|Print Page | Close Window|
|General Maritime Corporation Announces Selected Third Quarter and Nine Months 2011 Financial Results|
NEW YORK, Nov. 2, 2011 /PRNewswire via COMTEX/ --
General Maritime Corporation (NYSE: GMR) today announced selected financial results for the three and nine months ended September 30, 2011.
Financial Review: Third Quarter 2011
For the three months ended September 30, 2011, excluding certain estimated non-cash items described below, the Company recorded a net loss of $55.1 million or $0.46 basic and $0.46 diluted loss per share for the quarter compared to a net loss of $24.9 million or $0.29 basic and $0.29 diluted loss per share for the prior year period. Non-cash items for the three months ended September 30, 2011 include a $10.7 million impairment relating to the Genmar Revenge which was classified as "held-for-sale" in August 2011, a $1.2 million loss relating to the disposal of vessel equipment as well as a $29.7 million mark-to-market unrealized gain on the warrants issued in connection with the Oaktree refinancing. Non-cash items for the prior year period included $1.1 million of non-cash other expenses and a small loss on the disposal of vessel equipment. The increase in net loss was primarily the result of a decrease of approximately 52.8% in spot TCE rates to $8,455 per day for the three months ended September 30, 2011 compared to $17,899 per day for the prior year period, as well as an increase of approximately 46.1% in net interest expense to $31.2 million for the three months ended September 30, 2011 compared to $21.4 million for the prior year period.
The Company recorded a net loss of $37.2 million or $0.31 basic and $0.31 diluted loss per share for the three months ended September 30, 2011 compared to net loss of $26.0 million or $0.30 basic and $0.30 diluted loss per share for the three months ended September 30, 2010.
Net voyage revenue, which is gross voyage revenues minus voyage expenses unique to a specific voyage (including port, canal and fuel costs), decreased approximately 34.1% to $37.9 million for the three months ended September 30, 2011 compared to $57.6 million for the three months ended September 30, 2010. This decrease is primarily due to decreases in estimated time charter and spot TCE rates for the three months ended September 30, 2011 compared to the prior year period. In addition to the decline in spot TCE rates discussed above, the average time charter rate earned on the Company's vessels decreased approximately 22.9% to $15,731 from $20,411 for the same periods.
Adjusted EBITDA (which is calculated in accordance with the methodology set forth in the Reconciliation Rider below), for the three months ended September 30, 2011 decreased approximately 91.1% to $2.1 million compared to $24.1 million for the prior year period (see below for a reconciliation of Adjusted EBITDA to net loss).
Total vessel operating expenses, which are direct vessel operating expenses and general and administrative expenses, increased approximately 0.7% to $35.9 million for the three months ended September 30, 2011 from $35.7 million for the three months ended September 30, 2010. Total vessel operating expenses is a measurement of the Company's total expenses associated with operating its vessels.
Direct vessel expenses increased by approximately 1.6% to $26.8 million for the three months ended September 30, 2011 compared to $26.3 million for the prior year period. Over the same periods, daily direct vessel expenses increased approximately 0.8% from $8,486 per day to $8,556 per day. This estimated increase reflects higher crew costs for the Company's Suezmax and Aframax vessels during the three months ended September 30, 2011 compared to the prior year period. In addition, maintenance and repair costs for certain Suezmax and Aframax vessels were higher for vessels undergoing external repairs during the three months ended September 30, 2011 compared to the prior year period. Suezmax daily direct vessel expenses increased approximately 4.6% to $8,405 per day for the three months ended September 30, 2011 from $8,034 per day for the prior year period. Daily expenses for the Aframax fleet increased approximately 6.4% to $9,010 per day for the three months ended September 30, 2011 compared to $8,468 for the prior year period. Partially offsetting the increased costs for Suezmaxes and Aframaxes, was a decrease in daily costs on the Company's VLCCs for the three months ended September 30, 2011 compared to the prior year period as well as higher costs associated with main engine spares on the Genmar Victory for the three months ended September 30, 2010 which did not recur in the three months ended September 30, 2011. VLCC daily direct vessel costs decreased by approximately 14.4% to $9,382 per day for the three months ended September 30, 2011 from $10,961 per day for the prior year period. Costs associated with the Panamax fleet were essentially flat from the prior year period. Costs associated with the Handymax fleet were slightly lower than the prior year period due to higher stores and repair costs associated with the Genmar Concord in the prior year period which did not recur in the three months ended September 30, 2011.
