Safe Bulkers, Inc. Reports Second Quarter and First Half 2012 Results and Declares Quarterly Dividend

News Release Safe Bulkers, Inc. August 6, 2012

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Athens, Greece – August 6, 2012 -- Safe Bulkers, Inc.
(the “Company”) (NYSE: SB), an
international provider of marine drybulk
transportation services, announced today its
unaudited financial results for the three- and six-months periods
ended June 30, 2012. The
Company’s Board of Directors also declared a quarterly dividend of
$0.15 per share for the
second quarter of 2012.
Summary of Second Quarter 2012 Results
 Net revenue for the second quarter of 2012 increased by
14% to $47.0 million from $41.2
million during the same period in 2011.
 Net income for the second quarter of 2012 increased by
13% to $21.5 million from $19.1
million during the same period in 2011. Adjusted net
income1 for the second quarter of 2012
decreased by 7% to $23.7 million from $25.5 million, during the
same period in 2011.
 EBITDA2 for the second
quarter of 2012 increased by 24% to $31.6 million from $25.5
million during the same period in 2011. Adjusted
EBITDA1 for the second quarter of 2012
increased by 6% to $33.7 million from $31.9 million during the
same period in 2011.
 Earnings per share (“EPS”) and Adjusted
EPS1 for the second quarter of 2012 was $0.28 and
$0.31 respectively, calculated on a weighted average number of
shares of 76,653,848,
compared to $0.27 and $0.36, respectively, for the same period in
2011, calculated on a
weighted average number of shares of
70,116,022.
 The Company’s Board of Directors declared a dividend of
$0.15 per share for the second
quarter of 2012.
1 Adjusted net income, Adjusted EPS and Adjusted EBITDA
represent Net Income, EPS and EBITDA before
gain/(loss) on sale of assets, early redelivery income/(cost) and
gain/(loss) on derivatives and foreign currency
respectively. See Table 1.
2 EBITDA represents net income plus interest expense, tax,
depreciation and amortization. See Table 1.
Summary of Six Months Ended June 30, 2012
Results
 Net revenue for the first six months of 2012 increased by
9.1% to $91.1 million from $83.5
million during the same period in 2011.
 Net income for the first six months of 2012 decreased by
6.9% to $43.2 million from $46.4
million during the same period in 2011. Adjusted net income for
the first six months of 2012
decreased by 12% to $46.5 million from $52.9 million during the
same period in 2011.
 EBITDA for the first six months of 2012 increased by 4%
to $62.3 million from $59.9
million during the same period in 2011. Adjusted EBITDA for the
first six months of 2012
decreased by 1% to $65.6 million from $66.4 million during the
same period in 2011.
 EPS and Adjusted EPS for the first six months of 2012 was
$0.58 and 0.63, respectively,
calculated on a weighted average number of shares of 74,261,399,
compared to $0.68 and
$0.78 for the same period in 2011, calculated on a weighted
average number of shares of
68,010,508.
Fleet and Employment Profile
As of July 31, 2012, the Company’s current fleet was comprised of
21 drybulk vessels with an
average age of 4.2 years and the Company had contracted to acquire
eight newbuild drybulk
vessels with deliveries scheduled at various times through
2014.
In May 2012, we took delivery of the vessel Pedhoulas
Builder, an 81,600 dwt newbuild
Kamsarmax-class vessel.
Set out below is a table showing the Company’s current fleet and
contracted newbuild vessels
and their contracted employment.
