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 April 2008
Commission
File Number
TOP
SHIPS INC.
(Translation
of registrant’s name into English)
1 VAS.
SOFIAS & MEG.
ALEXANDROU
STREET
151 24,
MAROUSSI
ATHENS,
GREECE
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form 20-F
[ X ] Form 40-F [ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)7: ___
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 ]
If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): ________.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
to this report on Form 6-K as Exhibit 1 is the press release issued by Top Ships
Inc. (the “Company”) on March 13, 2008, announcing the Company’s financial
results for the fourth quarter and the fiscal year ended December 31,
2007. The information contained in this filing is hereby incorporated
by reference in the Company’s registration statement filed on Form F-3 on August
1, 2005 (File No. 333-127086).
EXHIBIT
1
NEWS RELEASE for March 13,
2008
Contact: Michael
Mason
(investors) Stamatis
Tsantanis, CFO
Allen
& Caron
Inc TOP
Ships Inc
212 691
8087 011
30 210 812 8199
michaelm@allencaron.com snt@topships.org
TOP
SHIPS REPORTS FOURTH QUARTER AND FISCAL YEAR 2007 FINANCIAL RESULTS
ATHENS,
GREECE (March 13, 2008) … TOP Ships Inc. (NasdaqGS:TOPS) today announced its
operating results for the fourth quarter and the fiscal year ended December 31,
2007.
For the
three months ended December 31, 2007, the Company reported net loss of
$37,439,000, or $0.89 per share, compared with net loss of $348,000, or $0.01
per share, for the fourth quarter of 2006. The weighted average numbers of basic
shares used in the computations were 42,248,226 and 32,288,205 for the fourth
quarter of 2007 and 2006, respectively. The results for the fourth quarter of
2007 and 2006 include net charges of $15,742,000, or $0.38 per share and
$3,841,000, or $0.12 per share, respectively, of special items(1) that affected
the Company’s net loss for the fourth quarter of 2007 and 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 December 31, 2007, operating loss was $25,982,000,
compared with operating income of $3,956,000 for the fourth quarter of 2006.
Revenues for the fourth quarter of 2007 were $51,789,000, compared to
$67,794,000 recorded in the fourth quarter of 2006.
For the
year ended December 31, 2007, the Company reported net loss of $49,076,000, or
$1.36 per share, compared with net loss of $11,005,000, or $0.39 per share, for
the year ended December 31, 2006. The weighted average numbers of basic shares
used in the computations were 35,960,571 and 30,550,274 for the years ended
December 31, 2007 and 2006, respectively. The results for 2007 and 2006 include
net charges of $16,107,000, or $0.45 per share and $34,373,000, or $1.13 per
share, respectively, of special items that affected the Company’s net income for
2007 and 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 year ended December 31, 2007, operating loss
was $29,118,000, compared with operating income of $15,215,000 for the year
ended December 31, 2006. Revenues for the year ended December 31, 2007 were
$252,259,000, compared to $310,043,000 recorded in the year ended December 31,
2006.
Evangelos
J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc.,
commented:
2007 was
a challenging year for the industry, one where we witnessed Suezmax charter
rates plummet to their lowest level in five years. The strong first quarter
performance, together with the significant increase
in the
last part of the fourth quarter, were not enough to raise our annual suezmax
spot average to more than $32,249 per vessel per day. Going forward in 2008, we
remain confident of a healthy crude tanker rate environment, and a strong
drybulk market performance, which if they do perform to our
expectations, will enable us to significantly improve our operating cash-flow
and restore us to profitability.
During
the year, we invested the amount of $208 million to reduce our financial
expenditure by re-acquiring four previously sold and leased back suezmaxes, a
deal which is accretive by approximately $0.20 per share on a full year basis.
Moreover, we unwound three additional leasing contracts, which in combination
with the re-acquisition, have reduced our annual leasing obligations by
approximately $47 million.
In July
and August we entered into agreements totalling $370 million to
acquire six drybulk vessels, three of which have time charters attached and
three that are operating in the spot market. Despite the credit crunch, we were
able to secure $292 million of senior and junior credit facilities for the
deliveries of the vessels.
We
started taking delivery during the fourth quarter and at the year-end we had
taken delivery of three vessels, resulting in a small revenue contribution of
approximately $3 million. To date we have taken delivery of five vessels and we
expect to take delivery of the final drybulk by the end of April 2008. The
values of all the drybulks have appreciated considerably and, as mentioned
above, we expect significant operating cash-flow from these vessels in
2008.
In
December 2007, we completed a $69 million equity offering of 24.2 million new
shares. The offering took place during a very difficult period for the equity
capital markets, but we managed to complete it with what we believe is the best
possible outcome for the Company considering the circumstances. This equity
offering permitted us to fund a portion of the acquisition cost related to our
important six dry bulk vessel acquisition.
In
January 2008, we agreed to a settlement with lead plaintiffs in the securities
class action lawsuit pending against us since last year for a payment of
approximately $1 million dollars to the plaintiffs, which will be funded
entirely by our insurance. We believe that we have settled this dispute for a
modest amount, and have eliminated the distraction to management which
protracted litigation would have caused. We have always believed that the class
action was meritless, and were pleased that many of the allegations were
voluntarily dropped by the plaintiffs some months ago.
