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 2005
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
Set forth herein as Exhibit 1 is the earnings release of TOP Tankers
Inc. for the quarter ending March 31, 2005.
Exhibit 1
TOP TANKERS REPORTS FIRST QUARTER 2005 EPS OF $0.69 NOT INCLUDING $0.24 PER
SHARE IN CASH COMPENSATION
Athens, Greece, April 25, 2005 --
TOP Tankers Inc. (NasdaqNM: TOPT) today announced operating results for the
first quarter of 2005.
For the three months ended March 31, 2005, the Company reported net income of
$19,121,000, or $0.69 per share, compared with net income of $1,244,000, or
$0.21 per share, for the first quarter of 2004. Net income for the first quarter
of 2005 does not include $6.8 million in cash or $0.24 per share that the
Company received as compensation in the amount of $29,000 per day per vessel
from February 1, 2005 to the delivery date of five Suezmax tankers. The $6.8
million in cash we received was treated as a reduction of the purchase price of
the vessels on our books. If these fees had been recognized as income, the
Company's reported net income for the first quarter of 2005 would have been
$25,873,000 or $0.93 per share. The weighted average number of basic and diluted
shares used in the computations was 27,830,990 and 6,000,000 for the first
quarter of 2005 and 2004, respectively.
For the three months ended March 31, 2005, operating income was $20,975,000,
compared with $1,598,000 for the first quarter of 2004. EBITDA(1) for the first
quarter of 2005 was $29,719,000, compared with $3,036,000 for previous year's
first quarter. EBITDA for the first quarter of 2005 does not include $6.8
million in cash that the Company received as compensation for the delayed
delivery of five Suezmax tankers acquired with the proceeds of our follow-on
offering in November 2004. If these fees had been recognized as income, EBITDA
for the first quarter of 2005 would have been $36,471,000. Voyage revenues for
the first quarter of 2005 were $47,291,000, compared to $7,728,000 recorded in
the first quarter of the previous year.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Tankers
Inc., commented, "During the first quarter of 2005, we experienced another
historically high spot charter market, notwithstanding concerns that had been
expressed by industry participants on the continued strength of the market. We
took advantage of these strong market conditions to secure long term period
employment for four Suezmax tankers and extended the existing period charters
for four of our Handymax tankers to the second half of 2009. We continued the
growth of our fleet by acquiring four modern double hull Handymax tankers and
chartering them for five years at attractive base rates with profit-sharing. We
also agreed to sell our remaining singe-hull vessel, consistent with the
commitment we made during our IPO to operate a 100% double-hull tanker fleet."
----------
1 EBITDA represents earnings before interest, taxes, depreciation and
amortization. EBITDA does not represent and should not be considered as an
alternative to net income or cash flow from operations, as determined by
GAAP, and our calculation of EBITDA may not be comparable to that reported
by other companies. EBITDA is included in this press release because it is
a basis upon which we assess our liquidity position and because we believe
that it presents useful information to investors regarding our ability to
service and/or incur indebtedness.
The following key indicators serve to highlight changes in the Company's
financial performance during the first quarters ended March 31, 2004 and 2005:
Total Fleet
Three Months Ended March 31,
(In U.S. Dollars unless otherwise stated) 2004 2005 % Change
----- ----- --------
Total available ship days 473 1,423 200.8%
Total operating days 469 1,401 198.7%
Utilization 99.2% 98.5% -0.7%
TCE(2) per ship per day under spot voyage charter 13,422 43,280 222.5%
TCE per ship per day under time charter 12,453 21,532 72.9%
TCE (Fleet Average) 12,957 29,123 124.8%
Vessel operating expenses per ship per day 5,190 5,682 9.5%
General and administrative expenses per ship per day 1,402 2,093 49.3%
Net operating cash flow per ship per day 6,365 21,348 235.4%
----------
2 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.
Fleet Report
As of March 31, 2005, the Company's fleet size was 18 vessels, or 1.3 million
dwt from 15 vessels, or 1.08 million dwt on December 31, 2004. During the first
quarter of 2005, the Company took delivery of two double-hull product tankers
and one double-hull Suezmax tanker. In addition, the Company agreed to sell its
remaining single-hull vessel, the M/T Yapi. The vessel is expected to be
delivered to its new owners on or about July 31, 2005. As of March 31, 2005, we
operated a fleet of 18 tankers. The fleet consisted of 5 Suezmaxes, 12
Handymaxes and 1 Handysize vessel of approximately 1.3 million dwt.