Vessel Name DWT Year
Built (1)
Country of
construction
Charter
Rate (2)
USD/day
Charter Duration (3)
Current Fleet
Panamax
Maria 76,000 2003 Japan 20,250 Apr 2011 – Apr
2014
Vassos 76,000 2004 Japan 29,000 Nov 2008 – Oct
2013
Katerina 76,000 2004 Japan
20,000 Feb 2011 – Feb 2014
Maritsa 76,000 2005 Japan
28,069 Mar 2010 – Mar 2015
Efrossini 75,000 2012 Japan
15,700 Jul 2012 – Oct 2012
Kamsarmax
Pedhoulas Merchant 82,300 2006 Japan
18,350 Aug 2011 – Aug 2013
Pedhoulas Trader 82,300 2006 Japan
41,850
BPI +
6.5%(4)
Aug 2008 – Jul 2013
Aug 2013 – Jul 2015
Pedhoulas Leader 82,300 2007 Japan
13,250 Jun 2012 – May 2014
Pedhoulas Builder 81,600 2012 China
11,300 Jun 2012 – Aug 2012
Post-Panamax
Stalo 87,000 2006 Japan 34,160 Mar 2010 – Feb
2015
Marina 87,000 2006 Japan 41,557 Dec 2008 – Dec
2013
Sophia 87,000 2007 Japan 34,720 Oct 2008 – Sep
2013
Eleni 87,000 2008 Japan 41,738 Apr 2010 – Mar
2015
Martine 87,000 2009 Japan
40,500 Feb 2009 – Feb 2014
Andreas K 92,000 2009 South
Korea 7,250 Jul 2012 – Aug 2012
Panayiota K 92,000 2010 South
Korea 15,750 Jul 2012 – Oct 2012
Venus Heritage 95,800 2010 Japan
12,250 Mar 2012 – Oct 2012
Venus History 95,800 2011 Japan
11,000 Jul 2012 – Sep 2012
Venus Horizon 95,800 2012 Japan
10,000 Jul 2012 – Aug 2012
Capesize
Kanaris 178,100 2010 China
25,928 Sep 2011 – Jun 2031
Pelopidas 176,000 2011 China
38,000 Jan 2012 – Dec 2021
Subtotal 1,968,000
Newbuilds
Panamax
Hull No. 814 75,000 2H 2013
Japan
Hull No. 1659 76,600 2H 2013
Japan
Hull No. 1660 76,600 1H 2014
Japan
Kamsarmax
Hull No. 617 82,000 2H 2012
China
Hull No. 631 82,000 2H 2012 China
(BPI + 4%)
-1,000 (5)
Aug 2012 – Jul 2013
Post-Panamax
Hull No. 2396 84,000 2H 2014
Japan
Hull No. 2397 84,000 2H 2014
Japan
Capesize
Hull No. 131 180,000 2H 2012 China 24,810
Dec 2012 – Dec 2022
Subtotal 740,200
Total 2,708,200
1) For newbuilds, the date shown reflect the expected delivery
date.
2) Charter rate represents the recognized gross daily charter
rate. For charter parties with
variable rates among periods or consecutive charter parties with
the same charterer, the
recognized gross daily charter rate represents the weighted
average gross charter rate
over the duration of the applicable charter period or series of
charter periods, as
applicable.
3) The start dates listed reflect either actual start dates or, in
the case of contracted charters
that had not commenced as of July 31, 2012, scheduled start dates.
Actual start dates
and redelivery dates may differ from the scheduled start and
redelivery dates depending
on the terms of the charter and market conditions.
4) A period time charter with a forward delivery date in August of
2013 for a duration of 23
to 25 months, at a gross daily charter rate linked to the Baltic
Panamax Index (“BPI”)
plus a premium of 6.5%.
5) A period time charter with a forward delivery date in August of
2012 for a duration of 10
to 12 months, at a gross daily charter rate linked to the BPI plus
a premium of 4%. Net
daily charter rate payable will be reduced by an amount of
$1,000.
The Company’s charter coverage3 for the
following periods, based on the Company’s best
estimates as of July 31, 2012, was:
2012 (remaining) ……………….....76%
2012 (full year) ……………………89%
2013 …..…………………………...59%
2014 …..…………………………..30%
3 Charter coverage is determined, for the referenced
period, by dividing the total number of contracted days by
the total number of ownership days for existing vessels and for
newbuild vessels upon their delivery to us.
Capital Expenditure Requirements and Liquidity as of July 31,
2012
As of July 31, 2012, the remaining capital expenditure
requirements for amounts due to
shipyards or sellers of newbuilds, net of commissions, for the
delivery of the Company’s
eight newbuilds amounted to $186.6 million, of which $48.2 million
was scheduled to be
paid in 2012, $59.6 million in 2013 and $78.8 million in 2014.
As of July 31, 2012, the Company had $11.3 million in cash and
short-term time deposits,
$5.4 million in long-term restricted cash, and estimated aggregate
borrowing capacity of
$224.1 million, consisting of $72.0 million in undrawn or
committed loan facilities, $112.1
million available under existing revolving credit facilities and
$40.0 million undrawn
availability against the Company’s $50.0 million floating rate
note.
Additionally, the Company utilizes cash flow from operations
generated by its contracted
period time charters and has the option to borrow additional
amounts secured by one or more
of its seven debt-free newbuilds, upon their delivery to
us.
Dividend Declaration
The Company’s Board of Directors declared a cash dividend on the
Company’s common
stock of $0.15 per share payable on or about August 31, 2012 to
shareholders of record at the
close of trading of the Company's common stock on the New York
Stock Exchange (the
“NYSE”) on August 24, 2012.