Today,
our shareholders approved a 3:1 reverse stock split. We expect the effective
date of the reverse split to be on March 20, 2008. We believe that the decrease
in the number of our common shares outstanding as a consequence of the reverse
split and the anticipated increase in the price per share will encourage greater
interest in our shares by the financial community and the investor and possibly
promote greater liquidity for our shareholders with respect of their
holdings.
Finally
we are entering into the ‘steel cutting’ phase of our Newbuildings, fully within
the initial agreed schedule. We expect to start taking delivery of all six
vessels within the first half of 2009, as per the original plan.
The
following key indicators serve to highlight changes in the financial performance
of the Company’s vessels during the fourth quarters of 2006 and 2007 and the
years ended December 31, 2006 and 2007:
|
Suezmax Vessels
|
||||||||||||||||||||||||
|
Three Months Ended December
31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2006
|
2007
|
Change
|
2006
|
2007
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
1,196 | 1,104 | -7.7 | % | 4,745 | 4,500 | -5.2 | % | ||||||||||||||||
|
Total
operating days
|
979 | 845 | -13.7 | % | 3,837 | 3,801 | -0.9 | % | ||||||||||||||||
|
Utilization
|
81.9 | % | 76.5 | % | -6.5 | % | 80.9 | % | 84.5 | % | 4.5 | % | ||||||||||||
|
TCE2 per ship per day under spot voyage
charter
|
37,652 | 23,068 | -38.7 | % | 45,328 | 32,249 | -28.9 | % | ||||||||||||||||
|
TCE
per ship per day under time charter
|
34,058 | 35,205 | 3.4 | % | 36,069 | 35,355 | -2.0 | % | ||||||||||||||||
|
Average
TCE
|
36,503 | 28,469 | -22.0 | % | 41,887 | 33,466 | -20.1 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
8,277 | 11,618 | 40.4 | % | 7,748 | 9,388 | * | 21.2 | % | |||||||||||||||
|
Handymax Vessels
|
||||||||||||||||||||||||
|
Three Months Ended December
31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2006
|
2007
|
Change
|
2006
|
2007
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
1,180 | 736 | -37.6 | % | 5,002 | 3,610 | -27.8 | % | ||||||||||||||||
|
Total
operating days
|
1,117 | 584 | -47.7 | % | 4,797 | 3,190 | -33.5 | % | ||||||||||||||||
|
Utilization
|
94.7 | % | 79.3 | % | -16.2 | % | 95.9 | % | 88.4 | % | -7.9 | % | ||||||||||||
|
TCE
per ship per day under spot voyage charter
|
- | - | - | - | - | - | ||||||||||||||||||
|
TCE
per ship per day under time charter
|
17,082 | 16,526 | -3.3 | % | 19,590 | 19,589 | 0.0 | % | ||||||||||||||||
|
Average
TCE
|
17,082 | 16,526 | -3.3 | % | 19,590 | 19,589 | 0.0 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
5,931 | 7,650 | 29.0 | % | 5,862 | 6,920 | 18.1 | % | ||||||||||||||||
|
Tanker Fleet
|
||||||||||||||||||||||||
|
Three Months Ended December
31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2006
|
2007
|
Change
|
2006
|
2007
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
2,376 | 1,840 | -22.6 | % | 9,747 | 8,110 | -16.8 | % | ||||||||||||||||
|
Total
operating days
|
2,096 | 1,429 | -31.8 | % | 8,634 | 6,991 | -19.0 | % | ||||||||||||||||
|
Utilization
|
88.2 | % | 77.7 | % | -12.0 | % | 88.6 | % | 86.2 | % | -2.7 | % | ||||||||||||
|
TCE
per ship per day under spot voyage charter
|
37,652 | 23,068 | -38.7 | % | 45,328 | 32,249 | -28.9 | % | ||||||||||||||||
|
TCE
per ship per day under time charter
|
20,798 | 23,842 | 14.6 | % | 23,366 | 24,606 | 5.3 | % | ||||||||||||||||
|
Average
TCE
|
26,153 | 23,588 | -9.8 | % | 29,499 | 27,134 | -8.0 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
7,112 | 10,030 | 41.0 | % | 6,780 | 8,292 | 22.3 | % | ||||||||||||||||
|
Drybulk Fleet
|
||||||||||||||||||||||||
|
Three Months Ended December
31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2006
|
2007
|
Change
|
2006
|
2007
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
- | 66 | - | - | 66 | - | ||||||||||||||||||
|
Total
operating days
|
- | 41 | - | - | 41 | - | ||||||||||||||||||
|
Utilization
|
- | 62.1 | % | - | - | 62.1 | % | - | ||||||||||||||||
|
TCE
per ship per day under spot voyage charter
|
- | - | - | - | - | - | ||||||||||||||||||
|
TCE
per ship per day under time charter
|
- | 76,902 | - | - | 76,902 | - | ||||||||||||||||||
|
Average
TCE
|
- | 76,902 | - | - | 76,902 | - | ||||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
- | 10,092 | - | - | 10,425 | - | ||||||||||||||||||
|
Total Fleet
|
||||||||||||||||||||||||
|
Three Months Ended December
31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
(In
U.S. Dollars unless otherwise stated)
|
2006
|
2007
|
Change
|
2006
|
2007
|
Change
|
||||||||||||||||||
|
Total
available ship days
|
2,376 | 1,906 | -19.8 | % | 9,747 | 8,176 | -16.1 | % | ||||||||||||||||
|
Total
operating days
|
2,096 | 1,470 | -29.9 | % | 8,634 | 7,032 | -18.6 | % | ||||||||||||||||
|
Utilization
|
88.2 | % | 77.1 | % | -12.6 | % | 88.6 | % | 86.0 | % | -2.9 | % | ||||||||||||
|
TCE
per ship per day under spot voyage charter
|
37,652 | 23,068 | -38.7 | % | 45,328 | 32,249 | -28.9 | % | ||||||||||||||||
|
TCE
per ship per day under time charter
|
20,798 | 26,015 | 25.1 | % | 23,366 | 25,060 | 7.3 | % | ||||||||||||||||
|
Average
TCE
|
26,153 | 25,075 | -4.1 | % | 29,499 | 27,424 | -7.0 | % | ||||||||||||||||
|
Other
vessel operating expenses per ship per day
|
7,112 | 10,033 | 41.1 | % | 6,780 | 8,307 | * | 22.5 | % | |||||||||||||||
|
General
and administrative expenses per ship per day**
|
2,057 | 4,407 | 114.2 | % | 2,361 | 3,036 | 28.6 | % | ||||||||||||||||
* The daily Other vessel
operating expenses for the Suezmax Vessels and Total Fleet include approximately
$510 and $281, respectively for the ballast tank cleaning process and salvage
operations on the M/T Faultless.
