Top Ships Inc (TOPS) 2008 Q4 法說會逐字稿

Greetings and welcome to the TOP Ships, Inc. fourth-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 introduce your host, Mr. Michael Mason of Allen & Caron Investor Relations. Thank you, Mr. Mason. You may now begin.

Thanks very much. Good morning and welcome to TOP Ships results conference call for the fourth quarter and year ended December 31, 2008. As mentioned by the operator, I am Mike Mason of Allen & Caron Investor Relations.

Before we start the call, there are a couple of items I'd like to cover. Many of you received a copy of the press release announcing the Company's results for its fourth quarter and year-end. It was released this morning at 7.35 a.m. Eastern. If you did not receive a copy of the release, it is posted in the client section of our website at www.AllenCaron or you may call our office in New York at 212-691-8087 and we will email 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 website 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 replay of the conference call will be available for seven days by calling 877-660-6853 from US and Canada or 201-612-7415 from outside the US and Canada, and our account number 286 and conference ID number 319023.

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

Good afternoon. Thank you, Michael. Good morning, ladies and gentlemen. I am Tom Jackson, the Chairman of the Board of Directors of TOP Ships, Inc. It is my pleasure to welcome you to TOP Ships earnings conference call in respect to the fourth quarter and full-year 2008 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 other 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 fourth quarter and full-year 2008 as presented and the Board of Directors has 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, Chief Financial Officer. Mr. Pistiolis will provide you with details of TOP Ships operations, activities, and general expectations. Furthermore, he will provide you with an overall perspective of the international tanker market together with his perceived outlook.

Mr. Tsirikos will comment on the financial results of TOP Ships, Inc. for the quarter ended December 31 and full-year 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 December 31, 2008, our net income was $8.429 million or $0.30 per share, compared with a net loss of $37.439 million or $2.67 per share for the fourth quarter of 2007. For the three months ended December 31, 2008, operating income was $7.952 million compared with operating loss of $25.982 million for the fourth quarter of 2007.

Revenues for the fourth quarter of 2008 were $36.962 million, compared to $51.789 million recorded in the fourth quarter of 2007. For the year ended December 31, 2008, our net income was $25.639 million or $1.01 per share compared with a net loss of $49.076 million or $4.09 per share for the year ended December 31, 2007.

For the year ended December 31, 2008, operating income was $61.723 million compared with operating loss of $29.118 million for the year ended December 31, 2007. Revenues for the year ended December 31, 2008 were 257.380 million compared to $252.259 million recorded in the year ended December 31, 2007.

The latter part of 2008 was very challenging for the shipping industry and the world economy overall. Despite the challenges faced, we achieved another quarter with solid results, which is a product of our successful strategic decision that were implemented throughout the year. Specifically during 2008, we sold seven owned Suezmax tankers and one owned Panamax drybulk vessel for an aggregate sales price of $380.5 million.

These sales enhanced our liquidity and created the cash cushion during a period where liquidity is key to the survival of any company. We arranged the sale of six chartered-in vessels and the bareboat charters and terminated the respective charters. We completed the refinancing of our six new building product tankers and we chartered all six vessels with three major charters at fixed rates for periods that range between seven to 10 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.

We took delivery of our drybulk vessels, which are currently deployed on time charters at premium rates. Development during the fourth quarter of 2008 included the breach of certain loan covenants. We are currently in advanced discussions with our lending banks to receive waivers of the covenants to 2010. We terminated an interest rate derivative product for $5 million. When we entered into this product in November 2007, we had received an upfront payment of $8.5 million.

We completed the refinancing of our new building product tankers, four of which have already been delivered to the bareboat charters. We commenced our share repurchase program, which allows the Company to purchase up to $20 million in our shares over a period of one year.

Finally, I would like to welcome Mr. Alexandros Tsirikos as the new Chief Financial Officer of TOP Ships and wish him all the best in his new position. Mr. Tsirikos has been employed at TOP Ships since July 2007 as our Corporate Development Officer and now Alexandros will take you through the figures.

Thank you, Evangelos. Good morning, ladies and gentlemen. For the three months ended December 31, 2008, we had net income of $8.4 million or $0.30 per share compared with a net loss of $37.4 million or $2.67 per share for the fourth quarter of 2007. For the three months ended December 31, 2008, our operating income was $8 million, compared with operating loss of $26 million for the fourth quarter of 2007.

Revenues for the fourth quarter of 2008 were $37 million compared to $51.8 million recorded in the fourth quarter of 2007. For the year ended December 31, 2008, our net income was $25.6 million or $1.01 per share, compared with net loss of $49.1 million or $4.09 per share for the year that ended December 31, 2007.

For the year ended December 31, 2008, operating income was $61.7 million, compared with operating loss of $29.1 million for the year ended December 31, 2007. Revenues for the year ended December 31, 2008 were $257.4 million, compared to $252.3 million recorded in the preceding year.

Fleet reports, as of December 31, 2008, our fleet consisted of 12 vessels or 0.6 million of deadweight, including seven owned and five vessels sold and leased back for a period of five to seven years as compared to 23 vessels or 2.2 million deadweight, including 11 vessels sold and leased back for a period of five to seven years the preceding year. Our fleet size and composition remained unchanged during the fourth quarter of 2008.

Tanker vessels, all of our Handymax tankers operate under long-term employment agreements that provide for a base rate and additional profit sharing. During the fourth quarter of 2008, our Handymax tankers earned an average $18,998 per vessel per day on a time charter equivalent basis including profit sharing allocated to the Company.

Drybulk vessels, during the fourth quarter of 2008, four of our drybulk vessels operated under time chartered contracts and one under bareboat charter, earning on average $53,070 per share -- I'm sorry, per vessel per day on a time charter equivalent basis including the amortization of the fair value of time charter contracts of $14,492 per vessel per day.

Liquidity and capital resources, as of December 31, 2008, we had total investment under senior secured credit facilities of $346.9 million excluding unamortized financial fees of $4.4 million. With its lenders, the Royal Bank of Scotland, HSH Nordbank, DVB Bank, Alpha Bank, and Emporiki Bank maturing from 2013 through 2019. Our unencumbered cash as of December 31, 2008 was $46.2 million.

Loan covenants and discussions with banks, as of December 31, 2008, we were not in compliance with certain of our loan covenants. As of the date of this release, we are in advanced discussion with all our lenders in order to receive waivers for such noncompliance extending until the end of March 2010 but no definitive agreement has yet been signed. In order to receive waivers, we may have to amend standard terms of our existing financial agreements.

Now I 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) Thank you, gentlemen. There are no questions at this time. I would like to hand the floor back over to you.

Thank you, operator. That completes the Q&A session for today. 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 quarter conference call.

Thank you and have a good day. Ladies and gentlemen, you may now disconnect your lines.

Thank you for your participation.