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• Adjusted Net Loss of $8.0 million, which excludes losses of $109.0 million resulting from vessel sales and non-cash impairment losses. (*) • Debt reduction of $69.9 million, or approximately 25% of the Company’s outstanding indebtedness. Full Year 2012 • Net Revenues of $55.6 million. • Adjusted EBITDA of $5.0 million, which excludes losses of $167.1 million resulting from vessel sales and non-cash impairment losses. (*) • Adjusted Net Loss of $26.7 million, which excl udes losses of $167.1 million resulting from vessel sales and non-cash impairment losses. (*) • Debt reduction of $137.8 million, or approximately 40% of the Company’s outstanding indebtedness. (*) These are non-GAAP measures. For a reconciliation of these measures please refer to the EBITDA, Adjusted EBITDA and Adjusted Net Income reconcil iation section contained in this press release. Management Discussion: Stamatis Tsantanis, the Company’s Chief Executive Officer, stated: “Seanergy’s financial performance in 2012 was adversel y affected by the prevailing low market rates. Our average daily Time Charter Equi valent (“TCE”) rate, for the year, was reduced almost in half to $7,465 per vessel per day. This is a direct result of our vessels now employed at significantly lower rates as we experience one of the lowest freight markets in the dry bulk industry over the last 15 years. “In this challenging environment, we continue to work with our lenders and advisors to improve the balance sheet and place the Company in a position of strength and increased valuation. Through this process, we have made significant progress in the implementation of our re structuring plans. Since the beginning of 2012 and as of the date of th is press release, we managed to reduce our indebtedness by 50% to $173.0 million through fi nalized agreements with three out of our five lenders. In particular, we sold a total of 13 vessel s, including the ownership of Bulk Energy Transport (Holdings) Limited (“BET”) and four Handysize owni ng subsidiaries. In our continuing effort to improve the Company’s financial position, we remain in discussions with our two lenders in order to restructure our outstanding indebtedness. “Regarding general market conditions, in the fourth qu arter of 2012, we saw a slightly positive turn in economic activity, fuelled by renewed optimism about the Chinese economy, improved financial environment in the United States and relative calm in financial markets driven by the European Central Bank’s commitment to do everything within its mandate to maintain stability in the Eurozone. These developments notwithstanding, macroeconomi c and financial conditions remain fragile, as demonstrated by the recent Cypriot banking crisis. However, against this uncertain economic backdrop, the industrial activity driving dry bulk shipping remains healthy and the main cause of low rates remains vessel oversupply. “Prospects for dry bulk shipping appear to be im proving. On the demand side we expect that the additional infrastructure investme nts recently approved by the Chinese government and the monetary easing taking place in Japan are likely to have a posi tive effect as the two countries have traditionally been the most important drivers of dry bulk demand . Furthermore, we are seei ng a positive reversal from last year’s slump in grain trade volumes, while Indian demand for seabor ne thermal coal is not expected to abate over the next year. On the su pply side, the outstanding orderbook has shrunk considerably and the market is now in the proce ss of absorbing excess vessel capacity. 2012 was a record year for removal of older tonnage, as more than 33 million DWT were scrapped (a 45% increase as compared to 2011). We believe that adverse market conditions are likely to result in another strong year fo r demolition sales.” Christina Anagnostara, the Company’s Chief Financial Officer, stated: “During the fourth quarter of 2012, the Company op erated an average of 15.0 wholly-owned vessels earning a daily TCE of $5,592 compared to $14,806 in the same period of 2011. Net revenues, in the fourth quarter 2012, were $8.5 million, 69% lower than in the same period in 2011 reflecting the smaller size of our fleet and a 62% reduction of the daily TCE due to the weak market conditions. Furthermore, a number of Seanergy ’s vessels came off long term ch arter employment on higher daily rates and had to be employed in the spot market on prevailing lower rates. “After adjusting for losses on vessel sales, Seaner gy’s net loss was $8.0 million compared to net income of $6.6 million in 2011. This reflects the fa ct that the lower TCE earned shrank our operating margins and bottom line profitability. “For 2012, net revenue was $55.6 million, a reduction of 47% compared to $104.1 million in the same period last year. Adjusted net loss was equa l to $26.7 million as oppo sed to an adjusted net income of $4.1 million in 2011. The cost containm ent efforts initiated in 2011 materialized in 2012. Daily vessel operating expenses and management fees per vessel decreased by 12% and 16% respectively, while total General and Administrative expenses reduced by 22%. This however, was not sufficient to compensate the fall in daily TCE resulting from adverse market conditions. “Over the course of the