** The
daily General and Administrative expenses include approximately ($138) and
$1,153 for the three-month period and $597 and $423 for the year ended December
31, 2006 and 2007, respectively, of non-cash restricted stock expense, general
compensation, specific legal fees and depreciation for other fixed
assets.
2 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
revenues are 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.
Fleet
Report:
As of
December 31, 2007, the Company’s fleet consisted of 23 vessels, or 2.2 million
dwt (including 11 vessels sold and leased back for a period of five to seven
years) as compared to 24 vessels, or 2.5 million dwt on December 31,
2006.
In April
2007, the Company sold the Suezmax tanker M/T Errorless for $52.5 million,
resulting in a gain of approximately $2.0 million, which was recognized in the
second quarter of 2007. The vessel was delivered to its new owners on April 30,
2007.
In April
and July 2007, the Handymax tankers M/T Invincible, M/T Victorious and M/T
Restless, which the Company was leasing under the 2005 sales and leaseback
transaction, were sold by their owners to third parties. Following these sales,
the Company terminated the bareboat agreements for these vessels. The
termination of the bareboat charters became effective upon the vessels’ delivery
to their new owners, on July 11, 2007, August 27, 2007 and September 17, 2007,
respectively. The unamortized deferred gain as of that date of $8.0 million was
recorded in full in the fourth quarter of 2007.
In May
2007, the Company re-acquired four Suezmax tankers previously sold under the
sale and lease-back transaction and terminated their respective operating
leases. The four Suezmax tankers are Limitless (136,055 dwt built 1993), Endless
(135,915 dwt built 1992), Noiseless (149,554 dwt built 1992) and Stainless
(149,599 dwt built 1992). The re-acquisition price was $208.0 million and was
financed by secured bank debt of $147.5 million, the early redemption of the
seller’s credit of $20.6 million and by existing cash balances. The purpose of
the repurchase was to improve the daily breakeven rates of our Suezmax fleet and
to increase the Company’s owned fleet.
In July
2007, the Company entered into agreements to acquire three drybulk vessels from
unrelated third parties as follows: (i) a 2002 built super Handymax, or
Supramax, vessel of 51,200 dwt, built in China, which will be chartered back to
the sellers for a period of 18 months at a daily net rate of $25,650 on a
bareboat basis; (ii) a 1995 built panamax vessel of 73,506 dwt, built in South
Korea, which will be time-chartered for a period of 24-26 months at a daily net
rate of $29,700; and (iii) a 2000 built Handymax vessel of 45,526 dwt, built in
Philippines, which will be time-chartered for a period of 14-16 months at a
daily net rate of $22,000. The first vessel, the M/V Voc Gallant was delivered
in February 2008, while the other two, the M/V Bertram and the M/V Amalfi were
delivered to the Company in the fourth quarter of 2007. The aggregate purchase
price of the vessels was $148.1 million and was financed through new loan
facilities, working capital, and the proceeds from the offering effected in
December 2007.
In August
2007, we entered into agreements to acquire another three drybulk vessels from
unrelated third parties as follows: i) one 2001 built panamax vessel of 75,928
dwt, built in Japan, ii) one 2000 built panamax vessel of 75,933 dwt, built in
Japan and iii) one 2000 built panamax vessel of 75,681 dwt, built in Japan. The
first and the third vessel, the M/V Pepito and M/V Cyclades were delivered in
March 2008 and December 2007, respectively, whereas the remaining vessel is
expected to be delivered to the Company in March or April 2008. The aggregate
purchase price of the vessels is $222.0 million which will be financed through
new loan facilities, working capital, and the proceeds from the offering
effected in December 2007.
In
December 2007, the Company entered into an agreement to sell the tanker vessel
M/T Noiseless to an unrelated third party for a consideration of $48.0 million,
resulting in a gain of approximately $0.5 million, which was recognized upon the
delivery of the vessel to the buyer, on January 30, 2008.
In
January 2008, the Company entered into an agreement to sell the tanker vessel
M/T Stainless to an unrelated third party for a consideration of $46.0 million.
On January 31, 2008 the vessel entered into a bareboat charter with the buyer
until July 31, 2008 (the vessel’s delivery date) at a daily bareboat hire
of
$20,000.
