time-charter-equivalent rate of approximately $25,585 per day.
The results of the quarter include a non-cash charge of $1.5 million of unamortized loan-financing costs related to the early extinguishment of a term loan facility. Excluding that charge, Quintana would have reported net income of $6.3 million, or $ 0.27 per diluted share, for the fourth quarter of 2005.
Full Year 2005 Results:
For the full year 2005, Quintana reported net income of $5.5 million, or $0.39 per diluted share, based on the weighted average of 14,239,907 diluted shares outstanding for the period. Adjusted EBITDA for 2005 was $28.6 million. There were no revenues in the first quarter of 2005. Quintana owned and operated an average of 5.0 vessels during the year, earning an average time-charter-equivalent rate of approximately $24,328 per day.
The results for year include non-cash charge of $4.7 million of unamortized loan-financing costs, which resulted from the retirement of our term loan facility. Excluding that charge, Quintana would have reported net income of $10.2 million, or $0.72 per diluted share, for the full year.
Stamatis Molaris, President and Chief Executive Officer of Quintana Maritime Limited, commented, “We have made important achievements during 2005. We have significantly grown our fleet and we have established a presence in the dry bulk market with a very modern fleet. With the addition of recent charters, our time charter coverage for 2006 has expanded, with 78.7% of net operating days secured. We have taken the technical management of our fleet in house while at the same time establishing a very competitive cost base. Quintana is well placed for 2006 and is poised to benefit from the revenue potential of the entire fleet of 10 vessels.”
During the fourth quarter 2005, Quintana took delivery of its two Capesize vessels, Iron Beauty and Kirmar. The addition of these two vessels expanded the fleet by 331,000 dwt, or 56.6%, from 585,072 dwt to 916,072 dwt.
Mr. Molaris commented, “The acquisition of these two vessels enables Quintana to focus on larger cargoes, which benefit from economies of scale, and places Quintana among the larger and most modern dry-bulk fleets of the publicly traded dry-bulk companies.”
The following key indicators highlight the Company’s financial and operating performance during the fourth quarter and full year of 2005:
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
December 31, 2005 | December 31, 2005 | |||||||||||||||||||||||
(In US Dollars per day, unless otherwise stated) | ||||||||||||||||||||||||
PANAMAX | CAPESIZE | TOTAL | PANAMAX | CAPESIZE | TOTAL | |||||||||||||||||||
2005 | 2005 | 2005 | 2005 | 2005 | 2005 | |||||||||||||||||||
Average number of ships | 8.0 | 1.4 | 9.4 | 4.7 | 0.3 | 5.0 | ||||||||||||||||||
Total Ownership days | 736 | 126 | 862 | 1,709 | 126 | 1,835 | ||||||||||||||||||
Operating days under fixed rate time charter | 636 | 121 | 757 | 1,463 | 121 | 1,584 | ||||||||||||||||||
Operating days under variable rate time charter | 91 | — | 91 | 163 | — | 163 | ||||||||||||||||||
Utilization | 98.8 | % | 95.6 | % | 98.3 | % | 95.2 | % | 95.6 | % | 95.2 | % | ||||||||||||
Time charter equivalent per ship per day — fixed rate tc | 22,635 | 43,851 | (1) | 26,332 | 23,362 | 43,851 | (1) | 25,074 | ||||||||||||||||
Time charter equivalent per ship per day — variable rate tc | 19,446 | — | 19,446 | 17,129 | — | 17,129 | ||||||||||||||||||
Net daily revenue per ship per day | 21,006 | 41,930 | 24,064 | 20,732 | 41,930 | 22,188 | ||||||||||||||||||
Vessel operating expenses per ship per day | (3,745 | ) | (3,501 | ) | (3,709 | ) | (3,732 | ) | (3,501 | ) | (3,716 | ) | ||||||||||||
Net Operating Cash Flow per ship per day before general and administrative expenses | 17,261 | 38,429 | 20,355 | 17,000 | 38,429 | 18,471 |
(1) M/V Iron Beauty was acquired with an existing time charter at an above the market rate. The company deducts the fair value of the time charter from the purchase price of the vessel and allocates it to a deferred asset which is amortized over the remaining period of the time charter as a reduction to hire revenue. This results in a daily rate of approximately $ 30,600 as recognized revenue. For cash flow purposes the company will continue to receive $ 36,500 per day less commissions.