The Company has 76,656,279 shares of common stock issued and
outstanding as of August
6, 2012.
The Board of Directors of the Company is continuing a policy of
paying out a portion of the
Company’s free cash flow at a level it considers prudent in light
of the current economic and
financial environment. The declaration and payment of dividends,
if any, will always be
subject to the discretion of the Board of Directors of the
Company. The timing and amount of
any dividends declared will depend on, among other things: (i) the
Company’s earnings,
financial condition and cash requirements and available sources of
liquidity, (ii) decisions in
relation to the Company’s growth strategies, (iii) provisions of
Marshall Islands and Liberian
law governing the payment of dividends, (iv) restrictive covenants
in the Company’s existing
and future debt instruments and (v) global financial conditions.
Accordingly, dividends might
be reduced or not be paid in the future.
Management Commentary
Dr. Loukas Barmparis, President of the Company, said: "Charter
market conditions are
challenging, while bank financing is generally scarce. Our
revenues in the current depressed
charter market have been supported by agreements entered into
during earlier periods. In this
environment, asset prices have dropped significantly offering
acquisition opportunities
attractive for companies like ours which have managed to avoid
financial distress and comply
with their debt covenants. Our management team cautiously monitors
market conditions. We
believe that having a young and modern fleet, which is expected to
reach 29 vessels by 2014,
will leave us well-positioned for the next shipping
cycle.''
Conference Call
On Tuesday, August 7, 2012 at 9:00 A.M. EDT, the Company’s
management team will host
a conference call to discuss the financial results.
Participants should dial into the call 10 minutes before the
scheduled time using the following
numbers: 1 (866) 819-7111 (US Toll Free Dial In), 0(800) 953-0329
(UK Toll Free Dial In)
or +44 (0)1452-542-301 (Standard International Dial In).
Please quote “Safe Bulkers” to the
operator.
A telephonic replay of the conference call will be available until
August 17, 2012 by dialing
1 (866) 247-4222 (US Toll Free Dial In), 0(800) 953-1533 (UK Toll
Free Dial In) or +44
(0)1452 550-000 (Standard International Dial In). Access Code:
1859591#
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the
conference call, available through
the Company’s website (www.safebulkers.com). Participants in
the live webcast should
register on the website approximately 10 minutes prior to the
start of the webcast.
Management Discussion of Second Quarter 2012
Results
Net income increased by 13% to $21.5 million for the second
quarter of 2012 from $19.1
million for the second quarter of 2011, mainly due to the
following factors:
Net revenues: Net revenues
increased by 14% to $47.0 million for the second quarter of
2012, compared to $41.2 million for the same period in 2011,
mainly due to an increased
number of operating days. The Company owned 20.35 vessels on
average during the second
quarter of 2012, earning a TCE4 rate of
$24,168, compared to 16 vessels and a TCE rate of
$27,921 during the same period in 2011.
Vessel operating expenses: Vessel operating
expenses increased by 29% to $8.4 million for
the second quarter of 2012, compared to $6.5 million for the same
period in 2011. The
increase in operating expenses is mainly attributable to an
increase in ownership days by
27.2% to 1,852 days for the second quarter of 2012 from 1,456 days
for the same period in
2011. Daily vessel operating expenses increased by 1% to $4,526
for the second quarter of
2012, compared to $4,479 for the same period in
2011.
Depreciation: Depreciation
increased to $7.9 million for the second quarter of 2012,
compared to $5.6 million for the same period in 2011, as a result
of the increase in the
average number of vessels owned by the Company during the second
quarter of 2012.
Voyage expenses: Voyage expenses
increased to $2.3 million for the second quarter of 2012,
compared to $0.8 million for the same period in 2011, as a result
of increased vessel repositioning
expenses.
Interest expense: Interest expense
increased by 133% to $2.1 million in the second quarter of
2012 from $0.9 million for the same period in 2011, mainly due to
a higher weighted average
loan balance and a higher weighted average interest
rate.
4 Time charter equivalent rates, or TCE rates, represent
the Company’s charter revenues less commissions and
voyage expenses during a period divided by the number of our
available days during the period.
Loss on derivatives: Loss on derivatives
decreased to $2.1 million in the second quarter of
2012, compared to a loss of $6.1 million for the same period in
2011, as a result of changes in
the mark-to-market valuations of the Company’s interest rate swap
transactions that the
Company’s employs to manage the risk and interest rate exposure of
the Company’s loan and
credit facilities. These swaps economically hedge the interest
rate exposure of the Company’s
aggregate loans outstanding. The average remaining period of the
Company’s swap contracts
is 2.3 years as of June 30, 2012. The valuation of these interest
rate swap transactions at the
end of each quarter is affected by the prevailing interest rates
at that time.