All bareboat hire payments made up to the vessel’s delivery date will be
deducted from the purchase price. According to the terms of the bareboat charter
the Company collected in advance an amount of $2.5 million from the buyers as a
security of their obligation to purchase the vessel.
Fleet
Deployment:
During
2007, the Company had approximately 67% of the fleet’s operating days on
long-term employment contracts. As of December 31, 2007, fifteen of the
Company’s 23 vessels were on time charter contracts with an average term of over
three years with all but six of the time charters including profit sharing
agreements.
Suezmax
Vessels:
During
the fourth quarter of 2007, seven of the Company’s Suezmax tankers operated in
the spot market, earning on average $23,068 per vessel per day on a time charter
equivalent (TCE) basis.
During
the fourth quarter of 2007, five of the Company’s Suezmax tankers operated under
time charter contracts, earning on average $35,205 per vessel per day on a time
charter equivalent (TCE) basis.
Handymax
Vessels:
All of
the Company’s Handymax tankers operate under long term employment agreements
that provide for a base rate and additional profit-sharing.
During
the fourth quarter of 2007, including the profit-sharing allocated to the
Company the Handymax fleet earned on average $16,526 per vessel per day on a
time charter equivalent (TCE) basis.
Drybulk
Vessels:
During
the fourth quarter of 2007, all Company’s drybulk vessels operated under time
charter contracts, earning on average $76,902 per vessel per day on a time
charter equivalent (TCE) basis.
The
following table presents the Company’s current fleet list and
employment:
|
Dwt
|
Year
Built
|
Charter Type
|
Expiry
|
Daily Base Rate
|
Profit Sharing
Above Base Rate (2008)
|
||||||||||
|
10
Suezmax Tankers
|
|||||||||||||||
|
TimelessC
|
154,970 |
1991
|
Spot
|
||||||||||||
|
FlawlessC
|
154,970 |
1991
|
Spot
|
||||||||||||
|
StoplessC
|
154,970 |
1991
|
Time
Charter
|
Q3/2008 | $ | 35,000 |
50%
thereafter
|
||||||||
|
PricelessC
|
154,970 |
1991
|
Spot
|
||||||||||||
|
FaultlessD
|
154,970 |
1992
|
Spot
|
||||||||||||
|
EndlessF
|
135,915 |
1992
|
Spot
|
||||||||||||
|
LimitlessF
|
136,055 |
1993
|
Time
Charter
|
Q4/2008 | E | $ | 36,500 |
None
|
|||||||
|
StormlessF
|
150,038 |
1993
|
Time
Charter
|
Q2/2010 | $ | 36,000 |
None
|
||||||||
|
Ellen
PF
|
146,286 |
1996
|
Time
Charter
|
Q3/2008 | A | $ | 44,500 |
None
|
|||||||
|
EdgelessF
|
147,048 |
1994
|
Spot
|
||||||||||||
|
8
Handymax Tankers
|
|||||||||||||||
|
SovereignB
|
47,084 |
1992
|
Time
Charter
|
Q3/2009 | $ | 14,000 |
50%
thereafter
|
||||||||
|
RelentlessB
|
47,084 |
1992
|
Time
Charter
|
Q3/2009 | $ | 14,000 |
50%
thereafter
|
||||||||
|
VanguardC
|
47,084 |
1992
|
Time
Charter
|
Q1/2010 | $ | 15,250 |
50%
thereafter
|
||||||||
|
SpotlessC
|
47,094 |
1991
|
Time
Charter
|
Q1/2010 | $ | 15,250 |
50%
thereafter
|
||||||||
|
DoubtlessC
|
47,076 |
1991
|
Time
Charter
|
Q1/2010 | $ | 15,250 |
50%
thereafter
|
||||||||
|
FaithfulC
|
45,720 |
1992
|
Time
Charter
|
Q2/2010 | $ | 14,500 |
100%
first $500 + 50% thereafter
|
||||||||
|
DauntlessF
|
46,168 |
1999
|
Time
Charter
|
Q1/2010 | $ | 16,250 |
100%
first $1,000 + 50% thereafter
|
||||||||
|
Ioannis
PF
|
46,346 |
2003
|
Time
Charter
|
Q4/2010 | $ | 18,000 |
100%
first $1,000 + 50% thereafter
|
||||||||
|
Total
Tanker dwt
|
1,863,848 | ||||||||||||||
|
6
Drybulk Vessels
|
|||||||||||||||
|
BertramF
|
73,506 |
1995
|
Time
Charter
|
Q4/2009 | $ | 29,700 |
None
|
||||||||
|
CycladesF
|
75,681 |
2000
|
Time
Charter
|
Q2/2008 | $ | 42,200 |
None
|
||||||||
|
AmalfiF
|
45,526 |
2000
|
Time
Charter
|
Q1/2009 | $ | 22,000 |
None
|
||||||||
|
Voc
GallantF
|
51,200 |
2002
|
Bareboat
Charter
|
Q2/2009 | $ | 25,650 |
None
|
||||||||
|
PepitoF
|
75,928 |
2001
|
Time
Charter
|
Q2/2008 | $ | 55,000 |
None
|
||||||||
|
Astrale
|
75,933 |
2000
|
To
be delivered in April 2008
|
||||||||||||
|
Total
Drybulk dwt
|
397,774 | ||||||||||||||
|
TOTAL
DWT
|
2,261,622 | ||||||||||||||
|
A.