Glossary of Terms
Average number of vesselsThis is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
Ownership daysWe define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
Operating daysWe define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to planned dry docking repairs or any other, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
Fleet utilizationWe calculate fleet utilization by dividing the number of our operating days during a period by the number of our Ownership days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.
TCE per ship per dayWe define TCE (time-charter equivalent) per ship per day rate as our voyage and time charter revenues less voyage expenses during a period divided by the number of our operating days during the period, which is consistent with industry standards. TCE rate is a shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.
Net daily revenueWe define the daily TCE rate net of commissions but including idle time.
Vessel operating expenses per ship per dayThis include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. We define as our total operating costs divided by the ownership days.
Fleet Table as of February 28, 2006
TC Expiration | ||||||||||||||||||||||||
Age (in | Date (minimum | |||||||||||||||||||||||
Vessel | Type | DWT | Year Built | yrs) | period) | TC Rates (Gross) | ||||||||||||||||||
Fearless 1(A) | Panamax | 73,427 | 1997 | 8.8 | March 2008 | $ | 25,000 | |||||||||||||||||
King Coal | Panamax | 72,873 | 1997 | 9.1 | March 2008 | $ | 26,300 | |||||||||||||||||
Coal Glory(A) | Panamax | 73,670 | 1995 | 10.9 | May 2006 | $ | 15,500 | |||||||||||||||||
Coal Age(A) | Panamax | 72,861 | 1997 | 8.6 | April 2006 | $ | 25,500 | |||||||||||||||||
July 2006 | $ | 17,500 | ||||||||||||||||||||||
Iron Man(A) | Panamax | 72,861 | 1997 | 8.6 | March 2010 | $ | 18,500 | |||||||||||||||||
Barbara(B) | Panamax | 73,390 | 1997 | 9.0 | June 2006 | 4TC Route based on Baltic Average | ||||||||||||||||||
Coal Pride | Panamax | 72,600 | 1999 | 6.2 | February 2007 | $ | 14,850 | |||||||||||||||||
Linda Leah(B) | Panamax | 73,390 | 1997 | 9.0 | June 2008 | $ | 25,000 | |||||||||||||||||
Iron Beauty( C ) | Capesize | 165,500 | 2001 | 4.5 | April 2010 | $ | 36,500 | |||||||||||||||||
Kirmar( C ) | Capesize | 165,500 | 2001 | 4.3 | February 2007 | $ | 26,250 | |||||||||||||||||
Total Fleet | 10 Vessels | 916,072 | 7.9 yrs | |||||||||||||||||||||
avg |
(A), (B) and (C) indicate Sister Ships. As of December 31, 2005 Quintana has three sets of Sister Ships. Sister ships indicate vessels of the same class made in the same shipyard. The sister ship concept further enhances our operational flexibility and efficiency. |
Time Charter Coverage
Mr. Molaris commented, “Our strategy is to predominantly employ our vessels under period time charters, which enables us to generate stable and predictable cash flows. In this context, taking into consideration the entire fleet of 10 vessels and our fleet deployment as of February 28, 2006, 78.7% of the fleet’s net operating days for 2006 are already secured under period charters, and the charter coverage for 2007 is 52.6%”
The table below reflects the charter coverage of the fleet as of February 28, 2006:
Panamax Fleet
1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | 4Q07 | |||||||||||||||||||||||||
