Top Ships Inc (TOPS) 2008 Q3 法說會逐字稿

Greetings and welcome to TOP Ships Inc. third-quarter 2008 results conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to turn the conference over to your host, Michael Mason. Thank you. You may begin.

Thank you. Good morning and welcome to TOP Ships results conference call for the third quarter and nine months ended September 30, 2008. As mentioned by the operator, I'm Mike Mason of Allen and Caron Investor Relations.

Before we start the call, there are a couple of items I would like to cover. Many of you received a copy of the press release announcing the Company's results for its third quarter. It was released this morning at 7.35 a.m. Eastern time. If you did not receive a copy of the press release, it is posted in the client section of our website at www.allencaron.com or you can call our office in New York at 212-691-8087 and we will e-mail it to you right away. It is also posted on Yahoo! Finance.

This call is being broadcast live over the Internet at www.topships.org or Precision IR's webcast site at www.investorcalendar.com. The Internet replay will be available shortly after the end of the call and will continue for seven days. In addition, a telephonic replay of the conference call will be unavailable for seven days by calling 877-660-6853 from the US and Canada or 201-612-7415 from outside the US and Canada. Enter account number 286 and conference ID number 304010.

I would now like to turn the call over to Mr. Thomas Jackson, Chairman of the Board of Directors of TOP Ships. Good afternoon, Mr. Jackson.

Good afternoon, Michael, thank you. Good morning ladies and gentlemen. I am Tom Jackson, the Chairman of the Board of Directors of TOP Ships Inc. It is my great pleasure to welcome you to TOP Ships earnings conference call in respect of the third quarter and nine month period of 2008 financial results.

Before we begin, let me draw your attention to the fact that during the conference call, we might make certain forward-looking statements about the Company's future expectations including future revenues and earnings. Those statements and all those statements here today other than historical facts are forward-looking statements within the meaning of section 27A of the securities act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995.

Such forward-looking statements involve risks and uncertainties and are subject to change at any time and the Company's actual results could differ materially from expected results. The Company undertakes no obligation to publicly update forward-looking statements to reflect subsequently occurring events or circumstances.

The audit committee have reviewed and recommended to the Board the acceptance of the accounts for the third quarter and nine month period of 2008 as presented. And the Board of Directors in the meeting held this morning approved the accounts as presented.

With me today for our conference call are Mr. Evangelos Pistiolis, President and Chief Executive Officer and Mr. Alexandros Tsirikos, Treasurer. Mr. Pistiolis will provide you with details of TOP Ships operation, activities, and general expectations. Furthermore, he will provide you with an overall perspective of the international shipping market together with his perceived outlook.

Mr. Tsirikos will comment on the financial results of TOP Ships Inc. for the quarter and nine month period ended September 30, 2008. Following the financial highlights, the call will move into a Q&A session.

I would now like to pass you over to Mr. Evangelos Pistiolis.

Thank you, Tom. Good morning, ladies and gentlemen. For the three months ended September 30, 2008, our net income was $41,640,000 or $1.48 per share compared with a net of $21,986,000 or $1.80 per share for the third quarter of 2007. Revenues for the third quarter of 2008 were $71 million and $94,000 compared to $51,193,000 recorded in the third quarter of 2007.

For the nine months ended September 30, 2008, our net income was $17,210,000 or $0.70 per share compared with a net loss of $11,711,000 or $1.04 per share for the nine months ended September 30, 2007. Revenues for the nine months ended September 30, 2008 were $220,418,000 compared to $200,470,000 recorded in the nine months ended September 30, 2007.

We are pleased to see the Company reporting a quarter with solid operational and financial results. During the third quarter of 2008, we completed a number of transactions in order to enhance our shareholder's value. The most notable events of the quarter were, termination of five bareboat charges and recognition of $15.6 million deferred gain from the sale of the respective vessels. Delivery of five Suezmax tankers, Stainless, Limitless, Endless, Edgeless and Ellen P to the new owners and recognition of an $18.9 million net gain; conclusion of finance of our new buildings which was completed in early October 2008.