Charterers have option to extend contract for an additional one-year
period
|
|
B.
Vessels sold and leased back in August and September 2005 for a period of
7 years
|
|
C.
Vessels sold and leased back in March 2006 for a period of 5
years
|
|
D.
Vessel sold and leased back in April 2006 for a period of 7
years
|
|
E.
Charterers have option to extend contract for an additional four-year
period
|
|
F.
Owned vessels
|
Liquidity
and Capital Resources
As of
December 31, 2007, Top Ships had total indebtedness under senior secured credit
facilities of $444.3 million with its lenders, the Royal Bank of Scotland
(“RBS”), HSH Nordbank (“HSH”), DVB Bank and ALPHA
BANK maturing from 2008 through 2015.
As of
December 31, 2007, the Company has three interest rate swap agreements with RBS
for the amounts of $28.5 million, $10.0 million and $10.0 million for a period
of four, seven and seven years, respectively. Under these agreements the
interest rate is fixed at an effective annual rate of 4.66% (in addition to the
applicable margin), 4.23% and 4.11%, respectively. The Company also has one
interest rate swap agreement with HSH for the amount of $37.3 million for a
period of five years, at a fixed interest rate of 4.80% in addition to the
applicable margin. In addition, the Company has two interest rate swap
agreements with Deutsche Bank and Egnatia Bank for the amounts of $50.0 million
and $10.0 million for a period of six and seven years, respectively. Under these
agreements the interest rate is fixed at an effective annual rate of 4.45% and
4.76%, respectively. The above swaps of $10.0 million, $10.0 million, $50.0
million and $10.0 million, include steepening terms based on the two and 10 year
swap difference, which is calculated quarterly in arrears. The interest rate for
the remaining balance of the loans is LIBOR, plus the margin.
On
December 31, 2007, the Company’s ratio of indebtedness to total capital was
approximately 67.5%.
In the
second and fourth quarter of 2007, the Company issued 4.3 million shares of its
common stock. The net proceeds to the Company totaled $29.4 million. These
shares were sold by the Company’s sales agent, Deutsche Bank Securities Inc.,
through a combination of at-the-market sales and negotiated
transactions.
On
December 5, 2007, the Company concluded a follow-on offering of 24.2 million
shares of its common stock for $3.00 per share. The net proceeds to the Company
from this offering totaled $69.0 million and was used for general corporate
purposes including the partial funding of the Company’s six dry bulk vessel
acquisition.
Change
in Accounting Principle
The
Company has historically accounted for dry-docking costs that qualified as
“Planned Major Maintenance Activities” (“PMMA”) using the deferral method.
Beginning with the fourth quarter of 2007 the Company changed its accounting
policy for PMMA from the deferral method, under which the Company amortized
drydocking costs over the estimated period of benefit between dry-dockings, to
the direct expense method, under which the Company expenses all dry-docking
costs as incurred. The Company believes that the direct expense method is
preferable as it eliminates the significant amount of time and subjectivity
involved in determining which costs and activities related to dry-docking
qualify as PMMA under the deferral method. When the accounting principle was
retrospectively applied, net income for the fourth quarter and the year ended
December 31, 2006 decreased by $3.6 million and $26.1 million, or $0.11 and
$0.86 per share, per share, respectively.
The
Company reflected this change as a change in accounting principle from an
accepted accounting principle to a preferable accounting principle in accordance
with Statement of Financial Accounting Standards No. 154, Accounting Changes and Error
Corrections. The new accounting principle was applied retrospectively to
all periods presented in earnings releases and filings.
Conference
Call and Webcast
Top
Ships’ management team will host a conference call to review the results and
discuss other corporate news and its outlook on Thursday, March 13, 2008, at
11:00 AM EST.
Those
interested in listening to the live webcast may do so by going to the Company’s
website at http://www.topships.org, or by going to
http://www.investorcalendar.com.
The
telephonic replay of the conference call will be available by dialling 1-877
660-6853 (from the US and Canada) or +1 201 612 7415 (from outside the US and
Canada) and by entering account number 286 and conference ID number 277433. An
online archive will also be available immediately following the call at the
sites noted above. Both are available for one week, through March 20,
2008.
About
TOP Ships Inc.
TOP Ships
Inc., formerly known as TOP Tankers Inc., is an international provider of
worldwide seaborne crude oil and petroleum products and of drybulk
transportation services. The Company operates a combined tanker and drybulk
fleet as follows:
|
|
--
|
a
fleet of 18 tankers, consisting of 10 double-hull Suezmax tankers and 8
double-hull Handymax tankers, with a total carrying capacity of
approximately 1.8 million dwt, of which 85% are sister ships. Twelve of
the Company’s 18 tankers are on time charter contracts with an average
initial term of over two years with all but three of the time charters
including profit sharing agreements above their base rates. In addition,
the Company has ordered six newbuilding product tankers, which are
expected to be delivered in the first half of
2009.
|
|
|
--
|
a
fleet of five drybulk vessels with delivery of one additional drybulk
vessel expected during March/April 2008. Including this vessel, three of
the Company’s six drybulk vessels will have period charter contracts for
an average period of 18 months.
|
Forward-Looking
Statements
Matters
discussed in this press release may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements in order to encourage companies to
provide prospective information about their business. Forward- looking
statements 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
Company desires to take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The words “believe,”
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,”
“will,” “may,” “should,” “expect” “pending” and similar expressions identify
forward-looking statements. The forward-looking statements in this press release
are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, our management’s examination
of historical operating trends, data contained in our records and other data
available from third parties. Although we believe 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, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In
addition to these important factors, other 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 fluctuations in charter rates
and vessel values, failure of a seller to deliver one or more vessels or of a
buyer to accept delivery of one or more vessels, inability to procure
acquisition financing, default by one or more charterers of our ships, changes
in the demand for crude oil and petroleum products, changes in demand for dry
bulk shipping capacity, changes in our operating expenses, including bunker
prices, drydocking and insurance costs, the market for our vessels, availability
of financing and refinancing, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hires and other factors. Please see our
filings with the Securities and Exchange Commission for a more complete
discussion of these and other risks and uncertainties.