Unaudited Interim Financial Information and Other
Data
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands of U.S. Dollars except for share and per share
data)
Three-Months Period Ended
June 30,
Six-Months Period Ended
June 30,
2011 2012 2011 2012
REVENUES:
Revenues 41,974 47,875 85,019 92,679
Commissions (788) (860) (1,559) (1,591)
Net revenues 41,186 47,015 83,460 91,088
EXPENSES:
Voyage expenses (756) (2,255) (807) (3,566)
Vessel operating expenses (6,521) (8,383) (12,266) (16,480)
Depreciation (5,645) (7,898) (11,227) (15,219)
General and administrative expenses (1,954) (2,469) (3,892)
(4,802)
Early redelivery income - - 101 -
Operating income 26,310 26,010 55,369 51,021
OTHER (EXPENSE) / INCOME:
Interest expense (926) (2,071) (2,642) (3,896)
Other finance costs (63) (219) (120) (610)
Interest income 242 272 528 553
Loss on derivatives (6,145) (2,127) (6,151) (3,368)
Foreign currency (loss)/gain (222) 10 (391) -
Amortization and write-off of deferred finance
charges (89) (332) (178) (544)
Net income 19,107 21,543 46,415 43,156
Earnings per share 0.27 0.28 0.68 0.58
Weighted average number of shares 70,116,022 76,653,848 68,010,508
74,261,399
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands of U.S. Dollars)
December 31, 2011 June 30, 2012
ASSETS
Cash, time deposits 28,121 7,964
Other current assets 9,838 12,865
Vessels, net 655,356 762,311
Advances for vessel acquisition and vessels
under construction 122,307 77,721
Restricted cash non-current 5,423 5,423
Long-term investment 50,000 50,000
Other non-current assets 6,226 6,429
Total assets 877,271 922,713
LIABILITIES AND EQUITY
Current portion of long-term debt 18,486 19,196
Other current liabilities 33,187 38,269
Long-term debt, net of current portion 465,805 460,515
Other non-current liabilities 27,951 16,570
Shareholders’ equity 331,842 388,163
Total liabilities and equity 877,271
922,713
Fleet Data 2012
Three-Months
Period Ended
June 30,
Six-Months
Period Ended
June 30,
2011 2012 2011 2012
FLEET DATA
Number of vessels at period’s end 16 21 16 21
Average age of fleet (in years) 4.30 4.14 4.30 4.14
Ownership days (1) 1,456 1,852 2,896 3,570
Available days (2) 1,448 1,852 2,888 3,570
Operating days (3) 1,443 1,825 2,883 3,541
Fleet utilization (4) 99.1% 98.5% 99.6% 99.2%
Average number of vessels in the
period (5) 16.00 20.35 16.00 19.62
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $27,921 $ 24,168 $28,619 $
24,516
Daily vessel operating expenses (7) $4,479 $ 4,526 $4,235 $
4,616
_____________
(1) Ownership days represent the aggregate number of days in a
period during which each vessel in the
Company’s fleet has been owned by the Company.
(2) Available days represent the total number of days in a period
during which each vessel in the
Company’s fleet was in the Company’s possession net of off-hire
days associated with scheduled
maintenance, which includes major repairs, drydockings, vessel
upgrades or special or intermediate
surveys.
(3) Operating days represent the number of the Company’s available
days in a period less the aggregate
number of days that the Company’s vessels are off-hire due to any
reason, excluding scheduled
maintenance.
(4) Fleet utilization is calculated by dividing the number of the
Company’s operating days during a period
by the number of the Company’s ownership days during that
period.
(5) Average number of vessels in the period is calculated by
dividing ownership days in the period by the
number of days in that period.
(6) Time charter equivalent rates, or TCE rates, represent the
Company’s charter revenues less
commissions and voyage expenses during a period divided by the
number of the Company’s available
days during that period.
(7) Daily vessel operating expenses include the costs for crewing,
insurance, lubricants, spare parts,
provisions, stores, repairs, maintenance, statutory and
classification expense, drydocking, intermediate
and special surveys and other miscellaneous items. Daily vessel
operating expenses calculated by
dividing vessel operating expenses by ownership days for the
relevant period.