year, we continued our effort s to achieve a viable financial structure that will facilitate Seanergy’s ability to benefit from the eventu al rebound in shipping markets. To this end, we believe that the recent sales of BE T and the four Handysize owning subs idiaries, in full satisfaction of the associated loan facilities, are positive for Seanergy.” Fourth Quarter 2012 Financial Results: Net Revenues Net revenues for the fourth quarter of 2012 decrea sed to $8.5 million from $27.5 million in the same quarter of 2011. The decrease of 69% in net revenues reflects lower freight rates earned in the dry bulk market as compared to the same quarter last year, as well as a 38% reduction in operating days that resulted from vessel sales during the period. EBITDA and Adjusted EBITDA Adjusted EBITDA was negative $1.7 million for the fourth quarter of 2012, excluding $109.0 million of losses resulting from vessel sales and non-cash impairment losses. Including the aforementioned items, EBITDA was negative $110.7 million. For the fourth quarter of 2011, EBITDA was $15.6 million. For more information please refer to the EBITDA and Adjusted EBITDA reconciliation section contained in this press release. Net Loss For the fourth quarter of 2012, Net Loss amount ed to $117.0 million or $9.79 loss per basic and diluted share, as compared to a net profit for the fourth quarter of 2011 of $6.6 million, or $0.91 per basic and diluted share, based on weighted average common shares outstanding of 11,957,064 basic and diluted for the fourth quarter of 2012, 7,314,330 basic and diluted for the fourth quarter of 2011. For the fourth quarter of 2012, Adjusted Net Loss excluding losses from vessel sales and non-cash impairment losses was $8.0 million, as compared to Net Income of $6.6 million in 2011. Debt Reduction Seanergy ended the fourth quarter of 2012 with $208.6 million of outs tanding debt. This reflects the reduction of our outstanding indebtedness by $69. 9 million, during the three month period ended December 31, 2012. Full Year Ended December 31, 2012 Financial Results: Net Revenues Net revenues in 2012 decreased to $55.6 million from $104.1 million during 2011. The decrease in net revenues by 47% is due to the market-induced weakness in the daily rates earned by our vessels and the reduced size of our fleet, which resulted in 20% fewer operating days. EBITDA and Adjusted EBITDA Adjusted EBITDA was $5.0 million for 2012, excluding $167.1 million of losses resulting from vessel sales and non-cash impairment losses, as comp ared to $53.8 million in 2011. Including the aforementioned charges, EBITDA was negative $1 62.1 million in 2012, while EBITDA was negative $148.1 million in 2011. Excluding the effects of losses resulting from vessel sales and non-cash impairment losses, a 49% fall in daily TCE and fewer operating days for the fleet resulted in deteriorating operating performance in 2012. For more information please refer to the EBITDA and Adjusted EBITDA reconciliation section contained in this press release. Net Loss In 2012, Net Loss amounted to $193.8 million, or $16.74 loss per share, based on weighted average common shares outstanding of 11,576,576 basic and d iluted. In 2011, Net Loss was $197.8 million or $27.04 loss per share, based on weighted averag e common shares outstanding of 7,314,636 basic and diluted. For 2012, Adjusted Net Loss, Net Loss excluding lo sses from vessel sales and non-cash impairment losses, was $26.7 million, as compared to Net Income of $4.1 million in 2011. Debt Reduction Seanergy ended 2012 with $208.6 million of outs tanding debt. This reflects a reduction of our overall indebtedness by $137.8 million. Fourth Quarter 2012 Developments: Sale and Purchase Transactions On October 15, 2012, Seanergy delivered the Clipper Grace, a 30,548 DWT Handysize vessel built in 4 2007, to its new owners. Gross proceeds amounted to $11.25 million and were used to repay debt. On October 29, 2012, Seanergy delivered the BET Intruder, a 69,235 DWT Panamax vessel built in 1993, to its new owners. Gross proceeds amounted to $4.8 million and were used to repay debt. On December 4, 2012, Seanergy delivered the Clipper Glory, a 30,570 DWT Handysize vessel built in 2007, to its new owners. Gross proceeds amounted to $11.25 million and were used for debt repayment and working capital purposes. Sale of the Bulk Energy Transport (Holdings) Limited (BET) Subsidiary As part of its financial restructuring plan, Se anergy reached an agreem ent to sell its 100% ownership interest in BET for a nominal consideration. On the date of the agreement, the fleet of BET consisted of two Capesize dry-bulk carrier ve ssels with a carrying capacity of 313,061 DWT. The buyer is a company ultimately controlled by members of the Restis family, our controlling shareholders. The transaction was consummated as of December 30, 2012. In connection to the sale, the Company’s board of directors obtained a fa irness opinion from an independent third party. As a result of the sale, our total indebtedness was reduced by approximately $46.7 million. The Appointment of New Chief Executive Officer Effective October 1, 2012, Stamatis Tsantanis su cceeded Dale Ploughman as the Chief Executive Officer of the Company and has also served as Director since that date. Mr. Ploughman continues to serve as the Chairman