TABLES
FOLLOW
TOP
TANKERS INC.
CONSOLIDATED
CONDENSED STATEMENTS OF INCOME
FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2007
(UNAUDITED)
(Expressed
in thousands of U.S. Dollars - except share and per share data)
|
Three
Months Ended
|
Year
Ended
|
|||||||||||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||||||||||
|
2006
|
2006
|
2007
|
2006
|
2006
|
2007
|
|||||||||||||||||||
|
As
originally reported under the deferral method
|
As
computed under the direct expense method
|
As
originally reported under the deferral method
|
As
computed under the direct expense method
|
|||||||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
|
REVENUES:
|
||||||||||||||||||||||||
|
Revenues
|
$ | 67,794 | $ | 67,794 | $ | 51,789 | $ | 310,043 | $ | 310,043 | $ | 252,259 | ||||||||||||
|
EXPENSES:
|
||||||||||||||||||||||||
|
Voyage
expenses
|
12,977 | 12,977 | 14,929 | 55,351 | 55,351 | 59,414 | ||||||||||||||||||
|
Charter
hire expense
|
29,848 | 29,848 | 18,035 | 96,302 | 96,302 | 94,118 | ||||||||||||||||||
|
Amortization
of deferred gain on sale and leaseback of vessels
|
(2,433 | ) | (2,433 | ) | (1,360 | ) | (8,110 | ) | (8,110 | ) | (15,610 | ) | ||||||||||||
|
Other
vessel operating expenses
|
16,898 | 16,898 | 19,122 | 66,082 | 66,082 | 67,914 | ||||||||||||||||||
|
Dry-docking
costs
|
- | 8,145 | 9,829 | - | 39,333 | 25,094 | ||||||||||||||||||
|
Depreciation
|
6,217 | 6,217 | 8,614 | 35,266 | 35,266 | 27,408 | ||||||||||||||||||
|
Amortization
of dry-docking costs
|
4,585 | - | - | 13,187 | - | - | ||||||||||||||||||
|
General
and administrative expenses
|
4,888 | 4,888 | 8,399 | 23,016 | 23,016 | 24,824 | ||||||||||||||||||
|
Foreign
currency losses, net
|
(35 | ) | (35 | ) | 203 | 255 | 255 | 176 | ||||||||||||||||
|
Gain
on sale of vessel
|
(12,667 | ) | (12,667 | ) | - | (12,667 | ) | (12,667 | ) | (1,961 | ) | |||||||||||||
|
Operating
income (loss)
|
7,516 | 3,956 | (25,982 | ) | 41,361 | 15,215 | (29,118 | ) | ||||||||||||||||
|
OTHER
INCOME (EXPENSES):
|
||||||||||||||||||||||||
|
Interest
and finance costs
|
(5,086 | ) | (5,086 | ) | (12,388 | ) | (29,175 | ) | (29,175 | ) | (23,222 | ) | ||||||||||||
|
Interest
income
|
903 | 903 | 901 | 3,022 | 3,022 | 3,248 | ||||||||||||||||||
|
Other,
net
|
(121 | ) | (121 | ) | 30 | (67 | ) | (67 | ) | 16 | ||||||||||||||
|
Total
other expenses, net
|
(4,304 | ) | (4,304 | ) | (11,457 | ) | (26,220 | ) | (26,220 | ) | (19,958 | ) | ||||||||||||
|
Net
Income (loss)
|
$ | 3,212 | $ | (348 | ) | $ | (37,439 | ) | $ | 15,141 | $ | (11,005 | ) | $ | (49,076 | ) | ||||||||
|
Earnings
(loss) per share, basic and diluted
|
$ | 0.10 | $ | (0.01 | ) | $ | (0.89 | ) | $ | 0.47 | $ | (0.39 | ) | $ | (1.36 | ) | ||||||||
|
Weighted
average common shares outstanding, basic
|
32,288,205 | 32,288,205 | 42,248,226 | 30,550,274 | 30,550,274 | 35,960,571 | ||||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
32,350,732 | 32,288,205 | 42,248,226 | 30,603,868 | 30,550,274 | 35,960,571 | ||||||||||||||||||
|
AFTER
GIVING EFFECT TO STOCK REVERSE SPLIT
|
||||||||||||||||||||||||
|
Earnings
(loss) per share, basic and diluted
|
$ | 0.30 | $ | (0.03 | ) | $ | (2.67 | ) | $ | 1.41 | $ | (1.17 | ) | $ | (4.08 | ) | ||||||||
|
Weighted
average common shares outstanding, basic
|
10,762,735 | 10,762,735 | 14,082,742 | 10,183,424 | 10,183,424 | 11,986,857 | ||||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
10,783,577 | 10,762,735 | 14,082,742 | 10,201,289 | 10,183,424 | 11,986,857 | ||||||||||||||||||
TOP
TANKERS INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Expressed
in thousands of U.S. Dollars - except share and per share data)
|
December
31,
|
December
31,
|
|||||||||||
|
2006
|
2007
|
|||||||||||
|
As
originally reported under the deferral method
|
As
computed under the
direct expense method |
|||||||||||
|
ASSETS
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||
|
CASH
AND CASH EQUIVALENTS
|
$ | 29,992 | $ | 29,992 | $ | 26,012 | ||||||
|
OTHER
CURRENT ASSETS