Fleet Deployment
During the first quarter of 2005, the Company had approximately 65% of the
fleet's net operating days on long-term employment contracts. The Company also
announced on April 20, 2005, the signing of new employment agreements for four
of its Suezmaxes and the extension of the existing employment contracts for four
of its Handymaxes. Following these new contracts, all 14 Handymaxes and four out
of nine Suezmaxes will be employed on time charter contracts. In total, 18 of
the Company's 23 tankers will be on time charter contracts with an average term
in excess of three years. All but one of these time charters include profit
sharing agreements.
The Company has secured approximately 76% of the estimated working days for 2005
and 78% for 2006 under time charter contracts. At the same time, the five
Suezmaxes operating in the spot market, together with the profit sharing
component of the time charter contracts, expose approximately 57% of the
Company's estimated working days for 2005 and 58% for 2006 to potentially higher
spot rates.
Suezmax Fleet:
During the first quarter of 2005, the Company's Suezmax fleet operated in the
spot market consisted of only two vessels, earning on average approximately
$49,432 per vessel per day on a time charter equivalent (TCE) basis.
On April 20, 2005 the Company announced that it has entered three of its Suezmax
tankers into two-year time charter agreements with Glencore SA, one of the
world's largest oil traders. Pursuant to these agreements, the M/T Stopless, M/T
Timeless and M/T Flawless will earn base rates per day of $28,000 during the
term of the contracts. Should a vessel generate revenue in excess of its base
rate over the duration of the contract, TOP Tankers will receive 100% of the
first $7,000 per day in excess of the base rate, up to $35,000 per day, and 50%
of the excess thereafter.
In addition, TOP Tankers has entered one Suezmax tanker into a five-year time
charter contract with Hyundai Merchant Marine. The M/T Faultless will earn
$37,000 per day during the first two years of the time charter contract, $36,000
per day for the third year and $35,000 per day for the remaining two years
through the expiration of the contract.
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 and additional
profit-sharing.
Four of these contracts are with Glencore and have a base rate of $14,500 per
day. Should a vessel generate revenue in excess of its base rate over the
duration of the contract, TOP Tankers receives 100% of the first $500 per day in
excess of the base rate and 50% of the excess thereafter. The Company extended
these two-year time charter contracts by three years. The new three-year
contracts will commence immediately upon the expiration of the current
contracts. The base rates per day for the new three-year periods will be
$14,000. Should a vessel generate revenue in excess of the base rates over the
duration of these contracts, TOP Tankers will receive 100% of the first $500 per
day in excess of the base rate and 50% of the excess thereafter.
The Company has also entered into five-year employment agreements with Glencore
for all four of its double-hull Handymax tankers delivered during March and
April 2005. Pursuant to these time charter agreements, the M/T Taintless, M/T
Dauntless, M/T Soundless and M/T Topless will earn a base rate of $17,000 per
day during the first year of their respective contracts. Should a vessel
generate revenue in excess of its base rate over the first year of the contract,
TOP Tankers will receive 30% of the excess. From the second year through the
expiration of these contracts, the base rates per day will be $16,250. Should a
vessel generate revenue in excess of its base rate per day during this period,
TOP Tankers will receive 100% of the first $1,000 in excess of its base rate and
50% of the excess thereafter.
Six Handymax vessels have been chartered to Vitol at a base rate of $14,250 per
day until December 31, 2005 and base rate of $13,250 per day from January 1,
2006 until expiration of the contracts in February or March of 2007, as well as
a profit sharing provision based on the actual rate that the charterer generates
from the vessel. Under the profit sharing provision, the Company receives, on a
quarterly basis, the first $250 per day (until December 31, 2005) and the first
$1,250 per day (from January 1, 2006 until expiration of the contracts) that the
charterer generates from the vessel in excess of the base rate and 50% of the
excess thereafter above $14,500 per day.
Including the profit-sharing allocated to the Company from these profit-sharing
agreements, the Handymax fleet, earned on average approximately $21,564 per
vessel per day on a time charter equivalent (TCE) basis. During the first
quarter of 2005, the Company's Handysize vessel M/T Yapi operated in the spot
market, earning on average approximately $10,278 per ship per day. The Company
agreed to sell this vessel and expects delivery to its new owners on or about
July 31, 2005.