of the Board of Dire ctors and as a Director of the Company. Subsequent Events: Sale of Subsidiaries in Satisfaction of DVB Loan On January 29, 2013, Seanergy’s subsidiary, Mari time Capital Shipping Limited, sold its 100% ownership interest in the four subsidiaries that owned the Handysize dry bulk vessels Fiesta, Pacific Fantasy, Pacific Fighter and Clippe r Freeway for a nominal consideration. The buyer is a third-party nominee of the lenders under the senior secured cred it facility with DVB Merchant Bank (Asia) Ltd., as agent. In connection to the sale, the Company’s Board of Directors obtained a fairness opinion from an independent third party. In exchange for the sale, approximatel y $30.3 million of outstanding debt was discharged. Sale and Purchase Transactions On April 10, 2013, Seanergy sold the African Oryx, a 24,112 DWT Handysize vessel built in 1997, to its new owners. Gross proceeds amounted to $4.1 million and were used to repay debt. Debt Outstanding Following the two above mentioned transactions, the total outstanding debt of the Company was reduced from $208.6 million on December 31, 2012 to $173.0 million as of the date of this press release. Financial Developments: Debt Restructuring The Company has entered into disc ussions with its lenders aimed at developing and implementing a plan for improving the Company's liquidity and op erating flexibility. The goal of the Company’s restructuring plan is to develop a solid capital st ructure that will allow the Company to manage the current difficult market conditions and place Seanergy in a competitive position to re-grow its fleet and balance sheet in the long te rm. The Company has appointed Houlihan Lockey and Axia Ventures Group to advise on the development of the restructuring plan. To date, the Company has finalized agreements with 3 out of its 5 lenders, including lenders acting as agents. The Company continues to use its best efforts to obtain waivers from its remaining two lenders, relating to various restrictive covenants and defa ults, as well as amendment of debt profile and maturities and an agreement that lenders will forbear from exercising remedies under their respective debt arrangements. However, there can be no assurance that these ag reements will be concluded, in which case the lenders could exercise their remedies, which in turn would adversely affect our business. Ability to Continue as a Going Concern Over the past year, due to shipping sector volatility and economic difficulties, the Company has experienced significant losses and reduction in cash which has affected its ability to satisfy its obligations. The Company experience d significant reduction in cash flow, as it had to re-charter its vessels at low prevailing rates. As a result of the above, the Company defaulted under its loan agreements in respect of certain covenants (including, in some cases, the failure to make principal and interest payments, the failure to satisfy financial covenants and the triggering of cross default provisions). To date, the Company has not obtained waivers of all these defaults from its lenders. Since January 1, 2012, the Company has sold or otherwise disp osed a total of 13 vessels (or the owners hip of certain of its vessel owning subsidiaries) in connection with its restructuring, and any proceeds have been used to repay the related debt. Proceeds from the sale of additional vessels are expect ed to be insufficient to fully repay the related debt and, therefore, it is likely that the Company will continue to have significant debt unless it enters into satisfactory arrangemen ts with its lenders for the discharge of all such obligations. During the restructuring process, the lenders have continued to reserve their rights in respect of events of default under the loan agreements. The lenders have not exercised their remedies at this time, including demand for imme diate payment, however, the lenders could change their position at any time. As such, there can be no assurance that a satisfactory final agreement will be reached with the lenders in the restructuring, or at all. While the Company continues to use its best efforts to complete the restructuring, there can be no assurance that the negotiations will be successful or that it will obtain waivers or amendments from the lenders. Failure to obtain such waivers or amendments could materially and adversely affect the Company’s business and operations. Furthermore, the impact of the final terms of any restructuring is uncertain. Due to the above, the Company’s $208. 6 million outstanding debt as of December 31, 2012 is classified as current. Full report at: www.seanergymaritime.com About Seanergy Maritime Holdings Corp. Seanergy Maritime Holdings Corp. is a Marshall Islands corporatio n with its executive offices in Athens, Greece. The Company is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry bulk carriers. As of today, the Company’s fleet consists of 7 drybulk carriers (two Panamax, two Supramax, and three Handysize vessels) with a total carrying capacity of approximately 326,255 dwt and an average fleet age of 13.5 years. The Company's common stock trades on the NASDAQ Capital Market under the symbol “SHIP” Seanergy Maritime Corp. press release |
Seanergy Maritime Holdings Corp. Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2012