FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
For
the month of October 2008
Commission
File Number
TOP
SHIPS INC.
(Translation
of registrant’s name into English)
1
VAS. SOFIAS & MEG.
ALEXANDROU
STREET
151
24, MAROUSSI
ATHENS,
GREECE
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F [ X ] Form 40-F
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)7: ___
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes
[ ] No [ X ]
If
“Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): ________.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
to this Form 6-K as Exhibit 1 is the press release issued by Top Ships Inc. on
July 31, 2008, announcing its operating results for the second quarter and
first half of 2008.
EXHIBIT
1
NEWS RELEASE for July 31,
2008
|
Contact:
|
Michael
Mason (investors)
|
Stamatis
Tsantanis, CFO
|
|
Allen
& Caron Inc
|
TOP
Ships Inc
|
|
|
212
691 8087
|
011
30 210 812 8199
|
|
|
michaelm@allencaron.com
|
snt@topships.org
|
TOP
SHIPS REPORTS SECOND QUARTER AND FIRST HALF 2008 FINANCIAL RESULTS
ATHENS,
GREECE (July 31, 2008) … TOP Ships Inc. (NasdaqGS:TOPS) today announced its
operating results for the second quarter and first half of
2008.
For the three months ended June 30, 2008,
the Company reported a net loss of $5,589,000,
or $0.22 per share, compared with net
income of $7,276,000, or $0.67 per share, for the second quarter of 2007. The
weighted average numbers of
basic shares used in the computations were 25,182,389 and 10,825,9121 for the second quarter of 2008 and 2007, respectively. The results for the second quarter of 2008 include net
charges of $6,661,000, or $0.26 per share of special items2 that affected the Company's net results
that are typically excluded by securities analysts in their published estimates
of the Company's financial results, which are described in Appendix A
to this release. For the three months ended June 30, 2008, operating income was
$7,078,000, compared with operating income of $8,651,000 for the second quarter of 2007. Revenues for the second quarter of 2008 were $76,687,000, compared to $75,289,000
recorded in the second quarter of
2007.
For the six months ended June 30, 2008, the
Company reported a net loss of $24,430,000, or $1.07 per share, compared with net income
of $10,275,000, or $0.95 per share, for the first half of 2007. The weighted
average numbers of basic shares used in the computations were 22,738,815 and 10,801,6121 for the first half of 2008 and 2007, respectively. The results
for the first half of 2008 include net charges of $23,109,000, or $1.02 per share of special items that
affected the Company's net results that are typically excluded by
securities analysts in their published estimates of the Company's financial
results, which are described in Appendix A to this release. For the six months ended June 30,
2008, operating income was $4,644,000, compared with $12,099,000 for the first half of 2007. Revenues for the six-month period ended June 30, 2008
were $149,324,000, compared to $149,277,000 recorded in the first half of
2007.
Evangelos J. Pistiolis, President and
Chief Executive Officer of TOP Ships Inc., commented: “We are pleased to see the Company
returning to operating profitability after posting losses in the preceding three
quarters. We believe that this proves that our strategy to diversify into the
drybulk sector and to further unwind our leasing contracts was successful.
Moreover, during the second
quarter of 2008 we
completed a number of transactions in order to further enhance shareholders’
value. The most notable events of the quarter
were:
|
§
|
The delivery of our last drybulk
vessel, which completed the diversification of the Company into the
drybulk sector. We
agreed to acquire these vessels in July and August of
2007 and
since then we
have successfully raised debt and
equity capital in excess of $390 million to fund our capital
expenditures in the drybulk and the tanker
sector.
|
|
§
|
The chartering arrangements of all
our drybulk vessels are with major charterers for periods
between one and five years. These fixed rate charter agreements significantly reduce
any potential downside of the drybulk market for the next years and
provide stable
operating cash-flows
for the Company.
|
|
§
|
We entered into fixed rate
charter agreements
for all six of our newbuilding product tankers with three major charterers
for periods that range between seven and ten years. These charters have
been agreed on a bareboat basis, which not only reduces our long-term market risk
relating to the
vessels, but also
eliminates the Company’s operational risk for that period.
|
|
§
|
The
private placement of 7.3 million common shares for aggregate net proceeds
of $51 million.
|
|
§
|
The
agreement to sell five Suezmax tankers built between 1992 and 1996 for an
aggregate sale price of $240 million. Two of the vessels have already been
delivered and the remaining three are expected to be delivered to their
new owners by the end of August 2008. The net proceeds of the sales of
approximately $90 million may be applied to acquisitions and general
corporate purposes.
|
|
§
|
Finally we are close to completing the
termination of
additional vessel
charter-in contracts
in order to further reduce our future charter hire expense.”
