Exhibit 99.1
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Investor Contact Media Contact
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Alan Ginsberg Jon Morgan
Chief Financial Officer Kekst and Company
212-785-2500 212-521-4800
Eagle Bulk Shipping Inc. Reports Second
Quarter 2005 Results and Affirms Dividends
NEW YORK, NY, Aug 15, 2005 -- Eagle Bulk Shipping Inc. (NASDAQ: EGLE), a global
marine transportation company specializing in the Handymax segment of the
dry-bulk shipping industry, reported today its financial results for the three
month and six month periods ended June 30, 2005. Eagle Bulk Shipping commenced
operations as a publicly traded Company during this period.
The Company expects to declare a quarterly dividend of $0.53 per share in
October 2005 and $0.57 per share in February 2006, as disclosed in its June 22,
2005, S-1 filing.
Net revenues for the three months of operations ended June 30, 2005 were $10.6
million. EBITDA, as adjusted for exceptional items under the terms of the
Company's credit agreement, was $7.0 million for the quarter. Reflecting the
inclusion of $6.2 million in one-time fees to affiliates and $7.6 million in
non-dilutive non-cash compensation expense, the Company incurred a net loss for
the quarter of $12.1 million.
During the three months ended June 30, 2005, Eagle Bulk took possession of nine
ships. Since June 30, 2005, Eagle Bulk has taken possession of a tenth
additional vessel and is scheduled to take delivery of its eleventh vessel in
August 2005. Vessel Expenses were $3.1 million while General and Administrative
Expenses were $0.7 million for the three months ended June 30. Net Interest
Expense for the period was $3.1 million which included $1.1 million in write-off
of debt arrangement fees and interest expense of $0.6 million incurred on a
promissory note.
Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented,
"Management is very pleased with Eagle Bulk's initial three months of
operations. During the second quarter, the Company made great strides in terms
of executing its strategy of efficiently deploying modern ships under
longer-term charters in the highly attractive handymax sector. As planned,
during the second quarter, we took possession of nine ships and immediately
placed them on attractive medium to long term charters.
"Additionally, management was successful in reaching its operating expense goals
for the quarter, thereby achieving what it believes is one of the lowest cash
break-even points in the dry bulk shipping industry. Eagle's management remains
committed to building the Company's premiere franchise in the dry bulk shipping
sector."
As of June 30, 2005, the Company's cash balance was $11.0 million with an
additional $4 million in restricted cash deposits maintained with its lender for
loan compliance purposes. Subsequent to June 30, 2005 the Company has entered
into a ten-year $330 million revolving credit facility. The credit facility
refinanced the Company's long-term debt of $88.5 million which was outstanding
as of June 30, 2005, provides $61.5 million in funds for purchase of the two
remaining vessels which the Company has contracted for and $180 million for
future vessel acquisition programs. The credit facility matures in 2015 and has
no principal repayment obligations until 2010.
The Company's policy is to declare quarterly dividends to stockholders in
amounts that are substantially equal to its available cash from operations
during the previous quarter less any cash reserves for dry-docking and working
capital. The declaration and payment of dividends will always be subject to the
discretion of the Company's Board of Directors, restrictions contained in the
Credit Facility and the requirements of Marshall Islands law. Our Board of
Directors may review or amend our dividend policy from time to time.