- TABLE FOLLOWS -
The following table presents the Company's fleet list and the employment
agreements:
Year Daily Profit Sharing
Dwt Built Charter Type Expiry Base Rate Above Base Rate (2005)
--- ----- ------------ ------ --------- ----------------------
9 Suezmax Tankers
Timeless.............. 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Flawless.............. 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Stopless A............ 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Priceless............. 154,970 1991 Spot
Faultless B........... 154,970 1992 Time Charter Q2/2010 $37,000(1) None
Noiseless C........... 149,554 1992 Spot
Stainless A........... 149,599 1992 Spot
Endless............... 135,915 1992 Spot
Limitless............. 136,055 1993 Spot
14 Handymax Tankers
Victorious............ 47,084 1991 Time Charter Q3/2009 $14,500 2 100% first $500 + 50% thereafter
Sovereign............. 47,084 1992 Time Charter Q3/2009 $14,500 2 100% first $500 + 50% thereafter
Invincible............ 47,084 1992 Time Charter Q3/2009 $14,500 2 100% first $500 + 50% thereafter
Relentless............ 47,084 1992 Time Charter Q3/2009 $14,500 2 100% first $500 + 50% thereafter
Vanguard.............. 47,084 1992 Time Charter Q3/2007 $14,250 3 100% first $250 + 50% thereafter
Restless.............. 47,084 1991 Time Charter Q3/2007 $14,250 3 100% first $250 + 50% thereafter
Spotless.............. 47,094 1991 Time Charter Q3/2007 $14,250 3 100% first $250 + 50% thereafter
Doubtless............. 47,076 1991 Time Charter Q3/2007 $14,250 3 100% first $250 + 50% thereafter
Faithful.............. 45,720 1992 Time Charter Q2/2007 $14,250 3 100% first $250 + 50% thereafter
Fearless.............. 44,646 1992 Time Charter Q2/2007 $14,250 3 100% first $250 + 50% thereafter
Topless D............. 47,262 1998 Time Charter Q2/2010 $17,000 4 30% above base rate
Taintless............. 46,217 1999 Time Charter Q1/2010 $17,000 4 30% above base rate
Dauntless............. 46,168 1999 Time Charter Q1/2010 $17,000 4 30% above base rate
Soundless E........... 46,185 1999 Time Charter Q2/2010 $17,000 4 30% above base rate
Total Tanker DWT 1,998,845
Remaining vessel deliveries during the 2nd quarter:
A. Delivered on April 1, 2005
B. Delivered on April 11, 2005
C. Delivered on April 15, 2005
D. To be delivered on or about April 25, 2005
E. Delivered on April 19, 2005
1. Base rate will change to $36,000 in the third year of the contract and
$35,000 in the fourth year until expiration.
2. Base rate will change to $14,000 in the third year of the contract until
expiration.
3. Base rate will change to $13,250 from 1/1/2006 until expiration of the
contracts, with 100% profit sharing participation in the first $1,250 above
base rate and 50% thereafter.
4. Base rate will change to $16,250 in the second year of the contract until
expiration, with 100% profit sharing participation in the first $1,000 above
base rate and 50% thereafter.
Credit Facility
As of March 31, 2005 TOP Tankers had total indebtedness of $340 million,
provided by the Royal Bank of Scotland and DVB Bank, maturing in 2013 and 2012
respectively. On March 31, 2005, the Company entered into three interest rate
swap agreements with Royal Bank of Scotland for the amounts of $93.5 million,
$36.5 million and $27.9 million for a period of five, four and four years,
respectively. Under these agreements the interest rate is fixed at 4.72%, 4.66%
and 4.5775%, respectively, in addition to the applicable margin. The interest
rate for the remaining balance of the loan is LIBOR, plus the margin, whereas
the interest rate for the DVB loan is LIBOR, plus 1.25% margin. On March 31,
2005, the Company's ratio of indebtedness to total capital was approximately
50.3%.
Dividend
The Company paid its second quarterly dividend of $0.21 per share on April 14,
2005, to shareholders of record as of March 31, 2005.
Conference Call and Webcast
TOP Tankers' management team will host a conference call at 10:00 a.m. EDT on
Tuesday, April 26, 2005, to review the results and discuss other corporate news
and its outlook. Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 877-407-8035 (from the US and
Canada) or +1 201-689-8035 (from outside the US and Canada). A live webcast of
the conference call will also be accessible via the Internet at
www.toptankers.com, or by going to www.vcall.com.
A telephonic replay of the conference call will be available by dialing
877-660-6853 (from the US and Canada) or +1 201-612-7415 (from outside the US
and Canada); enter account number 286 and conference ID number 148997. An online
archive will also be available immediately following the call at the sites noted
above. Both are available through May 2, 2005.