|
The
following key indicators serve to highlight changes in the financial performance
of the Company’s vessels during the second quarters and six-month periods ended
June 30, 2007 and 2008:
|
Suezmax
Vessels
|
||||||||||||||||||||||||
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2007
|
2008
|
Change
|
2007
|
2008
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
1,122 | 814 | -27.5 | % | 2,292 | 1,784 | -22.2 | % | ||||||||||||||||
|
Total
operating days
|
1,016 | 646 | -36.4 | % | 2,100 | 1,370 | -34.8 | % | ||||||||||||||||
|
Utilization
|
90.6 | % | 79.4 | % | -12.4 | % | 91.6 | % | 76.8 | % | -16.2 | % | ||||||||||||
|
TCE3 per ship per day
under spot voyage charter
|
42,106 | 42,670 | 1.3 | % | 40,236 | 45,342 | 12.7 | % | ||||||||||||||||
|
TCE
per ship per day under time charter
|
35,831 | 41,910 | 17.0 | % | 35,481 | 40,209 | 13.3 | % | ||||||||||||||||
|
Average
TCE
|
39,840 | 42,125 | 5.7 | % | 38,595 | 42,653 | 10.5 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
8,371 | 11,750 | * | 40.4 | % | 8,300 | 13,730 | * | 65.4 | % | ||||||||||||||
|
Handymax
Vessels
|
||||||||||||||||||||||||
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2007
|
2008
|
Change
|
2007
|
2008
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
1,001 | 728 | -27.3 | % | 1,991 | 1,456 | -26.9 | % | ||||||||||||||||
|
Total
operating days
|
933 | 667 | -28.5 | % | 1,844 | 1,288 | -30.2 | % | ||||||||||||||||
|
Utilization
|
93.2 | % | 91.6 | % | -1.7 | % | 92.6 | % | 88.5 | % | -4.5 | % | ||||||||||||
|
TCE
per ship per day under spot voyage charter
|
- | 24,363 | - | - | 24,259 | - | ||||||||||||||||||
|
TCE
per ship per day under time charter
|
21,554 | 18,567 | -13.9 | % | 20,924 | 18,461 | -11.8 | % | ||||||||||||||||
|
Average
TCE
|
21,554 | 19,262 | -10.6 | % | 20,924 | 18,825 | -10.0 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
6,190 | 8,898 | * | 43.7 | % | 6,382 | 9,843 | * | 54.2 | % | ||||||||||||||
|
Tanker
Fleet
|
||||||||||||||||||||||||
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2007
|
2008
|
Change
|
2007
|
2008
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
2,123 | 1,542 | -27.4 | % | 4,283 | 3,240 | -24.4 | % | ||||||||||||||||
|
Total
operating days
|
1,949 | 1,313 | -32.6 | % | 3,944 | 2,658 | -32.6 | % | ||||||||||||||||
|
Utilization
|
91.8 | % | 85.1 | % | -7.2 | % | 92.1 | % | 82.0 | % | -10.9 | % | ||||||||||||
|
TCE
per ship per day under spot voyage charter
|
42,106 | 38,846 | -7.7 | % | 40,236 | 43,068 | 7.0 | % | ||||||||||||||||
|
TCE
per ship per day under time charter
|
25,585 | 27,176 | 6.2 | % | 25,032 | 26,444 | 5.6 | % | ||||||||||||||||
|
Average
TCE
|
31,086 | 30,511 | -1.9 | % | 30,333 | 31,106 | 2.6 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
7,343 | 10,404 | 41.7 | % | 7,408 | 11,983 | 61.8 | % | ||||||||||||||||
|
Drybulk
Fleet
|
||||||||||||||||||||||||
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2007
|
2008
|
Change
|
2007
|
2008
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
- | 470 | - | - | 860 | - | ||||||||||||||||||
|
Total
operating days
|
- | 466 | - | - | 851 | - | ||||||||||||||||||
|
Utilization
|
- | 99.1 | % | - | - | 99.0 | % | - | ||||||||||||||||
|
TCE
per ship per day under spot voyage charter
|
- | - | - | - | - | - | ||||||||||||||||||
3 Time
charter equivalent rate, or TCE rate, is a measure of the average daily revenue
performance of a vessel on a per voyage basis. Our method of calculating TCE
rate is consistent with industry standards and is determined by dividing time
charter equivalent revenues or TCE revenues by voyage days for the relevant time
period. TCE revenues are revenues minus voyage expenses. Voyage expenses
primarily consist of port, canal and fuel costs that are unique to a particular
voyage, which would otherwise be paid by the charterer under a time charter
contract, as well as commissions. TCE revenues and TCE rate non-GAAP measures,
provide additional meaningful information in conjunction with shipping revenues,
the most directly comparable GAAP measure, because it assists Company’s
management in making decisions regarding the deployment and use of its vessels
and in evaluating their financial performance.