Est. | Est. | Est. | Est. | Est. | Est. | Est. | Est. | |||||||||||||||||||||||||
Total Time Chartered Days | 623 | 572 | 448 | 455 | 361 | 325 | 364 | 364 | ||||||||||||||||||||||||
Net Daily Average Rate of time chartered ships | $ | 20,949 | $ | 20,064 | $ | 20,622 | $ | 21,130 | $ | 22,096 | $ | 22,879 | $ | 22,885 | $ | 22,885 | ||||||||||||||||
Total Expected Time Charter Revenues in $ mil | $ | 13.1 | $ | 11.5 | $ | 9.2 | $ | 9.6 | $ | 8.0 | $ | 7.4 | $ | 8.3 | $ | 8.3 |
Capesize Fleet
1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | 4Q07 | |||||||||||||||||||||||||
Est. | Est. | Est. | Est. | Est. | Est. | Est. | Est. | |||||||||||||||||||||||||
Total Time Chartered Days | 178 | 159 | 160 | 182 | 147 | 90 | 91 | 91 | ||||||||||||||||||||||||
Net Daily Average Rate of time chartered ships | $ | 33,393 | $ | 30,707 | $ | 29,333 | $ | 30,034 | $ | 31,109 | $ | 35,131 | $ | 35,131 | $ | 35,131 | ||||||||||||||||
Total Expected Time Charter Revenues in $ mil | $ | 5.9 | $ | 4.9 | $ | 4.7 | $ | 5.5 | $ | 4.6 | $ | 3.2 | $ | 3.2 | $ | 3.2 |
Dividend
At its meeting today, the Board of Directors of Quintana declared a dividend of $0.21 per share, payable on March 15, 2006 to all shareholders of record as of March 10, 2006.
Paul J. Cornell, Quintana’s Chief Financial Officer, commented, “Quintana has been in operation for three quarters in 2005, and we are pleased to declare our third consecutive quarterly dividend. Since it commenced operations in April 2005, Quintana has declared aggregate dividends of $0.46 per share.”
Dividend Policy
In addition, the Board of Directors has defined the Company’s dividend policy. The Board will estimate a minimum annualized dividend each year, to be declared and paid quarterly, at its first regular meeting. The Board retains the discretion to declare quarterly dividends that deviate from the estimated dividend, taking into consideration legal restrictions, such as those under Marshall Islands law; covenants and other restrictions under the Company’s revolving credit facility and any future debt instruments; and changing market conditions. For 2006, the Board expects to pay a minimum annualized dividend of $0.84 per common share.
Mr. Molaris also commented, “I am very pleased that our Board has established a dividend policy that provides for a minimum annualized dividend per share. This policy will increase dividend visibility for our shareholders in 2006 and beyond, as well as allowing our Board the flexibility to channel the remaining cash flow to uses that yield higher returns and increase shareholder value, depending on the prevailing market conditions and other circumstances. Our long-term time-charter strategy and our competitive cost base enhance our ability to provide a stable, predictable stream of dividends to our shareholders”.
Conference Call and Webcast:
As already announced, Quintana’s management will host a conference call to discuss the results tomorrow, Wednesday, March 1, 2006 at 10:00 A.M. EST,.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111(from the US), 0800 953 0329 (from the UK) or + 44(0)1452 542 301 (from outside the US). Please quote “Quintana”.
In case of any problem with the above numbers, please dial 1 866 869 2352 (from the US),0800 694 1449 (from the UK) or + 44 (0) 1452 560 304 (from outside the US). Quote “Quintana”.