General and administrative costs decreased by approximately 1.8% to $9.2 million for the quarter ended September 30, 2011 compared to $9.3 million for the prior year period. This reflects an estimated increase of $2.1 million relating to additional professional fees incurred with planning for a possible corporate restructuring and other bank amendments a decrease of $1.8 million due to lower personnel costs in the New York office as well as a $0.3 million decrease in certain reserve accounts compared to the prior year period.
Financial Review: Nine Months Ended September 30, 2011
For the nine months ended September 30, 2011, excluding a $44.3 million mark-to-market unrealized gain on the warrants issued in connection with the Oaktree refinancing, the $10.7 million impairment relating to the Genmar Revenge mentioned above, a $6.1 million loss on the disposal of vessel equipment and a $1.8 million impairment of goodwill, the Company reported a net loss of $118.4 million or $1.12 basic and $1.12 diluted loss per share for the nine months ended September 30, 2011. Net loss for the prior year period, excluding $1.3 million non-cash loss for other expenses and loss on disposal of vessel equipment, was $48.1 million or $0.72 basic and $0.72 diluted loss per share.
Net loss for the nine months ended September 30, 2011 was $92.7 million or $0.88 basic and $0.88 diluted loss per share, compared to a net loss of $49.4 million or $0.74 basic and $0.74 diluted loss per share for the prior year period.
The net loss was primarily due to a decrease of approximately 23.3% in full fleet TCE to $16,812 per day for the nine months ended September 30, 2011 from $21,915 per day for the prior year period. Additionally, direct vessel expenses and net interest expense increased approximately 12.4% to $84.1 million and approximately 37.0% to $81.1 million, respectively, for the nine months ended September 30, 2011 from $74.9 million and $59.2 million for the prior year period.
Adjusted EBITDA decreased approximately 54.0% to $39.3 million for the nine months ended September 30, 2011, compared to $85.5 million for the prior year period (see below for a reconciliation of Adjusted EBITDA to net loss). Net cash used by operating activities was $8.9 million for the nine months ended September 30, 2011, compared to net cash provided by operating activities of $21.9 million for the prior year period. Total vessel operating expenses increased approximately 8.7% to $112.4 million for the nine months ended September 30, 2011, compared to $103.4 million for the prior year period.
Summary Consolidated Financial and Other Data
The following table summarizes General Maritime Corporation's selected consolidated financial and other data for the three and nine months ended September 30, 2011 and 2010. Attached to this press release is an Appendix, which contains additional financial, operational and other data for the three and nine months ended September 30, 2011 and 2010.
General Maritime Corporation's Fleet
As of November 2, 2011, General Maritime Corporation's fleet consists of 7 VLCCs, 12 Suezmaxes, 8 Aframaxes, 2 Panamaxes and 1 Handymax. Additionally, there are 3 Handymaxes chartered-in on bareboat charters. The total owned deadweight tonnage (DWT) is approximately 5.1 million. The total controlled DWT for the 33 vessels is 5.2 million. The weighted average age of the controlled fleet is currently 8.1 years old.
The table below outlines the Company's vessels which are on time charter as of November 2, 2011, their charter rates and the expiration dates for the charters. Currently, the Company has 12 vessels or 35% of its fleet on time charter.
Heidmar Pool Update
On July 5, 2011, the Company announced it had agreed to enter into the Seawolf Pool managed by Heidmar Inc. for the commercial management of its 7 VLCCs. Four vessels are currently trading in the pool (the Genmar Ulysses, Genmar Zeus, Genmar Vision and Genmar Hercules). The Genmar Victory is expected to enter the pool upon the completion of is time charter in February 2012.