|
Suezmax
Vessels
|
||||||||||||||||||||||||
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|||||||||||||||||||||||
|
TCE
per ship per day under time charter
|
- | 50,071 | - | - | 50,559 | - | ||||||||||||||||||
|
Average
TCE
|
- | 50,071 | - | - | 50,559 | - | ||||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
- | 5,409 | * | - | - | 6,513 | * | - | ||||||||||||||||
|
Total
Fleet
|
||||||||||||||||||||||||
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2007
|
2008
|
Change
|
2007
|
2008
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
2,123 | 2,012 | -5.2 | % | 4,283 | 4,100 | -4.3 | % | ||||||||||||||||
|
Total
operating days
|
1,949 | 1,779 | -8.7 | % | 3,944 | 3,509 | -11.0 | % | ||||||||||||||||
|
Utilization
|
91.8 | % | 88.4 | % | -3.7 | % | 92.1 | % | 85.6 | % | -7.1 | % | ||||||||||||
|
TCE
per ship per day under spot voyage charter
|
42,106 | 38,846 | -7.7 | % | 40,236 | 43,068 | 7.0 | % | ||||||||||||||||
|
TCE
per ship per day under time charter
|
25,585 | 34,754 | 35.8 | % | 25,032 | 33,852 | 35.2 | % | ||||||||||||||||
|
Average
TCE
|
31,086 | 35,635 | 14.6 | % | 30,333 | 35,824 | 18.1 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
7,343 | 9,237 | 25.8 | % | 7,408 | 10,836 | 46.3 | % | ||||||||||||||||
|
General
and administrative expenses per ship per day**
|
2,631 | 3,706 | 40.9 | % | 2,518 | 3,698 | 46.9 | % | ||||||||||||||||
*
Other vessel operating expenses per ship per day for our Suezmax,
Handymax and Drybulk vessels for the second quarter of 2008 include
approximately $392, $861 and $0, respectively, and for the first half of 2008
include approximately $3,043, $1,241 and $408, respectively, for specific
unexpected repairs.
**
General and Administrative expenses per ship per day include approximately $138
and $324 for the three-month period and $178 and $323 for the six-month period
ended June 30, 2007 and 2008, respectively, of non-cash restricted stock
expense, specific legal fees and depreciation for other fixed
assets.
Fleet Report:
As of June 30, 2008, the Company’s fleet consisted of
21 vessels, or 1.9 million dwt (including 11 owned and 10 vessels sold and leased back
for a period of five to seven years) as
compared to 23 vessels, or 2.3 million dwt on June 30, 2007 (including 9 owned and 14 vessels sold
and leased back for a period of 5 to 7 years).
In June 2008, the Company entered into
agreements to sell five Suezmax tankers (M/T Stormless, M/T Edgeless, M/T Ellen P., M/T
Limitless and M/T Endless) to unrelated third parties for a total consideration of $240.0 million. The M/T Stormless was delivered to its new owners on June
26, 2008 and a gain from the sale of $1.8 million was recognized upon that vessel’s delivery. The M/T Edgeless was delivered to its new owners on
July 10, 2008 and a gain from the sale of approximately $2.9 million will be recognized in the third quarter of 2008. The remaining three vessels are expected to be delivered to their new owners by the
end of August 2008. A gain from these sales of approximately $16.6 million will be recognized upon these vessels’ deliveries.
Fleet Deployment:
During the second quarter of 2008, the Company had
approximately 78% of the fleet’s operating days on long-term employment
contracts. As of June 30, 2008, fifteen of the Company’s 21 vessels were on time
charter contracts with an average term of over two years with all but seven of
the time charters including profit sharing agreements.
Tanker Vessels:
During
the second quarter of 2008, five of the Company’s Suezmax tankers operated in
the spot market, earning on average $42,670 per vessel per day on a time charter
equivalent (TCE) basis.
During
the second quarter of 2008, four of the Company’s Suezmax tankers operated under
time charter contracts, earning on average $41,910 per vessel per day on a time
charter equivalent (TCE) basis.
Seven
out of the Company’s eight Handymax tankers operate under long term employment
agreements that provide for a base rate and additional
profit-sharing.
During
the second quarter of 2008, seven of the Company’s Handymax tankers earned on
average $18,567 per vessel per day on a time charter equivalent (TCE) basis,
including the profit-sharing allocated to the Company.
During
the second quarter of 2008, one of the Company’s Handymax tankers operated in
the spot market, earning on average $24,363 per vessel per day on a time charter
equivalent (TCE) basis.
Drybulk Vessels:
During
the second quarter of 2008, all Company’s drybulk vessels operated under time
charter contracts, earning on average $50,071 per vessel per day on a time
charter equivalent (TCE) basis, including the amortization of the fair value of
time charter contracts of $10,417 per vessel per day.