|
42,807 | 42,807 | 29,881 | |||||||||
|
VESSEL
HELD FOR SALE
|
- | - | 46,268 | |||||||||
|
ADVANCES
FOR VESSELS ACQUISITIONS UNDER CONSTRUCTION
|
28,683 | 28,683 | 66,026 | |||||||||
|
VESSEL
NET
|
306,418 | 306,418 | 552,993 | |||||||||
|
OTHER
NON-CURRENT ASSETS
|
64,835 | 32,985 | 28,339 | |||||||||
|
RESTRICTED
CASH
|
50,000 | 50,000 | 50,000 | |||||||||
|
Total
assets
|
$ | 522,735 | $ | 490,885 | $ | 776,019 | ||||||
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
||||||||||||
|
CURRENT
PORTION OF LONG-TERM DEBT
|
$ | 16,588 | $ | 16,588 | $ | 107,488 | ||||||
|
OTHER
CURRENT LIABILITIES
|
24,021 | 28,828 | 39,697 | |||||||||
|
FINANCIAL
INSTRUMENTS
|
3,384 | 3,384 | 16,788 | |||||||||
|
FAIR
VALUE OF BELOW MARKET TIME CHARTER
|
- | - | 28,301 | |||||||||
|
LONG-TERM
DEBT, NET OF CURRENT PORTION
|
201,464 | 201,464 | 331,396 | |||||||||
|
DEFERRED
GAIN ON SALE AND LEASEBACK OF VESSELS
|
79,423 | 79,423 | 40,941 | |||||||||
|
Total
liabilities
|
324,880 | 329,687 | 564,611 | |||||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||||||
|
STOCKHOLDERS’
EQUITY
|
197,855 | 161,198 | 211,408 | |||||||||
|
Total
liabilities and stockholders’ equity
|
$ | 522,735 | $ | 490,885 | $ | 776,019 | ||||||
TOP
TANKERS INC.
CONSOLIDATED
CONDENSED STATEMENT OF CASH FLOWS
(Expressed
in thousands of U.S. Dollars)
|
Year
Ended
|
||||||||||||
|
December
31,
|
||||||||||||
|
2006
|
2006
|
2007
|
||||||||||
|
As
originally reported under the deferral method
|
As
computed under the
direct
expense method
|
|||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
|
Cash
Flows from (used in) Operating Activities:
|
||||||||||||
|
Net
income (loss)
|
$ | 15,141 | $ | (11,005 | ) | $ | (49,076 | ) | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
|
Depreciation
and amortization
|
53,315 | 40,128 | 30,124 | |||||||||
|
Stock-based
compensation expense
|
3,710 | 3,710 | 935 | |||||||||
|
Change
in fair value of financial instruments
|
3,711 | 3,711 | 4,904 | |||||||||
|
Amortization
of deferred gain on sale and leaseback of vessels
|
(8,110 | ) | (8,110 | ) | (15,610 | ) | ||||||
|
Amortization
of fair value below market time charter
|
- | - | (1,413 | ) | ||||||||
|
(Gain)
/ loss on sale of other fixed assets
|
(10 | ) | (10 | ) | 69 | |||||||
|
Gain
on sale of vessels
|
(12,667 | ) | (12,667 | ) | (1,961 | ) | ||||||
|
Payments
for dry-docking
|
(34,526 | ) | - | - | ||||||||
|
Change
in operating assets and liabilities
|
506 | 5,313 | 20,291 | |||||||||
|
Net
Cash from (used in) Investing Activities:
|
21,070 | 21,070 | (11,737 | ) | ||||||||
|
Cash
Flows from (used in) Operating Activities:
|
||||||||||||
|
Advances
for vessels acquisitions / under construction
|
(28,683 | ) | (28,683 | ) | (37,343 | ) | ||||||
|
Vessel
acquisition and improvements
|
- | - | (355,043 | ) | ||||||||
|
Insurance
claims recoveries
|
- | - | 2,299 | |||||||||
|
Increase
in restricted cash
|
(36,500 | ) | (36,500 | ) | - | |||||||
|
Decrease
in restricted cash
|
- | - | 23,500 | |||||||||
|
Net
proceeds from sale of vessels
|
599,176 | 599,176 | 51,975 | |||||||||
|
Net
proceeds from sale of other fixed assets
|
255 | 255 | 74 | |||||||||
|
Other
|
(2,657 | ) | (2,657 | ) | (3,297 | ) | ||||||
|
Net
Cash from (used in) Investing Activities
|
531,591 | 531,591 | (317,835 | ) | ||||||||
|
Cash
Flows from (used in) Financing Activities:
|
||||||||||||
|
Proceeds
from long-term debt
|
20,000 | 20,000 | 316,851 | |||||||||
|
Payments
of long-term debt
|
(369,518 | ) | (369,518 | ) | (92,537 | ) | ||||||
|
Derivative
upfront receipt
|
- | - | 8,500 | |||||||||
|
Issuance
of common stock, net
|
26,916 | 26,916 | 98,341 | |||||||||
|
Payment
of financing costs
|
(63 | ) | (63 | ) | (5,563 | ) | ||||||
|
Dividends
paid
|
(217,466 | ) | (217,466 | ) | - | |||||||
|
Net
Cash from (used in) Financing Activities
|
(540,131 | ) | (540,131 | ) | 325,592 | |||||||
|
Net
increase (decrease) in cash and cash equivalents
|
12,530 | 12,530 | (3,980 | ) | ||||||||
|
