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 June 2006
TOP TANKERS INC.
(Translation of registrant's name into English)
109-111 Messogion Avenue
Politia Centre
Athens 115 26 GR
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [__]
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]
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Included in this Report on Form 6-K as Exhibit 1 is the operating report of
TOP Tankers Inc. (the "Company") for the quarter ended March 31, 2006. This
Report on Form 6-K is hereby incorporated by reference into the Company's
Registration Statement on Form F-3, filed August 2005 (Registration No.
333-127086).
Exhibit 1
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TOP TANKERS INC.
FIRST QUARTER OF 2006 FINANCIAL RESULTS
For the three months ended March 31, 2006, the Company reported net income of
$30,404,000, or $1.06 per share, compared with net income of $19,121,000, or
$0.69 per share, for the first quarter of 2005. The weighted average numbers of
basic shares used in the computations were 28,099,212 and 27,830,990 for the
first quarters of 2006 and 2005, respectively. The results for the first quarter
of 2006 include net charges of $3,246,000, or $0.12 per share of special items
that affected the Company's net income for the first quarter of 2006 that are
typically excluded by securities analysts in their published estimates of the
Company's financial results, which are described in Appendix A of this release.
For the three months ended March 31, 2006, operating income was $38,213,000,
compared with $20,975,000 for the first quarter of 2005. EBITDA for the first
quarter of 2006 was $55,850,000, compared with $29,719,000 for the first quarter
of 2005. Voyage revenues for the first quarter of 2006 were $101,746,000,
compared to $47,291,000 recorded in the first quarter of 2005. Please see
Appendix A for a reconciliation of EBITDA to net income.
The following key indicators serve to highlight changes in the financial
performance of the Company's fleet during the first quarters ended March 31,
2005 and 2006:
Suezmax Fleet
Three Months Ended March 31,
(In U.S. Dollars unless otherwise stated) 2005 2006 Change
Total available ship days 416 1,170 181.3%
Total operating days 412 1,112 169.9%
Utilization 99.0% 95.0% -4.0%
TCE(1) per ship per day under spot voyage charter 49,432 61,802 25.0%
TCE per ship per day under time charter - 39,108 -
Average TCE 49,432 52,741 6.7%
Vessel operating expenses per ship per day 6,591 7,634 15.8%
-----------------
(1) Consistent with general practice in the tanker shipping industry, time
charter equivalent, or TCE, is a measure of the average daily revenue
performance of a vessel on a per voyage basis. Our method of calculating TCE is
consistent with industry standards and is determined by dividing net voyage
revenue by voyage days for the relevant time period. Net voyage revenues are
voyage 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.
Handymax Fleet
Three Months Ended March 31,
(In U.S. Dollars unless otherwise stated) 2005 2006 Change
Total available ship days 917 1,260 37.4%
Total operating days 910 1,236 35.8%
Utilization 99.2% 98.1% -1.2%
TCE per ship per day under spot voyage charter - - -
TCE per ship per day under time charter 21,564 21,735 0.8%
Average TCE 21,564 21,735 0.8%
Vessel operating expenses per ship per day 4,928 5,397 9.5%
Total Fleet*
Three Months Ended March 31,
(In U.S. Dollars unless otherwise stated) 2005 2006 Change
Total available ship days 1,423 2,430 70.8%
Total operating days 1,401 2,348 67.6%
Utilization 98.5% 96.6% -1.9%
TCE per ship per day under spot voyage charter 43,280 61,802 42.8%
TCE per ship per day under time charter 21,532 26,326 22.3%
Average TCE 29,123 36,419 25.1%
Vessel operating expenses per ship per day 5,682 6,474 13.9%
General and administrative expenses per
ship per day** 2,093 2,997 43.1%
* Total Fleet information includes data for one Handysize tanker in 2005.
** The daily General and Administrative expenses include approximately $0 and
$574 of non-cash restricted stock expense and $316 and $1,029 for general
compensation provision for the first quarter of 2005 and 2006, respectively.