The following table presents the
Company’s current fleet list and
employment:
|
Dwt
|
Year
Built
E
|
Charter
Type
|
ExpiryF
|
Daily Base
Rate
|
Profit
Sharing
Above Base Rate
(2008)
|
|
|
7
Suezmax Tankers
|
||||||
|
TimelessB
|
154,970
|
1991
|
Spot
|
|||
|
FlawlessB
|
154,970
|
1991
|
Spot
|
|||
|
StoplessB
|
154,970
|
1991
|
Time
Charter
|
Q3/2008
|
$35,000
|
50%
thereafter
|
|
PricelessB
|
154,970
|
1991
|
Spot
|
|||
|
EndlessD,
H
|
135,915
|
1992
|
Time
Charter
|
Q3/2008
C
|
$36,500
|
None
|
|
LimitlessD,
H
|
136,055
|
1993
|
Spot
|
|||
|
Ellen
PD,
H
|
146,286
|
1996
|
Time
Charter
|
Q2/2009
|
$44,500
|
None
|
|
8
Handymax Tankers
|
||||||
|
SovereignA
|
47,084
|
1992
|
Spot
|
|||
|
RelentlessA
|
47,084
|
1992
|
Time
Charter
|
Q3/2009
|
$14,000
|
50%
thereafter
|
|
VanguardB
|
47,084
|
1992
|
Time
Charter
|
Q1/2010
|
$15,250
|
50%
thereafter
|
|
SpotlessB
|
47,094
|
1991
|
Time
Charter
|
Q1/2010
|
$15,250
|
50%
thereafter
|
|
DoubtlessB
|
47,076
|
1991
|
Time
Charter
|
Q1/2010
|
$15,250
|
50%
thereafter
|
|
FaithfulB
|
45,720
|
1992
|
Time
Charter
|
Q2/2010
|
$14,500
|
100%
first $500 + 50% thereafter
|
|
DauntlessD
|
46,168
|
1999
|
Time
Charter
|
Q1/2010
|
$16,250
|
100%
first $1,000 + 50% thereafter
|
|
Ioannis
PD
|
46,346
|
2003
|
Time
Charter
|
Q4/2010
|
$18,000
|
100%
first $1,000 + 50% thereafter
|
|
6
Newbuilding Product Tankers
|
||||||
|
Hull
S-1025
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,400
|
None
|
|
Hull
S-1026
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,550
|
None
|
|
Hull
S-1027
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2016
|
$14,300
|
None
|
|
Hull
S-1029
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2016
|
$14,300
|
None
|
|
Hull
S-1031
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,550
|
None
|
|
Hull
S-1033
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,550
|
None
|
|
Total
Tanker dwt
|
1,711,792
|
|||||
|
5
Drybulk Vessels
|
||||||
|
CycladesD
|
75,681
|
2000
|
Time
Charter
|
Q2/2011
|
$50,860
|
None
|
|
AmalfiD
|
45,526
|
2000
|
Time
Charter
|
Q1/2009
|
$22,000
|
None
|
|
Voc GallantD
|
51,200
|
2002
|
Bareboat
Charter
|
Q2/2012
|
$25,650G
|
None
|
|
PepitoD
|
75,928
|
2001
|
Time
Charter
|
Q2/2013
|
$38,950
|
None
|
|
AstraleD
|
75,933
|
2000
|
Time
Charter
|
Q2/2009
|
$67,500
|
None
|
|
Total Drybulk
dwt
|
324,268
|
|||||
|
TOTAL
DWT
|
2,036,060
|
|
A.
Vessels sold and leased back in August and September 2005 for a period of
7 years.
|
|
B.
Vessels sold and leased back in March 2006 for a period of 5
years.
|
|
C.
Charterers have option to extend contract for an additional four-year
period.
|
|
D.
Owned vessels.
|
|
E.
Year of delivery for the newbuilding product tankers.
|
|
F.
For the newbuilding product tankers, the expected expiry is
inserted.
|
|
G.
From May/June 2009 until May/June 2012, the daily base rate will be
$24,000.
|
|
H.
The Company has entered into an agreement to sell this
vessel. Delivery of the vessel to its purchasers is expected
during the third quarter of
2008.
|
Liquidity and Capital
Resources
As of June 30, 2008, Top Ships had total indebtedness under
senior secured credit facilities of
$477.0 million (including the $119.3 million classified
as current portion and associated with the agreed sale of the four remaining
Suezmaxes and excluding
unamortized financing fees of $2.8 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 2008 through
2015.
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.
In December 2007 and in April
2008, the Company raised $120.0 million of equity capital
to fund its diversification in the dry bulk sector
and its newbuilding program. All drybulk
vessels of the Company have been chartered under long-term employment agreements that
are expected to provide a secured stream of drybulk revenues and operating cash flows. Moreover, the long-term employment
agreements for the majority of the tanker fleet, in combination with
recently significantly improved spot market
rates are expected to increase tanker revenues.
Moreover, in June 2008 the Company
entered into an agreement
to sell five double-hull Suezmax tankers built between 1992 and 1996 for an
aggregate sale price of $240 million. Two of the vessels have already been delivered and the
remaining three are
expected to be delivered to their new owners by August 2008 and the net proceeds from
the sale (after debt repayment of $119.3 million and other sale-related
expenses) will be approximately $90 million.