TABLE 1
RECONCILIATION OF ADJUSTED NET INCOME, EBITDA, ADJUSTED EBITDA
AND ADJUSTED EPS
Three-Months
Period Ended June 30,
Six-Months
Period Ended June 30,
(In thousands of U.S. Dollars except for share and per share data)
2011 2012 2011 2012
Net Income - Adjusted Net Income
Net Income 19,107 21,543 46,415 43,156
Less Gain on Sale of Assets - - - -
Less Early Redelivery Income - - (101) -
Plus Loss on Derivatives 6,145 2,127 6,151 3,368
Plus Foreign Currency Loss/(gain) 222 (10) 391
-
Adjusted Net Income 25,474 23,660 52,856
46,524
EBITDA - Adjusted EBITDA
Net Income 19,107 21,543 46,415 43,156
Plus Net Interest Expense 684 1,799 2,114 3,343
Plus Depreciation 5,645 7,898 11,227 15,219
Plus Amortization 89 332 178 544
EBITDA 25,525 31,572 59,934 62,262
Less Gain on Sale of Assets - - - -
Less Early Redelivery Income - - (101) -
Plus Loss on Derivatives 6,145 2,127 6,151 3,368
Plus Foreign Currency Loss/(gain) 222 (10) 391
-
ADJUSTED EBITDA 31,892 33,689 66,375
65,630
EPS – Adjusted EPS
Net Income 19,107 21,543 46,415 43,156
Adjusted Net Income 25,474 23,660 52,856 46,524
Weighted average number of shares 70,116,022 76,653,848 68,010,508
74,261,399
EPS 0.27 0.28 0.68 0.58
Adjusted EPS 0.36 0.31 0.78 0.63
EBITDA represents net income before interest, income tax expense,
depreciation and amortization. Adjusted
EBITDA represents EBITDA before gain/(loss) on sale of assets,
early redelivery income/(cost) and gain/(loss)
on derivatives and foreign currency. EBITDA and adjusted EBITDA
are not recognized measurements under
US GAAP. EBITDA and adjusted EBITDA assist the Company’s
management and investors by increasing the
comparability of the Company’s fundamental performance from period
to period and against the fundamental
performance of other companies in the Company’s industry that
provide EBITDA and adjusted EBITDA
information. The Company believes that EBITDA and adjusted EBITDA
are useful in evaluating the
Company’s operating performance compared to that of other
companies in the Company’s industry because the
calculation of EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects
of capital expenditures and acquisitions and the calculation of
adjusted EBITDA generally further eliminates the
effects from gain/(loss) on sale of assets, early redelivery
income/(cost) and gain/(loss) on derivatives and
foreign currency, items which may vary for different companies for
reasons unrelated to overall operating
performance.
EBITDA, adjusted EBITDA, Adjusted Net Income and Adjusted EPS have
limitations as analytical tools, and
should not be considered in isolation, or as a substitute for
analysis of the Company’s results as reported under
US GAAP. EBITDA and adjusted EBITDA should not be considered as
substitutes for net income and other
operations data prepared in accordance with US GAAP or as a
measure of profitability. While EBITDA and
adjusted EBITDA are frequently used as measures of operating
results and performance, are not necessarily
comparable to other similarly titled captions of other companies
due to differences in methods of calculation.
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk
transportation services,
transporting bulk cargoes, particularly coal, grain and iron ore,
along worldwide shipping
routes for some of the world’s largest users of marine drybulk
transportation services. The
Company’s common stock is listed on the NYSE, where it trades
under the symbol “SB”.
The Company’s current fleet consists of 21 drybulk vessels, all
built post-2003, and the
Company has contracted to acquire eight additional drybulk
newbuild vessels to be delivered
at various times through 2014.
Forward-Looking Statements
This press release contains forward-looking statements (as defined
in Section 27A of the
Securities Exchange Act of 1933, as amended, and in Section 21E of
the Securities Act of
1934, as amended) concerning future events, 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. 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
that 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 drybulk
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 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 further information please contact:
Company Contact:
Dr. Loukas Barmparis
President
Safe Bulkers, Inc.
30-32 Karamanli Avenue
Voula, 166 05
Athens, Greece
Tel.: +30 (210) 899-4980
Fax: +30 (210) 895-4159
E-Mail: directors@safebulkers.com
Investor Relations / Media Contact:
Nicolas Bornozis, President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, N.Y. 10169
Tel.: (212) 661-7566
Fax: (212) 661-7526
E-Mail: safebulkers@capitallink.com</DIV></BODY></HTML>