Fleet Report
As of March 31, 2006, the Company's fleet size was 27 vessels, or 2.6 million
dwt (including 13 vessels sold and leased back for a period of 5 to 7 years) as
compared to 18 vessels, or 1.3 million dwt on March 31, 2005. The changes in the
Company's fleet during the first quarter of 2006 are as follows:
On March 9, 2006, the Company sold and leased-back the Handymax tankers M/T
Faithful, M/T Spotless, M/T Vanguard and M/T Doubtless and the Suezmax tankers
M/T Flawless, M/T Timeless, M/T Priceless and M/T Stopless for a period of five
years, generating a gain of $46 million, which is amortized over the five year
lease period.
Fleet Deployment
During the first quarter of 2006, the Company had approximately 72% of the
fleet's operating days on long-term employment contracts. Nineteen of the
Company's 27 tankers are on time charter contracts with an average term of over
three years with all but two of the time charters including profit sharing
agreements.
The Company has secured approximately 70% of the estimated operating days for
2006 under time charter contracts. At the same time, the eight Suezmaxes
operating in the spot market, together with the profit sharing component of the
time charter contracts, expose approximately 60% of the Company's estimated
operating days for 2006 to spot rates, which may be potentially higher.
Suezmax Fleet:
During the first quarter of 2006, eight of the Company's Suezmax tankers
operated in the spot market, earning on average $61,802 per vessel per day on a
time charter equivalent (TCE) basis.
As of the date of this release, the Company's Suezmax fleet for the second
quarter of 2006 has been fixed for employment as follows:
Spot: 53% of operating days at average daily TCE of $33,000
Total (Spot and time charter, including profit sharing): 64% of operating days
at average daily TCE of $33,500.
Handymax Fleet:
All of the Company's Handymax tankers operate under long term employment
agreements with Glencore and Vitol that provide for a base rate of charterhire
and additional profit-sharing.
During the first quarter of 2006, including the profit-sharing allocated to the
Company from these profit-sharing agreements, the Handymax fleet earned on
average $21,735 per vessel per day on a time charter equivalent (TCE) basis.
As of the date of this release, the Company's Handymax fleet for the second
quarter of 2006 has been fixed for 63% of its operating days at average daily
TCE of $20,000.
The following table presents the Company's current fleet list and employment:
Dwt Year Charter Type Expiry Daily Base Profit Sharing
Built Rate Above Base Rate (2005)
13 Suezmax Tankers
Timeless (C)............. 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Flawless (C)............. 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Stopless (C)............. 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Priceless (C)............ 154,970 1991 Spot
Faultless (B)............ 154,970 1992 Spot
Noiseless (B)............ 149,554 1992 Time Charter Q2/2010 $37,000(1) None
Stainless (B)............ 149,599 1992 Spot
Endless (B).............. 135,915 1992 Time Charter Q4/2008(A) $36,500 None
Limitless (B)............ 136,055 1993 Spot
Stormless............. 150,038 1993 Spot
Ellen P............... 146,286 1996 Spot
Errorless............. 147,048 1993 Spot
Edgeless.............. 147,048 1994 Spot
14 Handymax Tankers
Victorious (B)........... 47,084 1991 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50%
Sovereign (B)............ 47,084 1992 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50%
Invincible (B)........... 47,084 1992 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50%
Relentless (B)........... 47,084 1992 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50%
Vanguard (C)............. 47,084 1992 Time Charter Q1/2010 $13,250(3) 100% first $1,250 + 50% thereafter
Restless (B)............. 47,084 1991 Time Charter Q1/2010 $13,250(3) 100% first $1,250 + 50% thereafter
Spotless (C)............. 47,094 1991 Time Charter Q1/2010 $13,250(3) 100% first $1,250 + 50% thereafter
Doubtless (C)............ 47,076 1991 Time Charter Q1/2010 $13,250(3) 100% first $1,250 + 50% thereafter
Faithful (C)............. 45,720 1992 Time Charter Q1/2010 $13,250(3) 100% first $1,250 + 50% thereafter
Topless............... 47,262 1998 Time Charter Q2/2010 $16,250 100% first 1,000 + 50% thereafter
Taintless............. 46,217 1999 Time Charter Q1/2010 $16,250 100% first 1,000 + 50% thereafter
Dauntless............. 46,168 1999 Time Charter Q1/2010 $16,250 100% first 1,000 + 50% thereafter
Soundless............. 46,185 1999 Time Charter Q2/2010 $16,250 100% first 1,000 + 50% thereafter
Ioannis P............. 46,346 2003 Time Charter Q4/2010 $18,000(4) 35% above base rate
Total Tanker DWT 2,590,965
(A) Charterers have option to extend contract for an additional four-year
period
(B) Vessels sold and leased back for a period of 7 years.
