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 November 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 a copy of the press release issued by TOP
Tankers Inc. (the "Company") on November 10, 2005 announcing its third quarter
2005 earnings.
Exhibit 1
---------
NEWS RELEASE for November 10, 2005
Contact: Michael Mason (investors) Stamatis Tsantanis, CFO
Allen & Caron Inc TOP Tankers Inc
212 691 8087 011 30 210 697 8199
michaelm@allencaron.com snt@toptankers.com
TOP TANKERS REPORTS FINANCIAL RESULTS FOR THE THIRD
QUARTER AND THE NINE-MONTH PERIOD OF 2005
ATHENS, GREECE (November 10, 2005) ... TOP Tankers Inc (NasdaqNM:TOPT) today
announced operating results for the third quarter ended September 30, 2005.
For the three months ended September 30, 2005, the Company reported net income
of $7,921,000, or $0.28 per share, compared with net income of $6,500,000, or
$0.42 per share, for the third quarter of 2004. The weighted average number of
basic and diluted shares used in the computations was 28,020,990 and 15,342,390
for the third quarter of 2005 and 2004 respectively. For the three months ended
September 30, 2005, operating income was $13,670,000, compared with $7,881,000
for the third quarter of 2004. EBITDA(1) for the third quarter of 2005 was
$28,324,000, compared with $11,792,000 for previous year's third quarter. Voyage
revenues for the third quarter of 2005 were $50,003,000, compared to $20,896,000
recorded in the third quarter of the previous year.
----------
1 Please read later in this press release for a reconciliation of EBITDA to
net income.
For the nine months ended September 30, 2005, the Company reported net income of
$40,594,000, or $1.45 per share, compared to $13,453,000, or $1.47 per share,
for the nine months ended September 30, 2004. The weighted average number of
basic and diluted shares used in the computations was 27,895,019 and 9,136,861
for the first nine months of 2005 and 2004 respectively. For the nine-month
period ended September 30, 2005, operating income was $53,845,000, compared with
$15,965,000 for the same period last year. EBITDA for the nine-month period
ended September 30, 2005 was $91,171,000, compared to $23,827,000 for the same
period last year. Voyage revenues for the nine-month period ended September 30,
2005, were $153,623,000, compared to $46,052,000 recorded in the same period
last year.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Tankers
Inc, commented, "During the third quarter of 2005, we established the
foundations to further expand our managed fleet and become one of the world's
largest operators of double-hull Suezmax and Handymax tankers. Upon delivery of
the final Suezmax tanker in early December, we will have organically grown the
number of vessels under our management by nine tankers in 2005, to a total of 27
vessels.
In addition to the significant fleet growth, the Company has paid a total of
$1.09 per share of cash dividends so far in 2005, while maintaining conservative
leverage levels of 53%."
TOP TANKERS REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER
The following key indicators serve to highlight changes in the Company's fleet
financial performance during the third quarter and nine-month periods ended
September 30, 2004 and 2005:
Suezmax Fleet
Three Months Ended September 30, Nine Months Ended September 30,
(In U.S. Dollars unless otherwise stated) 2004 2005 Change 2004 2005 Change
---- ---- ------ ---- ---- ------
Total available ship days 199 828 316.1% 399 2,035 410.0%
Total operating days 184 729 296.2% 376 1,828 386.2%
Utilization 92.5% 88.0% -4.8% 94.2% 89.8% -4.7%
Average Suezmax TCE 44,310 27,075 -38.9% 40,814 35,928 -12.0%
Vessel operating expenses per ship per day 5,658 7,743 36.8% 6,055 7,570 25.0%
Handymax Fleet
Three Months Ended September 30, Nine Months Ended September 30,
(In U.S. Dollars unless otherwise stated) 2004 2005 Change 2004 2005 Change
---- ---- ------ ---- ---- ------
Total available ship days 491 1,209 146.2% 855 3,356 292.5%
Total operating days 455 1,142 151.0% 819 3,190 289.5%
Utilization 92.7% 94.5% 1.9% 95.8% 95.1% -0.8%
Average Handymax TCE 15,541 18,369 18.2% 14,581 19,697 35.1%
Vessel operating expenses per ship per day 3,919 4,875 24.4% 4,142 4,992 20.5%
Total Fleet
Three Months Ended September 30, Nine Months Ended September 30,
(In U.S. Dollars unless otherwise stated) 2004 2005 Change 2004 2005 Change
---- ---- ------ ---- ---- ------
Net voyage revenues(2) 17,244 41,126 138.5% 35,920 130,272 262.7%
Total available ship days 960 2,111 119.9% 2,070 5,646 172.8%
Total operating days 817 1,945 138.1% 1,908 5,262 175.8%
Utilization 85.1% 92.1% 8.3% 92.2% 93.2% 1.1%
Average Fleet TCE(2) 21,106 21,144 0.2% 18,826 24,757 31.5%
Vessel operating expenses per ship per day 4,447 5,932 33.4% 4,640 5,828 25.6%
General and administrative expenses per
ship per day 1,460 4,141* 183.6% 1,345 2,612* 94.2%
----------
* The daily General and Administrative expenses include approximately $2,900 for
the 3-month period and $1,160 for the 9-month period of non-cash restricted
stock expense, convertible offering expense write-off and general compensation
provision.