Additionally, the Genmar Atlas and the Genmar Poseidon are on time charters to Heidmar for a 12-month period at market rates subject to a floor of $15,000 per day and a profit share of 50/50 above $30,000 per day. Heidmar deploys these vessels in the Seawolf Pool.
Sale of Genmar Revenge
On October 4, 2011, the Company entered into a Memorandum of Agreement (the "MOA") for the sale of the Genmar Revenge ('94 Aframax) for net sales proceeds of $8.1 million. The sale closed on October 26, 2011. The vessel was otherwise due for drydock in Q4 2011 for total costs of approximately $3-4 million. Pursuant to its credit agreements, the Company used all of the proceeds to repay first lien debt.
About General Maritime Corporation
General Maritime Corporation is a leading crude and products tanker company serving principally within the Atlantic basin, which includes ports in the Caribbean, South and Central America, the United States, West Africa, the Mediterranean, Europe and the North Sea. General Maritime also currently operates tankers in other regions including the Black Sea and Far East. General Maritime owns a fully double-hull fleet of 30 tankers - seven VLCC, twelve Suezmax, eight Aframax and two Panamax tankers and one products tanker - with a total carrying capacity of approximately 5.1 million DWT. The Company also has three product tankers that are chartered-in with options to purchase the vessels. The Company controls tonnage totaling 5.2 million DWT including the owned fleet and the chartered-in fleet.
Previously Announced Conference Call
The Company has previously announced that it is reviewing its financing options and considering various alternatives with respect to the restructuring of its capital structure. Therefore, the Company will not hold the conference call to discuss the Company's results for the third quarter of 2011, previously scheduled for Thursday, November 3, 2011 at 8:30 a.m. Eastern Time. The Company notes that it is not in any way providing any comments or updating its prior disclosures regarding these matters in this press release.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations. Included among the factors that, in the Company's view, could cause actual results to differ materially from the forward looking statements contained in this press release are the following: loss or reduction in business from the Company's significant customers; the failure of the Company's significant customers to perform their obligations owed to us; changes in demand; a material decline in rates in the tanker market; changes in production of or demand for oil and petroleum products, generally or in particular regions; greater than anticipated levels of tanker newbuilding orders or lower than anticipated rates of tanker scrapping; changes in rules and regulations applicable to the tanker industry, including, without limitation, legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries; actions taken by regulatory authorities; actions by the courts, the U.S. Coast Guard, the U.S. Department of Justice or other governmental authorities and the results of the legal proceedings to which the Company or any of its vessels may be subject; changes in trading patterns significantly impacting overall tanker tonnage requirements; changes in the typical seasonal variations in tanker charter rates; changes in the cost of other modes of oil transportation; changes in oil transportation technology; increases in costs including without limitation: crew wages, insurance, provisions, repairs and maintenance; changes in general domestic and international political conditions; changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, the Company's anticipated drydocking or maintenance and repair costs); changes in the itineraries of the Company's vessels; adverse changes in foreign currency exchange rates affecting the Company's expenses; the Company's ability to borrow under the credit facilities; the Company's ability to timely and effectively implement and execute its plans to restructure its capital structure; the Company's ability to arrange and consummate financing or sale transactions or to access capital; the extent to which the Company's operating results continue to be affected by weakness in market conditions and charter rates; whether the Company is able to generate sufficient cash flows to meet its liquidity needs, service its indebtedness and finance the ongoing obligations of its business; financial market conditions and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2010 and its subsequent reports on Form 10-Q and Form 8-K.
This press release is not an offer to purchase or sell, or a solicitation of an offer to purchase or sell, any securities of the Company.
EBITDA represents net income plus net interest expense and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Management of the Company uses EBITDA as a performance measure in consolidating monthly internal financial statements and is presented for review at our board meetings. The Company believes that EBITDA is useful to investors as the shipping industry is capital intensive which often brings significant cost of financing. EBITDA is not an item recognized by GAAP, and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by GAAP. The definition of EBITDA used here may not be comparable to that used by other companies.
Management believes that these measures enhance the understanding of the effect of net loss and EBITDA on the Company's liquidity.
SOURCE General Maritime Corporation
|"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding General Maritime Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.|