Therefore, the Company expects that its working capital generation, in
combination with the existing cash balances, its recent equity offerings and the net proceeds from the sale of
the five Suezmax tankers will be sufficient to cover its liquidity requirements for the next year, other than the
financing of the newbuildings. As to those, the Company has received firm commitments
from two banks for the financing of three of its newbuildings, and is finalizing
the agreement to finance the remaining three newbuildings with one
bank.
As of June 30, 2008, the Company has three interest rate
swap agreements with RBS for the amounts of $26.9 million, $10.0 million and $10.0
million for a remaining period of one, five and five years, respectively. Under these
agreements the interest rate is fixed at an effective annual rate of 4.66% (in
addition to the applicable margin), 4.23% and 4.11%, respectively. The Company
also has one interest rate swap agreement with HSH for the amount of $35.5 million for a remaining period of three years, at a fixed interest rate of
4.80% in addition to the applicable margin. The Company also has one interest rate swap agreement with
Egnatia Bank for the amount of $10.0 million
for a remaining period of five years, respectively. Under
this agreement the interest rate is fixed at
an effective annual rate of 4.76%. In addition, the Company has two interest rate swap
agreements with HSH for the amounts of $17.0 million and $8.0 million for a
remaining period of five years. The above swaps of $10.0 million, $10.0
million and $10.0 million, include steepening terms based on the two and 10 year
U.S. Dollar swap difference, which is calculated
quarterly in arrears. The interest rate for the remaining balance of the loans is
LIBOR, plus the margin.
In November 2007, the Company entered
into an interest rate derivative contract, under which the Company will pay five annual
interest payments on a notional amount of $85.0 million. Based on the cumulative performance of
a portfolio of systematic foreign exchange trading strategies, the interest
payments will have a minimum floor at 0.00% and a cap at
7.50%.
In
April 2008, the Company mutually agreed with Deutsche Bank to terminate the
$50.0 million swap. The then outstanding liability of $7.5 million is scheduled
to be repaid by September 30, 2008, in varying installments. During the second
quarter of 2008, the Company paid $3.3 million, resulting in a balance
outstanding as of June 30, 2008 of $4.2 million.
In
May 2008, the Company entered into an interest rate swap agreement for a
notional amount of $20.0 million for a seven year period. This swap includes steepening terms based on the two and
10 year Euro swap difference, which is calculated
quarterly in arrears.
On June 30, 2008, the Company’s ratio of
indebtedness to total capital was approximately 66.5%.
In
April 2008, the Company privately placed 7.3 million common shares for aggregate
net proceeds of $50.6 million with various investors. The 7.3 million shares
were sold for $7.00 per share, which represents a discount of 15.5 percent based
on the closing share price of $8.28 on April 23, 2008. Proceeds from this
offering were used for debt repayment and for general corporate purposes. On
July 3, 2008 the Company filed a registration statement to register those shares
for resale, which was declared effective on July 15, 2008.
In
April 2008 and June 2008, following the sale of M/V Bertram and M/T Stormless,
respectively, the then outstanding loan amounts were fully repaid. In May 2008,
the Company took delivery of the drybulk vessel M/V Astrale. The acquisition
cost was partially financed through a long-term bank loan, maturing in April
2013.
In
addition, in May and June 2008, the Company paid the second installment for the
construction of three vessels, which was partly financed from the revolving
credit facility with RBS.
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 Thursday,
July 31, 2008, at 10:00 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 292357. An online archive will also be
available immediately following the call at the sites noted above. Both are
available for one week, through August 7, 2008.
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. Upon delivery of
the five suezmaxes to their new owners the Company will operate a combined
tanker and drybulk fleet as follows:
|
|
--
|
a
fleet of 12 tankers, consisting of 4 double-hull Suezmax tankers and 8
double-hull Handymax tankers, with a total carrying capacity of
approximately 1.0 million dwt, of which 86% are sister ships. Eight of the
Company's 12 tankers will be on time charter contracts with an average
term of two years with all of the time charters including profit sharing
agreements above their base rates. In addition, the Company has ordered
six newbuilding product tankers, which are expected to be delivered in the
first half of 2009. All the expected newbuildings have fixed rate bareboat
employment agreements for periods between seven and ten
years.
|
|
|
--
|
a
fleet of five drybulk vessels with a total carrying capacity of
approximately 0.3 million dwt, of which 70% are sister ships. All of the
Company's drybulk vessels have fixed rate employment contracts for an
average period of 30 months.
|
Forward-Looking
Statements
Matters
discussed in this press release may constitute forward-looking statements. 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 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. The forward-looking statements in this press release
are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, our management's examination
of historical operating trends, data contained in our records and other data
available from third parties. Although we believe 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, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In
addition to these important factors, other 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 fluctuations in charter rates
and vessel values, failure of a seller to deliver one or more vessels or of a
buyer to accept delivery of one or more vessels, inability to procure
acquisition financing, default by one or more charterers of our ships, changes
in the demand for crude oil and petroleum products, changes in demand for dry
bulk shipping capacity, changes in our operating expenses, including bunker
prices, drydocking and insurance costs, the market for our vessels, availability
of financing and refinancing, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hires 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.