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 September 30, 2005, the Company's fleet size was 22 vessels (including the
5 vessels that were sold and leased back), or 2.0 million dwt, compared with 16
vessels, or 1.1 million dwt on September 30, 2004.
On July 13, 2005, the Company sold the M/T Fearless to a third party. The gain
of $ 10.0 million was recognized in the third quarter of 2005.
On August 3, 2005, the Company sold and leased-back the Handymax tankers M/T
Restless and M/T Sovereign for a period of seven years. The lease is a bareboat
charter, with TOP Tankers performing the operational and commercial management
of the vessels. The Company generated a gain of $7.0 million, which was
amortized over the seven year lease period. The bareboat charter rate is $11,600
per ship per day and both vessels will continue their time charter contracts
with Vitol and Glencore for their remaining period of two and four years,
respectively. This sale and leaseback qualifies as an operating lease under U.S.
GAAP.
On September 14, 2005, the Company sold and leased-back the Handymax tankers M/T
Invincible, M/T Victorious and M/T Relentless for a period of seven years. The
lease is a bareboat charter, with TOP Tankers performing the operational and
commercial management of the vessels. The Company generated a gain of $10.0
million, which was amortized over the seven year lease period. The bareboat
charter rate is $11,500 per ship per day and vessels will continue their time
charter contracts with Glencore for their remaining period of four years. This
sale and leaseback qualifies as an operating lease under the U.S. GAAP.
Upon delivery of all acquisitions announced in September and October 2005, the
Company's fleet under management will be 27 double-hull tankers, consisting of
13 Suezmaxes and 14 Handymaxes, with a total carrying capacity of approximately
2.6 million dwt.
Fleet Deployment
During the third quarter of 2005, the Company had approximately 81% of the
fleet's net operating days on long-term employment contracts, and all
profit-sharing contracts generated profits above the base rate. The average
daily Suezmax rate for the third quarter of 2005 was $27,075 and the average
daily Handymax rate for the same period was $18,369.
For the fourth quarter of 2005, the Company has secured 55% of its Suezmax spot
days at an average of $52,500 per day, and the overall Suezmax average rate is
approximately $42,500 to the date of the announcement, including profit-sharing
allocation and straight time charters. The average rate for the Handymax tankers
in the fourth quarter is approximately $23,000 per day, including profit-sharing
allocation.
The Company has secured approximately 66% of the estimated operating days for
2006 under long-term employment contracts. At the same time, the nine Suezmaxes
operating in the spot market, together with the profit sharing component of the
time charter contracts, expose approximately 64% of the Company's estimated
operating days for 2006 to potentially higher spot rates.
All of the Company's profit-sharing contracts settle on a quarterly basis and
the potentially generated profit is presented in the financial statements for
the corresponding period. Each settlement is full and final (except for voyages
in progress and demurrage), and is not affected by the average rates of future
periods.
