Eagle Bulk Shipping Inc. 4Q 2005 Results Presentation

Transcription

1 Eagle Bulk Shipping Inc. 4Q 2005 Results Presentation March 7, 2006

2 Forward Looking Statements This presentation contains certain statements that may be deemed to be forward-looking statements within the meaning of the Securities Acts. Forward-looking statements reflect management s 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 presentation 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 Eagle Bulk Shipping Inc. 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, Eagle Bulk Shipping Inc. 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 forwardlooking statements include the strength of world economies and currencies, general market conditions, including changes in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs, or actions taken by regulatory authorities, ability of our counterparties to perform their obligations under sales agreements and charter contracts on a timely basis, potential liability from 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 Eagle Bulk Shipping Inc. with the US Securities and Exchange Commission. 1

3 Agenda Fourth Quarter 2005 Highlights The Fleet Industry View Financial Overview Conclusion 2

4 4Q 2005 Highlights

5 4Q 2005 Highlights Net Revenues of $24.3 million Net Income of $12.2 million or $0.39 per share Net Income adjusted for non-cash charge 1 was $12.5 million or $0.40 per share. EBITDA 2 of $19.8 million Declared and paid 4Q Dividend of $0.57 per share Concluded successful equity offering in October 2005 Acquired two 2001-built Supramax vessels u Vessels deployed on 2-year time charters at $24,000/day u Cargo carrying capacity expands by 19% to 643,980 Dwt 1 Non-cash charge is a non-cash compensation charge of $0.3 million. 2 EBITDA, as defined by our credit agreement, is Net Income plus Interest Expense, Depreciation and Amortization, and Exceptional Items. 4

6 Fiscal Year 2005 Highlights Solid Performance Net Income of $6.7 million or $0.30 per share Net Income adjusted for non-cash and or one-time charges 1 was $25.7 million or $1.17 per share Time charter revenues of $59.9 million EBITDA of $43.1 million Total Dividends of $1.11 per share declared. Payout of $33.5 million to shareholders Poised for Growth 13 vessels acquired for $428 million One of the youngest Handymax fleets in the industry Stable and visible cashflows from 1 to 3 year Time Charters Strong balance sheet with Debt to Capital of 30.7% No debt amortization until 2010 Ample liquidity under current facility Make Acquisitions that are accretive to EPS and DPS 1 Non-cash and or one time charges include non-cash compensation charge of $11.7 million, $6.2 million in pre-ipo funded fees to affiliates, and $1.1 million in write-off of deferred financing costs associated with original term loan facility. 5

7 The Fleet

8 Modern, High Quality Fleet of Handymax Vessels Average fleet age of only 6 years compared to industry average of over 15 years 2006 Average Fleet TCE contracted rate of $22,700 per day Sistership strategy provides economies of scale Supramax Handymax Vessel Dwt Age (Years) Daily Charter Rate (US$) Condor 50, ,000 Falcon 50, ,950 Harrier 50, ,750 Hawk I 50, ,750 Merlin 50, ,000 Osprey I 50, ,000 Cardinal 55, ,500 Peregrine 50, ,000 Heron 52, ,000 Sparrow 48, ,500 Griffon 46, ,550 Kite 47, ,000 Shikra 41, ,000 Fleet Total/Average 643, ,700 Fleet Median 5.0 Sister Ships Similar Ships Note: 1 Represents dwt weighted average age 7

9 85% of 2006 Available Days already under contract Time Charter Contracts Provide Stable and Visible Cashflows 85% of fleet covered by contracted revenues from time charters for 2006 Vessel acquisitions lengthen fleet charter coverage and increase revenue visibility Chartering strategy limits exposure to spot market seasonality and volatility Condor Falcon Harrier Supramax Hawk I Merlin Osprey I Cardinal Heron Peregrine Handymax Sparrow Griffon Kite Shikra 1Q Q Q Q

10 Industry View

11 Steadily Increasing Demand Total World Demand for Dry Bulk Shipping Capacity 3,000 Total Dry Bulk Demand CAGR % 5.5% 6.3% Annual Growth E 6.3% 2006E 2007E 4.5% 3.0% Million Tons 2,000 1,000 Minor Bulks (Cement, fertilizers, scrap iron, etc.) Grain Coal 1.0% 3.1% 4.4% 4.0% (1.9%) 8.6% 4.7% 3.5% 5.0% 4.4% 3.1% 6.2% 3.2% 2.7% 4.6% 2.5% 2.7% 2.4% Iron Ore 3.2% 8.2% 12.0% 11.3% 7.0% 4.4% E 2006E 2007E Source: Drewry Note: Demand based on million tons 10

12 Strong Demand Fundamentals Intensive material growth in an industrializing China Rapidly expanding Indian economy Growing global economy Low demand elasticity Restructuring of trade patterns Port congestion continues due to strained global infrastructure 9.3% 2006E GDP Growth 1 (%) 7.5% 7.4% 4.3% China India Asia² Latin America 4.0% 3.6% 2.6% Source: UBS research Notes: 1 Represents E year-over-year growth 2 Excludes Japan, includes Australia & New Zealand 2.4% World US Australia Japan Handymax sector critical to a number of global markets 11

13 Charterers attracted by versatility of Handymax vessels AGGREGATES BAUXITE CEMENT COAL COKE GRAINS IRON ORE SALT SCRAP IRON STEELS MISC. Cardinal a a a a a a Condor a a a a a a Falcon a a a a Griffon a a a a a Harrier a a a a a Hawk I a a a a a Heron a a Kite a a a a a a a Merlin a Osprey I a a a Peregrine a a a a Shikra a a a a a a Sparrow a a a a a a A representation of cargoes carried by EAGLE s Fleet MISC. cargoes include Phosrock, Sugar, Gypsum, HBI and Sulphur Broad cargo coverage gives Handymax market more stable revenues 12