(C) Vessels sold and leased back for a period of 5 years.
1. Base rate will change to $36,000 in Q2 2007 and $35,000 in Q2 2008 until
expiration.
2. Base rate will change to $14,000 from Q3 2007 until expiration.
3. Base rate will change to $14,500, plus 50% thereafter, from Q1 2007 until
expiration.
4. From Q3 2006 until expiration, base rate will remain the same with 100%
profit sharing participation in the first $1,000 above base rate and 50%
thereafter.
Credit Facility
As of March 31, 2006, TOP Tankers had total indebtedness under senior secured
credit facilities of $428 million with its lenders, the Royal Bank of Scotland
("RBS"), DVB Bank ("DVB") and HSH Nordbank ("HSH").
Since such date, we have repaid $121 million to RBS and DVB, in connection with
the sale and leaseback of 5 Suezmax tankers effected in April 2006. As of the
date of this release, the Company has total indebtedness of $308 million,
provided by the RBS and HSH. Our remaining outstanding loans with RBS and HSH
mature in 2015 and 2013, respectively.
As of March 31, 2006, the Company has two interest rate swap agreements with RBS
and HSH for the amounts of $36.5 million and $45.0 million for a period of four
and five years, respectively. Under these agreements the interest rate is fixed
at an effective annual rate of 4.66% and 4.80%, respectively, in addition to the
applicable margin. The interest rate for the remaining balance of the loans is
LIBOR, plus the margin. On March 31, 2006, the Company's ratio of indebtedness
to total capital was approximately 62.5%.
Dividend and Dividend Policy
The Company paid a quarterly dividend of $0.21 per share on January 23, 2006 to
shareholders of record as of January 17, 2006.
The Company paid a special dividend of $5.00 per share on March 27, 2006, to
shareholders of record as of March 22, 2006, following the completion of sale
and leaseback of 8 vessels in March 2006.
The Company paid a special dividend of $2.50 per share on April 25, 2006 to
shareholders of record as of April 17, 2006, following the completion of sale
and leaseback of 5 vessels in April 2006.
In addition, on April 6, 2006, the Company announced that its Board of Directors
has decided the change of dividend policy from quarterly and special dividend
payments to special dividend payments. Declaration and payment of such dividends
will be subject to the discretion of the Company's Board of Directors. The
timing and amount of future dividend payments will be dependent upon the
Company's earnings, financial condition, cash requirements and availability.
Forward-Looking Statements
Matters discussed in this report may constitute forward-looking statements.
Forward-looking statements reflect our current views with respect to future
events and financial performance and may 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 forward-looking statements in this report are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical operating
trends, data contained in our records and other data available from third
parties. Although TOP Tankers believes 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, TOP Tankers cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections.
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
changes in charterhire rates and vessel values, failure of a seller to deliver
one or more vessels, failure of a buyer to accept delivery of a vessel,
inability to procure acquisition financing, changes in demand for oil and
petroleum products, the effect of changes in OPEC's petroleum production levels
and worldwide oil consumption and storage, changes in demand that may affect
attitudes of time charterers, scheduled and unscheduled drydocking, changes in
our voyage and operating expenses, including bunker prices, dry- docking and
insurance costs, changes in governmental rules and regulations including
requirements for double-hull tankers or actions taken by regulatory authorities,
potential liability from pending or future litigation, domestic and
international political conditions, potential disruption of shipping routes due
to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by TOP Tankers
with the US Securities and Exchange Commission, which are available in the SEC's
"EDGAR" database on its website, www.sec.gov.
