B+H Ocean Carriers, Ltd. Announces Unaudited Results for the First Quarterly Period Ended March 31, 2006.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- B+H Ocean Carriers B+H Ocean Carriers (OSE: BHOC, AMEX: BHO) is an international shipping company that operates seven bulk ships, seven product tankers and two chemical tankers. Based in Hamilton, Bermuda it also has offices in Oslo, Singapore, Bristol and New York. Ltd. (AMEX AMEX See: American Stock Exchange : BHO BHO Browser Helper Object BHO Bundeshaushaltsordnung BHO Barack Hussein Obama BHO Bhopal, India (airport code) BHO British History Online BHO Banjo Hangout (website) BHO Battle Handover ) reported unaudited net income of $8.9 million or $1.26 per share basic and $1.22 per share diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , for the three months ended March 31, 2006, compared to unaudited net income of $2.0 million, or $0.52 per share basic and $0.49 diluted, for the three months ended March 31, 2005. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the three months ended March 31, 2006 was $13.2 million as compared to $4.9 million for the comparable period of 2005. Basic earnings per share calculations are based on weighted average shares outstanding of 7,087,785 and 3,854,145 respectively, for the three months ended March 31, 2006 and 2005. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of calculations are based on weighted average shares outstanding of 7,315,224 and 4,139,585 respectively, for the three months ended March 31, 2006 and 2005. The increase in the weighted average number of shares outstanding is due to the issuance of 3,243,243 shares in the Company's $60 million Equity Offering in May 2005. On April 12, 2006, the Company obtained a listing on the Oslo Stock Exchange Oslo Stock Exchange An exchange founded in 1819 and trading stocks, bonds, and stock options that is considered the options market of Norway. . The following is a discussion of our financial condition and results of operations for the quarterly period ended March 31, 2006 and 2005. You should read this section together with the unaudited and audited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the periods mentioned above. Quarter Ended March 31, 2006 (unaudited) versus March 31, 2005 (unaudited) Revenues Revenues from voyage VOYAGE, marine law. The passage of a ship upon the seas, from one port to another, or to several ports. 2. Every voyage must have a terminus a quo and a terminus ad quem. , time and bareboat charters A bareboat charter is an arrangement for the hiring of a boat, whereby no crew or provisions are included as party of the agreement; instead, the people who rent the boat from the owner are responsible for taking care of such things. increased $7.8 million or 56% from the first quarter of 2005 to that of 2006. The increase is due to the vessel VESSEL, mar. law. A ship, brig, sloop or other craft used in navigation. 1 Boul. Paty, tit. 1, p. 100. See sup. 2. By an act of congress, approved July 29, 1850, it is provided that any person, not being an owner, who shall on the high seas, willfully, with. acquisitions made in 2005 and 2006. The Company, through wholly-owned subsidiaries, acquired four combination carriers and one Panamax product tanker in 2005 and one combination carrier in the first quarter of 2006. Other revenue of $0.9 million was earned in respect of the combination carrier acquired in 2006, in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. time-charter revenue, from the January January: see month. 15, 2006 effective date of the purchase until the closing date. Voyage Expenses Voyage expenses decreased $0.6 million or 26% from 2005. The decrease is due to the fact that there were 155 voyage days during the three month period ended March 31, 2005 whereas there were only 34 voyage days during this period in 2006. The change is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the Company's deliberate Willful; purposeful; determined after thoughtful evaluation of all relevant factors; dispassionate. To act with a particular intent, which is derived from a careful consideration of factors that influence the choice to be made. shift of exposure from the spot market to time charter employment. The ship owner is responsible for the port, canal and fuel charges of a voyage charter but is not responsible for these costs when on either a time or bareboat charter. Vessel Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Vessel operating expenses increased $0.8 million or 14% for the three month period ended March 31, 2006 versus the comparable period in 2005. This increase is the result of the increase in number of vessels Vessels are a post-rock band from Leeds, UK. Vessels were born from the ashes of A Day Left in September 2005. In 2006 they self-released a 5 track eponymous ep, and played many gigs including the unsigned stage at Leeds Festival. comprising the Company's fleet. Depreciation and Amortization The increase in depreciation and amortization of $1.4 million or 64% is due to the increase in the age, size and