14 New Supramax Asset Class Services Growing Global Needs 9 of the 13 vessels owned by the Company are Supramaxes Smallest segment of the drybulk market provides opportunities Fleet Age and Orderbook (dwt) 40% 36% 32% 28% 24% 20% 16% 12% 8% 4% 0% Orderbook and Fleet Age 32% 16% % of Fleet > 20 years Orderbook as % of Fleet 24% 21% 16% Handymax Panamax Capesize 23% Fleet DWT (Million Tons) ,284 Vsls 56.0 Handy (10,000/34,999 dwt) Aging Handymax fleet 32% of capacity > 20 years old Number of Handymax vessels over 20 years old is 200% of the orderbook World Dry Bulk Fleet 1,434 Vsls 60.5 Handymax (35,000/49,999 dwt) 386 Vsls 20.4 Supramax (50,000/59,999 dwt) 1,375 Vsls 98.1 Panamax (60,000/99,999 dwt) 662 Vsls Capesize (>100,000 dwt) Source: Clarksons as of February

15 Baltic Dry Index in Seasonal Uptrend Jan-05 5-Mar-05 4-May-05 3-Jul-05 1-Sep Oct Dec Feb-06 Source: Clarksons Eagle s contracted revenues insulate Company from BDI volatility 14

16 Financial Overview

17 4 th Quarter and Fiscal 2005 Fleet Data Fleet Operating Days Three months ended June 30, 2005 Three months ended September 30, 2005 Three months ended December 31, 2005 Period from January 26, 2005 (inception) to December 31, 2005 Ownership Days ,109 2,531 Available Days ,099 2,507 Operating Days ,097 2,500 Fleet Utilization 99.6% 99.7% 99.8% 99.7% The Company commenced vessel operations in April Ownership days: The Company defines ownership days as the aggregate number of days in a period during which each vessel in its fleet has been owned. Available days: The Company defines available days as the number of ownership days less the aggregate number of days that its vessels are off-hire due to vessel familiarization upon acquisition, scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels. Operating days: The Company defines operating days as the number of its available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. 16

18 4th Quarter and Fiscal Year 2005 Earnings ($000's) Three-months ended December 31, 2005 Period from January 26, 2005 (inception) to December 31, 2005 REVENUES Net Time Charter Revenues $24,312 $56,066 EXPENSES Vessel Expenses 4,204 11,053 Depreciation and Amortization 4,533 10,412 General & Administrative Expenses 1,238 3,491 One-time Fees to Affiliates - 6,175 Non-cash Compensation Expense ,735 Total Expenses 10,333 42,866 OPERATING INCOME 13,979 13,200 Interest Expense 2,247 7,209 Interest Income (422) (662) NET INCOME $12,154 $6,653 Basic and Diluted Income per Common Share $0.39 $0.30 Weighted Average Shares Outstanding 31,323,913 21,968,824 Adjusted Net Income : Net Income $12,154 $6,653 Add : One-time Fees to Affiliates - 6,175 Add : Non-cash Compensation Expense ,735 Add : Write-off of Deferred Financing Costs - 1,131 Adjusted Net Income : $12,512 $25,694 Basic and Diluted Income per Common Share $0.40 $

19 Low Breakeven Cost Strategy Daily cash breakeven cost of $6,765 per day per vessel (2006E) No principal repayments for a minimum five years $384 $1,681 Dry-Dock Vessel Expenses Technical Mgt Fees G&A Cash Interest (net) $816 $3,600 $284 The Company is anticipating higher crewing costs and higher costs for oil based supplies including lubes and paints. The Company is also making allowance for constraints in yard drydocking capacity which has driven up drydocking costs. 18

20 Strong Balance Sheet BALANCE SHEET DATA ($000's) 31-Dec-05 Cash $24,527 Other Current Assets 9,302 Vessels, net 417,582 Restricted Cash 6,624 Other Assets 4,309 TOTAL ASSETS 462,344 Current Liabilities 6,551 Long-term Debt 140,000 Stockholders' Equity 315,793 Book Capitalization $455,793 Debt / Capitalization 30.7% 19

21 Conclusion

22 Conclusion 85% of 2006 Available Days already under contract 2006 Average Fleet TCE contracted rate of $22,700 per day Among the lowest daily cash costs per vessel among dry bulk peers Long term fundamentals unchanged for healthy and sustainable dry bulk industry dynamics Strong balance sheet provides flexibility for future growth Young fleet, healthy fundamentals support strong earnings and dividends. Management team has demonstrated ability to identify business opportunities and execute accretive acquisitions 21

23 Appendix

24 Reconciliation of Net Income to EBITDA* (in $ 000's) Three-months ended December 31, 2005 Period from January 26, 2005 (inception) to December 31, 2005 Net Income $12,154 $6,654 Interest Expense 2,248 7,209 Depreciation and Amortization 4,533 10,412 Amortization of Pre-paid Revenue EBITDA 19,497 25,165 Adjustments for exceptional items One-time Fees to Affiliates 0 6,175 Non-cash Compensation Expense ,735 Credit Agreement EBITDA 19,855 $43,075 * EBITDA is as defined by the Company s Credit Agreements. EBITDA represents operating earnings before extraordinary items, depreciation and amortization, interest expense, and income taxes, if any. EBITDA is included because it is used by certain investors to measure a company's financial performance. EBITDA is not an item recognized by GAAP and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. EBITDA is presented to provide additional information with respect to the Company s ability to satisfy its obligations including debt service, capital expenditures, and working capital requirements. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation. 23

25 Eagle Bulk Shipping Inc.