A telephonic replay of the conference call will be available until March 8, 2006 by dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK) or + 44(0) 1452 550 000 (from outside the US). Access Code: 1859591#
Slides and audio webcast:
There will also be a live, and then archived, webcast of the conference call, that can be accessed through Quintana Maritime’s website at www.quintanamaritime.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
-financials follow-
Quintana Maritime Limited
Consolidated Balance Sheet
(All amounts expressed in U.S. Dollars)
Consolidated Balance Sheet
(All amounts expressed in U.S. Dollars)
December 31, | ||||
2005 | ||||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 4,258,809 | ||
Inventories | 378,488 | |||
Due from charterers, net | 1,244,123 | |||
Other receivables | 479,735 | |||
Prepaid expenses and other current assets | 866,562 | |||
Total current assets | 7,227,717 | |||
Non-current assets | ||||
Vessels, net of accumulated depreciation of $11,309,344 | 446,474,869 | |||
Other fixed assets, net of accumulated depreciation of $58,739 | 384,247 | |||
Deferred financing costs, net of accumulated amortization of $5,190,475 | 1,959,041 | |||
Deferred time charter premium, net of accumulated amortization of $439,815 | 9,060,185 | |||
Deferred dry docking costs, net of accumulated amortization of $279,865 | 919,556 | |||
Total non-current assets | 458,797,898 | |||
Total assets | $ | 466,025,615 | ||
Liabilities and shareholders’ equity | ||||
Current liabilities: | ||||
Accounts payable | 1,473,592 | |||
Sundry liabilities and accruals | 3,412,759 | |||
Deferred income | 1,715,910 | |||
Total current liabilities | 6,602,261 | |||
Long Term Debt | 210,000,000 | |||
Shareholders’ equity | ||||
Common stock at $0.01 par value — 23,846,742 shares issued, authorized and outstanding | 238,468 | |||
Additional paid-in capital | 254,732,530 | |||
Deferred stock-based compensation | (5,187,200 | ) | ||
Accumulated deficit | (360,444 | ) | ||
Total shareholders’ equity | 249,423,354 | |||
Total liabilities and shareholders’ equity | $ | 466,025,615 |
QUINTANA MARITIME LIMITED
Consolidated Statement of Operations
For the three month period and the twelve month period ended December 31, 2005
(All amounts expressed in U.S. Dollars )
Consolidated Statement of Operations
For the three month period and the twelve month period ended December 31, 2005
(All amounts expressed in U.S. Dollars )
Period from | ||||||||
January 13, | ||||||||
Three Months | 2005 | |||||||
Ended | (inception) to | |||||||
December 31, | December 31, | |||||||
2005 | 2005 | |||||||
REVENUES: | ||||||||
Voyage revenue | $ | 21,695,924 | $ | 42,501,528 | ||||
Amortization of time charter fair value | (439,815 | ) | (439,815 | ) | ||||
Commissions | (952,347 | ) | (1,787,208 | ) | ||||
Net revenue | $ | 20,303,762 | $ | 40,274,505 | ||||
EXPENSES: | ||||||||
Vessel operating expenses | 3,197,495 | 6,819,595 | ||||||
General and administrative expenses | 2,596,791 | 5,301,037 | ||||||
Management Fees | — | 591,190 | ||||||
Depreciation and amortization | 5,719,022 | 11,647,948 | ||||||
Operating income | $ | 8,790,454 | $ | 15,914,735 | ||||
OTHER INCOME (EXPENSES): | ||||||||
Interest expense | $ | (2,463,697 | ) | $ | (5,366,741 | ) | ||
Interest income | 67,966 | 227,936 | ||||||
Finance costs | (1,604,022 | ) | (5,190,475 | ) | ||||
Foreign exchange losses & other, net | (53,545 | ) | (57,245 | ) | ||||
Total other income (expense), net | $ | (4,053,298 | ) | $ | (10,386,525 | ) | ||
Net Income | $ | 4,737,156 | $ | 5,528,210 | ||||
Net income per common share | ||||||||
Basic | 0.20 | 0.39 | ||||||
Diluted | 0.20 | 0.39 | ||||||
Weighted average shares outstanding | ||||||||
Basic | 23,287,992 | 14,134,268 | ||||||
Diluted | 23,583,194 | 14,239,907 |
Quintana Maritime Limited
Consolidated Statement of Cash Flows
(All amounts expressed in U.S. Dollars)
Consolidated Statement of Cash Flows
(All amounts expressed in U.S. Dollars)
Period from | ||||
January 13, 2005 | ||||
(inception) to | ||||
December 31, 2005 | ||||
Cash flows from operating activities: | ||||
Net income | $ | 5,528,210 | ||
Adjustments to reconcile net loss to net cash provided by operating activities Depreciation and amortization | 11,647,948 | |||