##
TABLES FOLLOW
##
TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF INCOME
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
Three Months Ended March 31,
----------------------------
2005 2006
---- ----
(unaudited) (unaudited)
REVENUES:
Voyage revenues $ 47,291 $ 101,746
EXPENSES:
Voyage expenses 6,490 16,234
Charter hire expense - 7,638
Vessel operating expenses 8,085 15,731
Depreciation and amortization 8,736 17,641
General and administrative expenses 2,979 7,282
Amortization of deferred gain on sale of vessels - (1,055)
Foreign currency losses 26 62
------------ ----------
Operating income 20,975 38,213
------------ ----------
OTHER INCOME (EXPENSES):
Interest and finance costs (2,510) (8,066)
Interest income 648 261
Other, net 8 (4)
------------ ----------
Total other expenses, net (1,854) (7,809)
------------ ----------
Net Income $ 19,121 $ 30,404
============ ==========
Earnings per share, basic and diluted $ 0.69 $ 1.06
============ ==========
Weighted average common shares outstanding, basic
and diluted 27,830,990 28,099,212
============ ==========
TOP TANKERS INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars - except for share and per
share data)
December 31, March 31,
2005 2006
-------------- --------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,462 $ 24,857
Other current assets 50,112 50,541
-------------- -----------
Total current assets 67,574 75,398
FINANCIAL INSTRUMENTS 425 1,009
VESSELS, NET 886,754 643,924
OTHER NON-CURRENT ASSETS 26,144 46,497
-------------- -----------
Total assets $ 980,897 $ 766,828
============== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt 45,329 136,117
Deferred income, current portion 2,451 11,701
Other current liabilities 30,814 25,585
-------------- -----------
Total current liabilities 78,594 173,403
LONG-TERM DEBT, net of current portion 518,774 288,491
DEFERRED INCOME, net of current portion 13,871 50,091
STOCKHOLDERS' EQUITY 369,658 254,843
-------------- -----------
Total liabilities and stockholders' equity $ 980,897 $ 766,828
============== ===========
TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
Three Months Ended March 31,
----------------------------
2005 2006
------------- ----------
(unaudited) (unaudited)
Cash Flows from (used in) Operating Activities:
Net income $ 19,121 $ 30,404
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,917 19,229
Stock-based compensation - 1,396
Change in fair value of financial instruments - (248)
Amortization of deferred income - (1,055)
Change in operating assets and liabilities (7,652) (5,658)
----------- ----------
Net Cash from Operating Activities 20,386 44,068
........... ..........
Cash Flows from (used in) Investing Activities:
Advances for vessels acquisitions (94,060) -
Acquisition of vessels (127,581) -
Net proceeds from sale of vessels - 251,502
Other (85) (165)
----------- ----------
Net Cash from (used in) Investing Activities (221,726) 251,337
........... ..........
Cash Flows from (used in) Financing Activities:
Proceeds from long-term debt 157,531 -
Payments of long-term debt (10,000) (140,996)
Payment of financing costs (2,703) (63)
Dividends paid (5,845) (146,951)
----------- ----------
Net Cash from (used in) Financing Activities 138,983 (288,010)
........... ..........
Net increase (decrease) in cash and cash equivalents (62,357) 7,395
Cash and cash equivalents at beginning of period 114,768 17,462
----------- ----------
Cash and cash equivalents at end of period $ 52,411 $ 24,857
=========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 3,370 $ 6,644
============ ==========
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME AND RECONCILIATION OF EBITDA
Set forth below are some of the significant items of income and expense that
affected the Company's net income for the first quarter of 2006, 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)
Description Q1 2006
(Unaudited)
$ Per Share
Restricted share plan to officers and personnel 1,396 0.05
Bonus compensation provision to officers and personnel 2,500 0.09
Gain from termination of interest rate swap (650) (0.02)
------ ------
Total 3,246 0.12
====== ======
Specific items had no material effect in Company's net income for the first
quarter of 2005.
EBITDA RECONCILIATION(2)
(Expressed in Thousands of U.S Dollars) Three Months Ended March 31,
---------------------------
2005 2006
---- ----
NET INCOME 19,121 30,404
DEPRECIATION AND AMORTIZATION 8,736 17,641
INTEREST AND FINANCE COSTS, NET 1,862 7,805
---------- --------
EBITDA 29,719 55,850
========== ========
------------------
(2) EBITDA represents earnings before interest, taxes, depreciation and
amortization. EBITDA does not represent and should not be considered as an
alternative to net income, as determined by GAAP, and our calculation of EBITDA
may not be comparable to that reported by other companies.
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 TANKERS INC.
(Registrant)
Dated: June 1, 2006 By: /s/ Stamatis N. Tsantanis
-------------------------
Stamatis N. Tsantanis
Chief Financial Officer
SK 23116 0001 674838