TABLES
FOLLOW
|
TOP
SHIPS INC.
|
||||||||||||||||||||||||
|
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||||||
|
(Expressed
in thousands of U.S. Dollars - except for share and per share
data)
|
||||||||||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||||||||||
|
2007
|
2007
|
2008
|
2007
|
2007
|
2008
|
|||||||||||||||||||
|
As
originally reported under the deferral method
|
As
computed under the direct expense method
|
As
originally reported under the deferral method
|
As
computed under the direct expense method
|
|||||||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
|
REVENUES:
|
||||||||||||||||||||||||
|
Revenues
|
$ | 75,289 | $ | 75,289 | $ | 76,687 | $ | 149,277 | $ | 149,277 | $ | 149,324 | ||||||||||||
|
EXPENSES:
|
||||||||||||||||||||||||
|
Voyage
expenses
|
14,702 | 14,702 | 13,293 | 29,644 | 29,644 | 23,617 | ||||||||||||||||||
|
Charter
hire expense
|
26,858 | 26,858 | 15,854 | 56,356 | 56,356 | 33,842 | ||||||||||||||||||
|
Amortization
of deferred gain on sale and leaseback of vessels
|
(2,208 | ) | (2,208 | ) | (1,406 | ) | (4,641 | ) | (4,641 | ) | (2,703 | ) | ||||||||||||
|
Other
vessel operating expenses
|
15,589 | 15,589 | 18,585 | 31,730 | 31,730 | 44,427 | ||||||||||||||||||
|
Dry-docking
costs
|
- | 2,521 | 4,983 | - | 4,505 | 9,032 | ||||||||||||||||||
|
Depreciation
|
5,490 | 5,490 | 10,442 | 10,729 | 10,729 | 20,952 | ||||||||||||||||||
|
Amortization
of dry-docking costs
|
4,008 | - | - | 8,044 | - | - | ||||||||||||||||||
|
General
and administrative expenses
|
5,586 | 5,586 | 7,457 | 10,784 | 10,784 | 15,162 | ||||||||||||||||||
|
Foreign
currency (gains) / losses, net
|
61 | 61 | 19 | 32 | 32 | 551 | ||||||||||||||||||
|
(Gain)
/ loss on sale of vessels
|
(1,961 | ) | (1,961 | ) | 382 | (1,961 | ) | (1,961 | ) | (200 | ) | |||||||||||||
|
Operating
income
|
7,164 | 8,651 | 7,078 | 8,560 | 12,099 | 4,644 | ||||||||||||||||||
|
OTHER
INCOME (EXPENSES):
|
||||||||||||||||||||||||
|
Interest
and finance costs
|
(3,515 | ) | (3,515 | ) | (10,638 | ) | (6,488 | ) | (6,488 | ) | (18,584 | ) | ||||||||||||
|
Fair
value change of financial instruments
|
1,292 | 1,292 | (2,301 | ) | 3,003 | 3,003 | (11,160 | ) | ||||||||||||||||
|
Interest
income
|
841 | 841 | 233 | 1,666 | 1,666 | 663 | ||||||||||||||||||
|
Other,
net
|
7 | 7 | 39 | (5 | ) | (5 | ) | 7 | ||||||||||||||||
|
Total
other expenses, net
|
(1,375 | ) | (1,375 | ) | (12,667 | ) | (1,824 | ) | (1,824 | ) | (29,074 | ) | ||||||||||||
|
Net
Income (loss)
|
$ | 5,789 | $ | 7,276 | $ | (5,589 | ) | $ | 6,736 | $ | 10,275 | $ | (24,430 | ) | ||||||||||
|
Earnings
(loss) per share, basic and diluted
|
$ | 0.53 | $ | 0.67 | $ | (0.22 | ) | $ | 0.62 | $ | 0.95 | $ | (1.07 | ) | ||||||||||
|
Weighted
average common shares outstanding, basic
|
10,825,912 | 10,825,912 | 25,182,389 | 10,801,612 | 10,801,612 | 22,738,815 | ||||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
10,838,880 | 10,838,880 | 25,182,389 | 10,814,580 | 10,814,580 | 22,738,815 | ||||||||||||||||||
|
TOP
SHIPS INC.