The following table presents the Company's fleet list after the two remaining
deliveries and the employment agreements:
Year Daily Profit Sharing
Dwt Built Charter Type Expiry Base Rate Above Base Rate (2005)
--- ----- ------------ ------ --------- ----------------------
13 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.............. 154,970 1991 Time Charter Q2/2007 $28,000 100% first $7,000 + 50% thereafter
Faultless............. 154,970 1992 Time Charter Q2/2010 $37,000(1) None
Priceless............. 154,970 1991 Spot
Noiseless............. 149,554 1992 Spot
Stainless............. 149,599 1992 Spot
Endless............... 135,915 1992 Spot
Limitless............. 136,055 1993 Spot
Errorless(A).......... 147,048 1993 Spot
Edgeless(B)........... 147,048 1994 Spot
Ellen P............... 146,268 1996 Spot
Stormless............. 150,038 1993 Spot
14 Handymax Tankers
Victorious(C)......... 47,084 1991 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50% thereafter
Sovereign(C).......... 47,084 1992 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50% thereafter
Invincible(C)......... 47,084 1992 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50% thereafter
Relentless(C)......... 47,084 1992 Time Charter Q3/2009 $14,500(2) 100% first $500 + 50% thereafter
Vanguard.............. 47,084 1992 Time Charter Q1/2007 $14,250(3) 100% first $250 + 50% thereafter
Restless(C)........... 47,084 1991 Time Charter Q1/2007 $14,250(3) 100% first $250 + 50% thereafter
Spotless.............. 47,094 1991 Time Charter Q1/2007 $14,250(3) 100% first $250 + 50% thereafter
Doubtless............. 47,076 1991 Time Charter Q1/2007 $14,250(3) 100% first $250 + 50% thereafter
Faithful.............. 45,720 1992 Time Charter Q1/2007 $14,250(3) 100% first $250 + 50% thereafter
Topless............... 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............. 46,185 1999 Time Charter Q2/2010 $17,000(4) 30% above base rate
Ioannis P............. 46,346 2003 Time Charter Q3/2010 $18,000(5) 35% above base rate
Total Tanker DWT 2,590,881
----------
A. Expected delivery around November 17, 2005
B. Expected delivery early December 2005
C. Vessels sold and leased back for a period of 7 years.
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.
5. Profit sharing will change in the second year of the contract until
expiration to 100% profit sharing participation in the first $1,000 above
base rate and 50% thereafter.
Credit Facility
As of September 30, 2005, TOP Tankers had total indebtedness of $394.0 million,
provided by the Royal Bank of Scotland (RBS) and DVB Bank, maturing in 2013 and
2012, respectively.
In October 2005, the Company refinanced $196.0 million of its term credit
facility with RBS for a period of seven years and entered into a revolving
credit facility of up to $350.0 million for a period of 10 years. Approximately
$172.0 million out of the total $350.0 million is currently available for
further acquisitions. The average spread with RBS was reduced from 100 basis
points to 86.5 basis points. The Company also refinanced its swap agreements
with RBS, and the loan amounts hedged by interest rate swaps are $100.5 million
at a rate of 4.63% and $36.6 million at a rate of 4.66%, for a period of 5 years
and 4 years, respectively.
In November 2005, the Company entered into a $154.0 million credit facility with
HSH Nordbank to partly finance the acquisition of four Suezmax tankers. The
facility will mature in 2013 and the average spread will be 85 basis points
above LIBOR.
On September 30, 2005, the Company's ratio of indebtedness to total capital was
approximately 53%.
Dividend
During the third quarter of 2005, the Company paid its third quarterly cash
dividend of $0.21 per share and a special cash dividend of $0.25 per share on
July 20 and July 27, respectively. On October 25, 2005, the Company paid its
fourth quarterly dividend of $0.21 per share to shareholders of record as of
October 14, 2005.
Conference Call and Webcast
TOP Tankers' management team will host a conference call on November 10, 2005,
at 11:00 AM EST. Participants should dial into the call 10 - 15 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 174572. An online
archive will also be available immediately following the call at the sites noted
above. Both are available through November 16, 2005.
About TOP Tankers Inc
TOP Tankers Inc is an international provider of worldwide seaborne crude oil and
petroleum products transportation services. Upon delivery of two Suezmax
tankers, the Company will operate a fleet of 27 tankers. The fleet under
management will consist of 13 double-hull Suezmax tankers and 14 double-hull
Handymax tankers, with a total carrying capacity of approximately 2.6 million
dwt of which 88.8 percent are sister ships. Eighteen of the Company's 27 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 Statement
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, 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.
TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Expressed in thousands of U.S. Dollars - except for share and per share
data)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- --------------------------
2004 2005 2004 2005
----------- ------------ ---------- ------------
REVENUES:
Voyage revenues 20,896 50,003 46,052 153,623
EXPENSES:
Voyage expenses 3,652 8,877 10,132 23,351
Vessel operating expenses 4,269 14,421 9,605 34,803
Depreciation and amortization 3,911 14,634 7,802 37,274
General and administrative expenses 1,402 5,499 2,784 11,505
Stock-based compensation - 3,243 - 3,243
Amortization on deferred gain on sale
of vessels - (225) - (225)
(Gain) on sale of vessels (237) (10,115) (237) (10,115)
Foreign currency (gains) / losses, net 18 (1) 1 (58)
----------- ------------ ---------- ------------
Operating income 7,881 13,670 15,965 53,845
----------- ------------ ---------- ------------
OTHER INCOME (EXPENSES):
Interest and finance costs (1,504) (6,280) (2,696) (14,684)
Interest income 123 511 124 1,381
Other, net - 20 60 52
----------- ------------ ---------- ------------
Total other expenses, net (1,381) (5,749) (2,512) (13,251)
----------- ------------ ---------- ------------
Net Income 6,500 7,921 13,453 40,594
=========== ============ ========== ============
Earnings per share, basic and diluted
- Vested shares 0.42 0.28 1.47 1.45
=========== ============ ========== ============
- Non-vested shares 0.28 1.24
============ ============
EBITDA RECONCILIATION(3)
Three Months Ended Nine Months Ended
(Expressed in Thousands of U.S Dollars) September 30, September 30,
---------------------------- --------------------------
2004 2005 2004 2005
----------- ----------- ---------- ------------
EBITDA 11,792 28,324 23,827 91,171
DEPRECIATION AND AMORTIZATION (3,911) (14,634) (7,802) (37,274)
INTEREST AND FINANCE COSTS, NET (1,381) (5,769) (2,572) (13,303)
----------- ----------- ---------- ------------
NET INCOME 6,500 7,921 13,453 40,594
=========== =========== ========== ============
----------
3 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.
TOP TANKERS INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars -
except for share and per share data)
December 31, September 30,
2004 2005
------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 114,768 110,842
Other current assets 26,283 23,706
------------- --------------
Total current assets 141,051 134,548
ADVANCES FOR VESSELS ACQUISITIONS 25,650 10,875
VESSELS, NET 355,997 610,596
OTHER NON-CURRENT ASSETS 17,188 19,026
------------- --------------
Total assets 539,886 775,045
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt 19,540 55,235
Dividends payable 5,845 -
Deferred income, current portion - 2,827
Other current liabilities 17,178 19,761
------------- --------------
Total current liabilities 42,563 77,823
FINANCIAL INSTRUMENTS 248 585
LONG-TERM DEBT, net of current portion 175,266 334,853
DEFERRED INCOME, net of current portion - 15,237
STOCKHOLDERS' EQUITY 321,809 346,547
------------- --------------
Total liabilities and stockholders'equity 539,886 775,045
============= ==============
TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Expressed in thousands of U.S. Dollars)
Nine Months Ended September 30,
-----------------------------------
2004 2005
---------------- ---------------
Cash Flows from (used in) Operating Activities:
Net income 13,453 40,594
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,211 38,384
Amortization of deferred income - (267)
Gain on sale of vessels (237) (10,115)
Change in operating assets and liabilities (2,164) 5,161
Payments for dry-docking (2,819) (6,351)
---------------- ---------------
Net Cash from Operating Activities 16,444 67,406
................ ...............
Cash Flows from (used in) Investing Activities:
Advances for vessels acquisitions - (10,875)
Acquisition of vessels (327,629) (387,319)
Net proceeds from sale of vessels 3,728 153,085
Other 8 (200)
---------------- ---------------
Net Cash used in Investing Activities (323,893) (245,309)
................ ...............
Cash Flows from (used in) Financing Activities:
Proceeds from long-term debt 253,701 284,294
Payments of long-term debt (73,736) (87,256)
Swap termination proceeds - 1,170
Issuance of common stock, net of related
expenses and capital contributions 141,640 -
Issuance of restricted shares - 3,242
Payment of financing costs (2,715) (2,866)
Dividends paid (2,318) (24,607)
---------------- ---------------
Net Cash from Financing Activities 316,572 173,977
................ ...............
Net increase (decrease) in cash and cash equivalents 9,123 (3,926)
Cash and cash equivalents at beginning of period 2,343 114,768
---------------- ---------------
Cash and cash equivalents at end of period 11,466 110,842
================ ===============
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid 2,201 13,200
================ ===============
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: November 10, 2005 By: /s/ Stamatis N. Tsantanis
-------------------------------
Stamatis N. Tsantanis
Chief Financial Officer
23116.0001 #617134