During the third quarter of 2008, the Company announced that it had entered into an exclusivity agreement with an affiliate of George Economou, a Greek ship owner, providing for the exploration by such affiliate of the possible acquisition of the Company at a potential price of $6.00 per share. This exclusivity agreement was set to expire on October 8, 2008 but was extended until October 22, 2008 at which date George Economou's affiliate entity offered to acquire each of the Company's issued and outstanding common shares for a purchase price of $3.00 per share in cash.

After consideration of numerous factors including the recent volatility in global markets and decline in the Company's share price on the NASDAQ Stock Exchange Market, the Company's Board of Directors determined that this offer was not in the best interest of shareholders.

Finally, our Board of Directors has authorized a share repurchase program up to $20 million with a duration of one year.

On that note, I will pass you over to Alexandros who will take you through some financial information.

Thank you, Evangelos. Good morning, ladies and gentlemen. For the three months ended September 30, 2008, we had a net income of $41.6 million or -- $1.48 per share compared with a net loss of $22 million or $1.80 per share for the third quarter of 2007. Revenues for the third quarter of 2008 were $71.1 million compared to $51.2 million recorded in the third quarter of 2007.

For the nine months ended September 30, 2008, our net income was $17.2 million or $0.70 per share compared with a net loss of $11.7 million or $1.04 per share for the nine months ended September 30, 2007. Revenues for the nine months ended September 30, 2008 were $220.4 million compared to $200.5 million recorded in the nine months ended September 30, 2007.

Fleet reports, as of September 30, 2008, our fleet consisted of 12 vessels or 0.6 million dead weight including five vessels sold and leased back for a period of five to seven years as compared to 20 vessels or 2.2 million dead weight on September 30, 2007. During the third quarter of 2008, we had approximately 81% of our fleet's operating days on long-term employment contracts.

As of September 30, 2008, 11 of our 12 vessels were on time chartered contracts with an average term of over two years with all but four of the time charters including profit sharing agreements and one vessel under bareboat charter with a term of over three years.

Tanker vessels. During the third quarter of 2008, five of our Suezmaxes operated in the spot market earning on average $61,053 per vessel per day on the time charter equivalent basis and three of our Suezmax tankers operated under time chartered contracts earning on average $38,343 per vessel per day on a time charter equivalent basis.

Currently all of our Handymax tankers are operating under long-term employment agreements that provide for a base rate and additional profit sharing. During the third quarter of 2008, including the profitsharing allocated to us, seven out of the eight Handymax tankers earned an average of $19,309 per vessel per day on a time charter equivalent basis and one Handymax tanker prior to its delivery to its new owners operated in the spot market earning on average $53,053 per vessel per day on a time chartered equivalent basis.

Drybulk vessels. During the third quarter of 2008, four out of the five drybulk vessels operated under time charter contracts and one under bareboat charter earning on average $50,042 per vessel per day on a time charter equivalent basis. This includes the amortization of the fair value of the time charter of $9,900 per vessel per day.

Liquidity and capital resources. As of September 30, 2008, our total debt under secured credit facilities was $317.4 million with the Royal Bank of Scotland, HSH Nordbank, DVB Bank, Alpha Bank and Emporiki Bank maturing from 2013 through 2019. Our debt to cap ratio is 52.5%. During the third quarter and early October 2008, the Company has entered into an agreement with three banks for the financing of its new buildings.

Now I will pass it on to Tom again.

Thank you, Alexandros. I would now like to pass the call back to the operator for the Q&A session.

(Operator Instructions) I am showing no questions in queue. I'd like to turn the call back over to Tom Jackson.

Thank you, ladies and gentlemen, for participating in this call. We look forward to talking to you again and sharing our continuing progress on our next quarterly conference call. Thank you and have a good day. Ladies and gentlemen, you may now disconnect your lines.