|
||||||||
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
||||||||
|
(Expressed
in thousands of U.S. Dollars - except for share and per share
data)
|
||||||||
|
December
31,
|
June
30,
|
|||||||
|
2007
|
2008
|
|||||||
|
ASSETS
|
(Unaudited)
|
(Unaudited)
|
||||||
|
CASH
AND CASH EQUIVALENTS
|
$ | 26,012 | $ | 24,807 | ||||
|
OTHER
CURRENT ASSETS
|
29,881 | 29,033 | ||||||
|
NET
INVESTMENT IN CAPITAL LEASE
|
- | 40,500 | ||||||
|
VESSEL
HELD FOR SALE
|
46,268 | 171,560 | ||||||
|
ADVANCES
FOR VESSELS ACQUISITIONS / UNDER CONSTRUCTION
|
66,026 | 82,781 | ||||||
|
VESSELS,
NET
|
553,891 | 426,227 | ||||||
|
OTHER
NON-CURRENT ASSETS
|
28,339 | 27,338 | ||||||
|
RESTRICTED
CASH
|
26,500 | 30,000 | ||||||
|
Total
assets
|
$ | 776,917 | $ | 832,246 | ||||
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT
PORTION OF LONG-TERM DEBT
|
$ | 107,488 | $ | 216,972 | ||||
|
OTHER
CURRENT LIABILITIES
|
45,802 | 49,289 | ||||||
|
FINANCIAL
INSTRUMENTS, NET OF CURRENT PORTION
|
10,683 | 17,876 | ||||||
|
FAIR
VALUE OF BELOW MARKET TIME CHARTER
|
29,199 | 14,753 | ||||||
|
LONG-TERM
DEBT, NET OF CURRENT PORTION
|
331,396 | 257,262 | ||||||
|
DEFERRED
GAIN ON SALE AND LEASEBACK OF VESSELS
|
40,941 | 37,569 | ||||||
|
Total
liabilities
|
565,509 | 593,721 | ||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||
|
STOCKHOLDERS'
EQUITY
|
211,408 | 238,525 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 776,917 | $ | 832,246 | ||||
|
TOP
SHIPS INC.
|
||||||||||||
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
|
||||||||||||
|
(Expressed
in thousands of U.S. Dollars)
|
||||||||||||
|
Six
Months Ended
|
||||||||||||
|
June
30,
|
||||||||||||
|
2007
|
2007
|
2008
|
||||||||||
|
As
originally reported under the deferral method
|
As
computed under the direct expense method
|
|||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
|
Cash
Flows from (used in) Operating Activities:
|
||||||||||||
|
Net
income (loss)
|
$ | 6,736 | $ | 10,275 | $ | (24,430 | ) | |||||
|
Adjustments
to reconcile net income to net cash
|
||||||||||||
|
provided
by operating activities:
|
||||||||||||
|
Depreciation
and amortization
|
19,281 | 11,237 | 25,401 | |||||||||
|
Stock-based
compensation expense
|
296 | 296 | 948 | |||||||||
|
Change
in fair value of financial instruments
|
(3,003 | ) | (3,003 | ) | 11,160 | |||||||
|
Financial
instrument termination payments
|
- | - | (3,300 | ) | ||||||||
|
Amortization
of deferred gain on sale and leaseback of vessels
|
(4,641 | ) | (4,641 | ) | (2,703 | ) | ||||||
|
Amortization
of fair value below market time charter
|
- | - | (10,953 | ) | ||||||||
|
Loss
on sale of other fixed assets
|
61 | 61 | 25 | |||||||||
|
Gain
on sale of vessels
|
(1,961 | ) | (1,961 | ) | (200 | ) | ||||||
|
Payments
for dry-docking
|
(9,312 | ) | - | - | ||||||||
|
Change
in operating assets and liabilities
|
1,692 | (3,115 | ) | 507 | ||||||||
|
Net
Cash from (used in) Operating Activities
|
9,149 | 9,149 | (3,545 | ) | ||||||||
|
Cash
Flows from (used in) Investing Activities:
|
||||||||||||
|
Principal
payments received under capital lease
|
- | - | 5,500 | |||||||||
|
Principal
payments paid under capital lease
|
- | - | (68,828 | ) | ||||||||
|
Advances
for vessels acquisitions / under construction
|
(15,360 | ) | (15,360 | ) | (37,070 | ) | ||||||
|
Vessel
acquisitions and improvements
|
(187,360 | ) | (187,360 | ) | (118,142 | ) | ||||||
|
Insurance
claims recoveries
|
- | - | 1,297 | |||||||||
|
Increase
in restricted cash
|
- | - | (3,500 | ) | ||||||||
|
Net
proceeds from sale of vessels
|
51,974 | 51,974 | 140,259 | |||||||||
|
Net
proceeds from sale of other fixed assets
|
28 | 28 | 49 | |||||||||
|
Acquisition
of other fixed assets
|
(2,022 | ) | (2,022 | ) | (601 | ) | ||||||
|
Net
Cash used in Investing Activities
|
(152,740 | ) | (152,740 | ) | (81,036 | ) | ||||||
|
Cash
Flows from (used in) Financing Activities:
|
||||||||||||
|
Proceeds
from long-term debt
|
157,500 | 157,500 | 158,078 | |||||||||
|
Payments
of long-term debt
|
(28,860 | ) | (28,860 | ) | (125,384 | ) | ||||||
|
Financial
instrument upfront receipt
|
- | - | 1,500 | |||||||||
|
Issuance
of common stock, net of issuance costs
|
23,778 | 23,778 | 50,601 | |||||||||
|
Cancellation