Selected Financial Tables
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The following is the Condensed Consolidated Income Statement for Eagle Bulk
Shipping Inc. for the quarter ended June 30, 2005 and the period from inception
January 26, 2005 to June 30, 2005:
(Dollars in thousands)
Period from
January 26, 2005
Three Months ended (inception) to
June 30, 2005 June 30, 2005
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Net Revenues $ 10,616 $ 10,616
Vessel Expenses 3,066 3,115
General and Administrative Expenses 663 1,420
Depreciation 2,021 2,021
One-time Fees to Affiliates 6,175 6,175
Non-cash Compensation Expense 7,641 7,641
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Total Operating Expenses 19,566 20,372
Operating Loss (8,950) (9,756)
Net Interest Expense 3,139 3,139
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Net Loss $(12,089) $(12,895)
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Basic and Diluted Earnings Per Share $(0.87) $(0.96)
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Weighted Average Shares Outstanding 13,857,692 13,396,154
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Reconciliation of Net Loss to EBITDA (adjusting for exceptional items as per
Credit Agreement)
Three Months ended
(Dollars in Thousands) June 30, 2005
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Net Loss $(12,089)
Interest Expense 3,234
Depreciation 2,021
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EBITDA $(6,834)
Adjustments for Exceptional Items:
Management and Other Fees to Affiliates (1) 6,175
Non-cash Compensation Expense (2) 7,641
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Credit Agreement EBITDA $ 6,982
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(1) One time charge (see Note 8 of our consolidated financial statements)
(2) Management's participation in profits interests in Eagle Ventures LLC (see
Note 11 of our consolidated financial statements)
EBITDA
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EBITDA represents operating earnings before extraordinary items, depreciation
and amortization, 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 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.
Our new credit facility permits us to pay dividends in amounts up to our
earnings before extraordinary or exceptional items, interest, taxes,
depreciation and amortization (Credit Agreement EBITDA), less the aggregate
amount of interest incurred and net amounts payable under interest rate hedging
agreements during the relevant period and an agreed upon reserve for
dry-docking. Therefore, we believe that this non-GAAP measure is important for
our investors as it reflects our ability to pay dividends.
The following are the Condensed Consolidated Balance Sheets for Eagle Bulk
Shipping Inc. as at June 30, 2005 and March 31, 2005:
(Dollars in thousands) As at June 30, As at March 31,
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2005 2005
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Cash and Cash Equivalents $ 10,971 $ 4,187
Other Current Assets 1,492 19
Advances for Vessels 7,018 36,518
Vessels, net 293,203 151
Other Assets 4,776 30
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TOTAL ASSETS $ 317,460 $ 40,905
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Current Liabilities 6,316 889
Long-term Debt 88,500 --
Total Liabilities 94,816 889
Stockholders' Equity 222,644 40,016
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 317,460 $ 40,905
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Conference Call Information
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As previously announced, members of Eagle Bulk's senior management team will
host a teleconference and webcast at 8:30 a.m. ET on Tuesday, August 16th to
discuss the results.
To participate in the teleconference, investors and analysts are invited to call
866-700-6293 in the U.S., or 617-213-8835 outside of the U.S., and reference
participant code 62565102. A simulcast webcast can be accessed by visiting the
Company's website at: www.eagleships.com.
A replay will be available following the call until 12:00 AM ET on August 23,
2005. To access the replay, call 888-286-8010 in the U.S., or 617-801-6888
outside of the U.S., and reference the code 20532109.
About Eagle Bulk Shipping Inc.
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Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in New
York City. We are the largest U.S. based owner of Handymax dry bulk vessels,
which are dry bulk vessels range in size from 35,000 to 60,000 deadweight tons,
or dwt, and transport a broad range of major and minor bulk cargoes, including
iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.
Our strategy is to charter our modern fleet primarily pursuant to one- to
three-year time charters to allow us to take advantage of the stable cash flow
and high utilization rates that are associated with medium- to long-term time
charters.
Forward-Looking Statement
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Matters discussed in this release may constitute forward-looking statements.
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 forward-looking statements in this release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical operating
trends, data contained in our records and other data available from third
parties. Although Eagle Bulk Shipping Inc. believes that these assumptions were
reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond our control, Eagle Bulk Shipping Inc. cannot assure you
that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, general market conditions, including
changes in charterhire rates and vessel values, changes in demand that may
affect attitudes of time charterers to scheduled and unscheduled drydocking,
changes in our vessel operating expenses, including dry-docking and insurance
costs, or actions taken by regulatory authorities, ability of our counterparties
to perform their obligations under sales agreements and charter contracts on a
timely basis, potential liability from future litigation, domestic and
international political conditions, potential disruption of shipping routes due
to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by Eagle Bulk
Shipping Inc. with the US Securities and Exchange Commission.
Visit our website at www.eagleships.com
25083.0001 #594350