About TOP Tankers Inc.
TOP Tankers Inc. is an international provider of worldwide seaborne
transportation services of bulk commodities. Including vessels delivered in
April 2005, the Company owns and operates a fleet of 23 tankers transporting
crude oil and refined petroleum products. The fleet consists of nine double-hull
Suezmax tankers and 14 double-hull Handymax tankers, with a total carrying
capacity of approximately 2.0 million dwt of which 93.1% of the fleet are sister
ships. Eighteen of the Company's 23 tankers are on time charter contracts with
an average term of over three years with all but one of the time charters
including profit sharing agreements.
Forward-Looking Statements
Matters discussed in this release 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 release 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 to scheduled and unscheduled drydocking, changes in
TOP Tankers' 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.
- TABLES FOLLOW -
TOP TANKERS INC.
(Formerly Ocean Holdings Inc.)
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Expressed in thousands of U.S. Dollars - except for share and per share data)
Three Months Ended March 31,
----------------------------
2004 2005
------- -------
REVENUES:
Voyage revenues 7,728 47,291
EXPENSES:
Voyage expenses 1,651 6,490
Vessel operating expenses 2,455 8,085
Depreciation and amortization 1,378 8,736
General and administrative expenses 663 2,979
Foreign currency (gains) / losses, net (17) 26
-------- -------
Operating income 1,598 20,975
======== =======
OTHER INCOME (EXPENSES):
Interest and finance costs (414) (2,510)
Interest income - 648
Other, net 60 8
-------- -------
Total other expenses, net (354) (1,854)
-------- -------
Net Income 1,244 19,121
======== =======
Earnings per share, basic and diluted 0.21 0.69
======== =======
Weighted average number of shares,
basic and diluted 6,000,000 27,830,990
EBITDA RECONCILIATION
(Expressed in Thousands of U.S. Dollars)
Three Months Ended March 31,
----------------------------
2004 2005
------- -------
EBITDA 3,036 29,719
DEPRECIATION AND AMORTIZATION (1,378) (8,736)
INTEREST AND FINANCE COSTS, NET (414) (1,862)
NET INCOME 1,244 19,121
TOP TANKERS INC.
(Formerly Ocean Holdings Inc.)
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars - except
for share and per share data)
December 31, March 31,
2004 2005
---- ----
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 114,768 52,411
Other current assets 26,283 31,503
-------- -------
Total current assets 141,051 83,914
FIXED ASSETS:
Advances for vessels acquisitions 25,650 114,765
Vessels, net 355,997 480,837
Deferred charges and other non-current assets 17,188 16,223
-------- -------
Total assets 539,886 695,739
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt 19,540 32,677
Dividends payable 5,845 5,845
Other current liabilities 17,426 14,073
-------- -------
Total current liabilities 42,811 52,595
-------- -------
LONG-TERM DEBT, net of current portion 175,266 307,138
STOCKHOLDERS' EQUITY 321,809 336,006
Total liabilities and stockholders' equity 539,886 695,739
======== =======
TOP TANKERS INC.
(Formerly Ocean Holdings Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Expressed in thousands of U.S. Dollars)
Three Months Ended March 31,
----------------------------
2004 2005
---- ----
Cash Flows from (used in) Operating Activities:
Net income 1,244 19,121
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,396 8,917
Change in operating assets and liabilities (1,823) (7,652)
------- --------
Net Cash from Operating Activities 817 20,386
------- --------
Cash Flows from (used in) Investing Activities:
Advances for vessels acquisitions - (94,060)
Acquisition of vessels and equipment (75,846) (127,666)
Other (116) -
------- --------
Net Cash used in Investing Activities (75,962) (221,726)
------- --------
Cash Flows from (used in) Financing Activities:
Proceeds from long-term debt 59,900 157,531
Payments of long-term debt (1,021) (10,000)
Capital contributions 17,077 -
Payment of financing costs (330) (2,703)
Dividends paid (2,318) (5,845)
------- --------
Net Cash from Financing Activities 73,308 138,983
------- --------
Net decrease in cash and cash equivalents (1,837) (62,357)
Cash and cash equivalents at beginning of period 2,343 114,768
------- --------
Cash and cash equivalents at end of period 506 52,411
======= ========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid 336 3,370
======= ========
# # # #
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: April 27, 2005 By: /s/ Stamatis N. Tsantanis
--------------------------
Stamatis N. Tsantanis
Chief Financial Officer
23116.0001 #566479