of fractional shares
|
- | - | (2 | ) | ||||||||
|
Payment
of financing costs
|
(1,554 | ) | (1,554 | ) | (1,417 | ) | ||||||
|
Net
Cash from Financing Activities
|
150,864 | 150,864 | 83,376 | |||||||||
|
Net
increase (decrease) in cash and cash equivalents
|
7,273 | 7,273 | (1,205 | ) | ||||||||
|
Cash
and cash equivalents at beginning of period
|
29,992 | 29,992 | 26,012 | |||||||||
|
Cash
and cash equivalents at end of period
|
$ | 37,265 | $ | 37,265 | $ | 24,807 | ||||||
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
||||||||||||
|
Interest
paid
|
$ | 5,071 | $ | 5,071 | $ | 12,834 | ||||||
|
NON-CASH
TRANSACTIONS
|
||||||||||||
|
Fair
value below market time charter
|
$ | - | $ | - | $ | 12,647 | ||||||
|
Amounts
owed for capital expenditures
|
$ | - | $ | - | $ | 364 | ||||||
APPENDIX
A – SPECIFIC ITEMS AFFECTING NET INCOME (LOSS)
Set
forth below are some of the significant items of income and expense that
affected the Company's net results for the second quarter and six-month periods
ended June 30, 2007 and 2008, all of which items are typically excluded by
securities analysts in their published estimates of the Company's financial
results:
|
(Expressed
in thousands of U.S. Dollars - except for share and per share
data)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Description
|
June
30, 2007
|
June
30, 2008
|
June
30, 2007
|
June
30, 2008
|
||||||||||||||||||||||||||||||||||||||||||||
|
As originally reported
under the deferral method
|
As computed under the
direct expense method
|
As originally reported
under the deferral method
|
As computed under the
direct expense method
|
|||||||||||||||||||||||||||||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||
| $ |
Per
Share
|
$ |
Per
Share
|
$ |
Per
Share
|
$ |
Per
Share
|
$ |
Per
Share
|
$ |
Per
Share
|
|||||||||||||||||||||||||||||||||||||
|
Reported
net income (loss)
|
5,789 | 0.53 | 7,276 | 0.67 | (5,589 | ) | (0.22 | ) | 6,736 | 0.62 | 10,275 | 0.95 | (24,430 | ) | (1.07 | ) | ||||||||||||||||||||||||||||||||
|
Restricted
share plan to officers and personnel (1)
|
145 | 0.01 | 145 | 0.01 | 465 | 0.02 | 296 | 0.03 | 296 | 0.03 | 948 | 0.04 | ||||||||||||||||||||||||||||||||||||
|
Change
of fair value of financial instruments
|
(1,292 | ) | (0.12 | ) | (1,292 | ) | (0.12 | ) | 2,301 | 0.09 | (3,003 | ) | (0.28 | ) | (3,003 | ) | (0.28 | ) | 11,160 | 0.49 | ||||||||||||||||||||||||||||
|
Specific
legal fees (2)
|
- | - | - | - | - | - | 192 | 0.02 | 192 | 0.02 | - | - | ||||||||||||||||||||||||||||||||||||
|
Amortization
of financing fees (3)
|
- | - | - | - | 2,563 | 0.10 | - | - | - | - | 3,614 | 0.16 | ||||||||||||||||||||||||||||||||||||
|
(Gain)
loss on sale of vessels
|
(1,961 | ) | (0.18 | ) | (1,961 | ) | (0.18 | ) | 382 | 0.02 | (1,961 | ) | (0.18 | ) | (1,961 | ) | (0.18 | ) | (200 | ) | (0.01 | ) | ||||||||||||||||||||||||||
|
Specific
repairs (4)
|
237 | 0.02 | 237 | 0.02 | 950 | 0.04 | 625 | 0.06 | 625 | 0.06 | 7,587 | 0.33 | ||||||||||||||||||||||||||||||||||||
|
Total
|
(2,871 | ) | (0.27 | ) | (2,871 | ) | (0.27 | ) | 6,661 | 0.26 | (3,851 | ) | (0.36 | ) | (3,851 | ) | (0.36 | ) | 23,109 | 1.02 | ||||||||||||||||||||||||||||
|
Net
income (loss) after specific items
|
2,918 | 0.26 | 4,405 | 0.40 | 1,072 | 0.04 | 2,885 | 0.26 | 6,424 | 0.59 | (1,321 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||||
|
(1)
Relates to stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
Relates to legal fees incurred due to the class action
lawsuit
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
Amortization of financing fees relating to bridge loan with DVB and
write-off of financing fees due to sale of vessels
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(4)
Special unexpected repairs, net of $1,172 and $1,297 of claims received
during the second quarter and first half of 2008,
respectively
|
||||||||||||||||||||||||||||||||||||||||||||||||
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TOP
SHIPS INC.
(registrant)
|
Dated: October
2, 2008
|
By:
|
/s/
Evangelos J. Pistiolis
|
||
|
Evangelos
J. Pistiolis
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Chief
Executive Officer
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SK 23116 0001
924278