Amortization of deferred finance and legal costs | 5,190,475 | |||
Amortization of time charter fair value | 439,815 | |||
Amortization of Stock based compensation | 616,175 | |||
Changes in assets and liabilities: | ||||
Increase in inventories | (378,488 | ) | ||
Increase in due from charterer, net | (1,244,123 | ) | ||
Increase in other receivables | (479,735 | ) | ||
Increase in prepaid expenses | (866,562 | ) | ||
Increase in accounts payable | 1,473,592 | |||
Increase in sundry liabilities and accruals | 3,412,759 | |||
Increase in deferred income | 1,715,910 | |||
Deferred dry-dock costs incurred | (1,199,421 | ) | ||
Net cash from operating activities | $ | 25,856,555 | ||
Cash flows from investing activities: | ||||
Vessel acquisitions | (457,784,213 | ) | ||
Time Charter Premium | (9,500,000 | ) | ||
Purchases of property, plant and equipment | (442,986 | ) | ||
Net cash used in investing activities | $ | (467,727,199 | ) | |
Cash flows from financing activities: | ||||
Proceeds from long-term debt | 628,621,351 | |||
Payment of long-term debt | (411,621,351 | ) | ||
Pay down on term loan facility | (7,000,000 | ) | ||
Payment of financing costs | (7,149,516 | ) | ||
Paid-in capital and common stock | 68,405,637 | |||
Proceeds from initial public offering | 182,941,641 | |||
Issuance costs of initial public offering | (2,179,655 | ) | ||
Dividends paid | (5,888,654 | ) | ||
Net cash from financing activities | $ | 446,129,453 | ||
Net increase in cash and cash equivalents | 4,258,809 | |||
Cash and cash equivalents at beginning of the period | — | |||
Cash and cash equivalents at end of the period | $ | 4,258,809 | ||
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest | 3,064,300 | |||
Deferred stock-based compensation | 5,803,375 |
Quintana Maritime Limited
Reconciliation of Net Income to Adjusted EBITDA
(All amounts expressed in U.S. Dollars)
Reconciliation of Net Income to Adjusted EBITDA
(All amounts expressed in U.S. Dollars)
Period from | ||||||||
Three months | January 13, 2005 | |||||||
ended December | (inception) to | |||||||
31, 2005 | December 31, 2005 | |||||||
Net Income | $ | 4,737,156 | $ | 5,528,210 | ||||
Interest and finance costs, net | 3,999,753 | 10,329,280 | ||||||
Depreciation and amortization | 5,719,022 | 11,647,948 | ||||||
Amortization of t/c fair value | 439,815 | 439,815 | ||||||
Stock-based compensation | 301,045 | 616,175 | ||||||
15,196,791 | 28,561,428 |
Disclosure of Non-GAAP Financial Measures
Adjusted EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes, if any, plus deferred stock-based compensation, and amortization of time charter fair value, which is a non-cash item. Adjusted EBITDA is included because it is used by certain investors to measure a company’s financial performance. Adjusted EBITDA is a “non-GAAP financial measure” 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. Adjusted EBITDA is presented to provide additional information with respect to the Company’s ability to satisfy its obligations including debt service, capital expenditures, working capital requirements and determination of dividends. While Adjusted EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of Adjusted EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.
ABOUT QUINTANA MARITIME LIMITED
Quintana Maritime Limited, based in Greece, is an international provider of dry bulk cargo marine transportation services. The company currently owns and operates a fleet of eight Panamax size vessels and two Capesize vessels with a total carrying capacity of 916,072 dwt and an average age of 7.9 years.
Forward Looking Statement
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 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. Such statements include comments regarding expected revenues and time charters. 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 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 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 Immediate Release
Company Contact: | Investor Relations / Financial Media: | |
Paul J. Cornell | Paul Lampoutis | |
Chief Financial Officer | Capital Link, Inc, New York | |
Tel. 713-751-7525 | Tel. 212.661.7566 | |
E-mail: pcornell@quintanamaritime.com | E-mail:plampoutis@capitallink.com |
-end-