Cash
and cash equivalents at beginning of period
|
17,462 | 17,462 | 29,992 | |||||||||
|
Cash
and cash equivalents at end of period
|
$ | 29,992 | $ | 29,992 | $ | 26,012 | ||||||
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
||||||||||||
|
Interest
paid
|
$ | 22,307 | $ | 22,307 | $ | 13,731 | ||||||
|
NON-CASH
TRANSACTIONS
|
||||||||||||
|
Fair
value below market time charter
|
$ | - | $ | - | $ | 29,714 | ||||||
|
Amounts
owed for capital expenditures
|
$ | - | $ | - | $ | 1,215 | ||||||
APPENDIX
A – SPECIFIC ITEMS AFFECTING NET INCOME (LOSS)
Set forth
below are some of the significant items of income and expense that affected the
Company’s net income (loss) for the fourth quarter and fiscal year of 2006 and
2007, 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)
|
|
Three
Months Ended
|
Year
Ended
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Description
|
December
31, 2006
|
December
31, 2007
|
December
31, 2006
|
December
31, 2007
|
||||||||||||||||||||||||||||||||||||||||||||
|
As
originally reported under the deferral method
|
As
computed under
the
direct expense method
|
As
originally reported under the deferral method
|
As
computed under
the
direct expense method
|
|||||||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||
| $ |
Per
Share
|
$
|
Per
Share
|
$
|
Per
Share
|
$
|
Per
Share
|
$
|
Per
Share
|
$
|
Per
Share
|
|||||||||||||||||||||||||||||||||||||
|
Reported
net income (loss)
|
3,212 | 0.10 | (348 | ) | (0.01 | ) | (37,439 | ) | (0.89 | ) | 15,141 | 0.47 | (11,005 | ) | (0.39 | ) | (49,076 | ) | (1.36 | ) | ||||||||||||||||||||||||||||
|
Restricted
share plan to officers and personnel(1)
|
283 | 0.01 | 283 | 0.01 | 319 | 0.01 | 3,710 | 0.12 | 3,710 | 0.12 | 935 | 0.03 | ||||||||||||||||||||||||||||||||||||
|
Gain
from termination of interest rate swap
|
- | - | - | - | - | - | (650 | ) | (0.02 | ) | (650 | ) | (0.02 | ) | - | - | ||||||||||||||||||||||||||||||||
|
Change
of fair value of interests rate swaps
|
715 | 0.02 | 715 | 0.02 | 5,768 | 0.14 | 3,384 | 0.11 | 3,384 | 0.11 | 4,904 | 0.14 | ||||||||||||||||||||||||||||||||||||
|
Specific
legal fees(2)
|
989 | 0.03 | 989 | 0.03 | 183 | 0.00 | 989 | 0.03 | 989 | 0.03 | 375 | 0.01 | ||||||||||||||||||||||||||||||||||||
|
Bonus
compensation provision to officers and personnel(3)
|
(1,706 | ) | (0.05 | ) | (1,706 | ) | (0.05 | ) | 1,511 | 0.04 | 794 | 0.03 | 794 | 0.03 | 1,511 | 0.04 | ||||||||||||||||||||||||||||||||
|
Specific
repairs(4)
|
- | - | - | - | 2,093 | 0.05 | - | - | - | - | 2,514 | 0.07 | ||||||||||||||||||||||||||||||||||||
|
Dry-docking
expenses(5)
|
- | - | 3,560 | 0.11 | 5,868 | 0.14 | - | - | 26,146 | 0.86 | 5,868 | 0.16 | ||||||||||||||||||||||||||||||||||||
|
Total
|
281 | 0.01 | 3,841 | 0.12 | 15,742 | 0.38 | 8,227 | 0.27 | 34,373 | 1.13 | 16,107 | 0.45 | ||||||||||||||||||||||||||||||||||||
|
Net
income (loss) after specific items
|
3,493 | 0.11 | 3,493 | 0.11 | (21,697 | ) | (0.51 | ) | 23,368 | 0.74 | 23,368 | 0.74 | (32,969 | ) | (0.91 | ) | ||||||||||||||||||||||||||||||||
|
(1)
Relates to stock-based compensation expense
|
|||||||||||||
|
(2)
Relates to legal fees incurred due to the class action
|
|||||||||||||
|
(3)
Bonus compensation paid to the onshore personnel excluding
directors
|
|||||||||||||
|
(4)
Special repairs for the vessels M/T Faultless and M/T
Noiseless
|
|||||||||||||
|
(5)
The actual dry-docking costs net of the amortization that would have been
incurred under the deferral method.
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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
SHIPS INC.
(registrant)
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Dated: April
7, 2008
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By:
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/s/
Evangelos J. Pistiolis
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Evangelos
J. Pistiolis
Chief Executive Officer
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SK 23116
0001 871433