number of vessels comprising the Company's fleet. The five vessels acquired during 2005 are considerably larger and younger on average than other vessels in the fleet and were therefore acquired at prices that are significantly higher than previous acquisitions. Therefore, the increase in depreciation is higher relative to the percentage increase in the number of vessels. General and administrative expenses Management fees increased by $0.1 million, or 50%, to $0.3 million for the three month period ended March 31, 2006 compared to $0.2 million for the prior period. The increase is due to the increase in the number of vessels and therefore the number of months during which fees were incurred. Consulting, professional and other expenses increased $0.4 million or 60%. A portion of the increase is due to changes in the consulting arrangement with JV Equities. Costs for director and officers insurance, other consulting, travel and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most also increased. Interest expense and interest income The $1.5 million (220%) increase in interest expense is due to the impact of an increase of $ 44.7 million in debt for the acquisition of two vessels in the third and fourth quarters of 2005, a capital lease obligation related to the acquisition in 2006 and to a full quarter of the $102 million loan drawn down in February February: see month. and March 2005, which increase in debt was partly offset by the impact of scheduled loan repayments in 2005 and 2006. The increase in interest income of $0.5 million is due to the fact that the Company's average daily cash balance each month in the first quarter of 2006 was $62.6 million compared to an average daily cash balance of $10.2 million for the same period in 2005. Equity in income of Nordan OBO OBO Or Best Offer (used in for sale ads) OBO On Behalf Of OBO Oboe (music scores) OBO Observation (UK) OBO One By One (animal rescue) II Inc Equity in income of Nordan OBO II Inc of $0.4 million represents income from the Company's 50% interest in an entity which is the disponent owner of a 1992-built 75,000 DWT DWT abbr. 1. deadweight tonnage 2. deadweight tons combination carrier through a bareboat charter party, from the January 15, 2006 effective date of the acquisition through March 31, 2006. The terms of the transaction were based on a vessel value of $30.4 million and include a three-year charter which commenced in February 2006. The charter includes a 50% profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of arrangement above a guaranteed minimum daily rate. Liquidity and Capital Resources Cash at March 31, 2006, amounted to $46.9 million, a decrease of $13.9 million as compared to December December: see month. 31, 2005. The decrease in the cash balance is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to outflows for investing activities of $17 million and financing activities of $ 9.2 million which were offset by net inflows from operations of $12.3 million. The outflow for financing activities is primarily attributable to the payment of mortgage principal of $9.2 million. The outflow for investing activities is attributable to an investment in a combination carrier for $3.64 million and the 50% investment in Nordan OBO II Inc. of $13.6 million. This was offset by an increase in the fair value of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $0.2 million. Annual Report on Form 20-F filed with the Securities and Exchange Commission The Company also announced that it had filed its Annual Report on Form 20-F for the period ended December 31, 2005. Certain of the financial results were modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. since the earnings release dated March 22, 2006 to reflect the financial reporting requirements of FTB FTB Franchise Tax Board (California; they collect income and sales tax) FTB Family Tax Benefit (Australian welfare assistance) FTB First Time Buyer (housing) 88-1 under US Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). The Company noted that FTB 88-1 requires that revenue recognition for three of its period time charters must be based on the average rate to be earned over the five year term of the charter parties, rather than the rates actually earned and paid by the charterer from year to year. The Company advised that for the year ended December 31, 2005, net income was $20.1 million and EBITDA was $36.8 million. Deferred income totaled $5.4 million and included $2.7 million of time charter revenue actually earned and paid in full during 2005, but which could not be recognized as revenue for the period under FTB 88-1. The Company said its cash position remained unchanged from that reported on March 22, 2006 and that the revenue adjustment was solely a bookkeeping bookkeeping, maintenance of systematic and convenient records of money transactions in order to show the condition of a business enterprise. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. matter. The Company intends to continue its vessel acquisition program to expand its presence in its two current sectors of the tanker market: combination carriers capable of transporting both wet and dry bulk cargoes That which is generally shipped in volume where the transportation conveyance is the only external container; such as liquids, ore, or grain. , and product carriers; however, there can be no assurance that the Company will be able to purchase any of such vessels on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms or at all. The Company's fleet currently consists of six medium range product tankers, six combination carriers and a 50% interest in another and one panamax product carrier. Twelve of the vessels are currently fixed on long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. time charters, which varied in original length of between one and five years. The remaining two vessels are operated in the spot market at this time. We provide EBITDA (earnings before interest expense, taxes, depreciation and amortization) information as a guide to the operating performance of the Company. EBITDA, which is not a term recognized under generally accepted accounting principles, is calculated as net income plus interest expense, income taxes (benefit), depreciation and amortization, and an adjustment for book value gains and losses on the sale of vessels. Included in the depreciation and amortization for the purpose of calculating EBITDA is depreciation of vessels, including capital improvements and amortization of mortgage fees. EBITDA, as calculated by the Company, may not be comparable to calculations of similarly titled items reported by other companies. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Certain statements contained in this press release, including, without limitation, statements containing the words "believes," "anticipates," "expects," "intends," and words of similar import, constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases, regarding the Company's financial and business prospects. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such factors include, but are not limited to, those set forth in the Company's Annual Report and filings with the Securities and Exchange Committee. Given these uncertainties, undue reliance should not be placed on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any of the forward-looking statements contained or incorporation by reference The method of making one document of any kind become a part of another separate document by alluding to the former in the latter and declaring that the former shall be taken and considered as a part of the latter the same as if it were completely set out therein. herein to reflect future events or developments. For further information, including the Company's latest 6-K and press release reporting unaudited 2005 annual earnings and previous announcements, access the Company's website: www.bhocean.com
B+H Ocean Carriers Ltd.
Consolidated Balance Sheets
Unaudited Audited Unaudited
ASSETS March 31, December 31, March 31,
2006 2005 2005
------------- ------------- -------------
CURRENT ASSETS:
Cash and cash equivalents $46,895,665 $60,827,651 $10,400,477
Marketable securities 474,857 567,566 217,472
Trade accounts receivable,
less allowance for doubtful
accounts
of $229,000 and $137,000
in 2006 and 2005,
respectively 1,701,449 2,258,572 996,247
Inventories 1,509,247 855,086 524,994
Prepaid expenses and other
current assets 724,829 1,210,915 611,325
------------- ------------- -------------
Total current assets 51,306,047 65,719,790 12,750,515
------------- ------------- -------------
Vessels, at cost:
Vessels 286,004,104 249,067,385 206,873,197
Less - Accumulated
depreciation (38,492,364) (34,900,653) (33,796,265)
------------- ------------- -------------
247,511,740 214,166,732 173,076,932
------------- ------------- -------------
Investment in Nordan OBO II
Ltd 13,611,453 - -
Other assets 1,509,281 1,536,764 1,292,796
Fair value of derivative
asset 11,204,713 - -
Total assets $325,143,234 $281,423,286 $187,120,243
------------- ------------- -------------
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable $2,993,919 $4,025,919 $5,452,774
Accrued liabilities 2,992,891 1,747,909 3,443,906
Accrued interest 542,371 454,620 554,709
Current portion of mortgage
payable 31,264,000 32,602,000 30,400,000
Deferred income 5,754,462 5,415,416 2,486,109
Other liabilities 292,410 59,836 173,690
------------- ------------- -------------
Total current liabilities 43,840,053 44,305,700 42,511,188
Long term debt 141,998,472 117,063,472 98,165,472
Fair value of derivative
liability 10,321,684 - -
Commitments and contingencies - - -
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par
value; 20,000,000 shares
authorized; no shares
issued and outstanding - - -
Common stock, $0.01 par
value; 30,000,000 shares
authorized; 7,557,268
shares issued, 7,087,785
and 3,908,847 shares
outstanding as of March 31,
2006 and 2005, respectively 75,572 75,572 43,140
Paid-in capital 94,067,440 94,042,310 37,538,669
Retained earnings 38,836,880 29,905,939 11,825,700
Treasury stock (3,996,867) (3,969,707) (2,963,926)
------------- ------------- -------------
Total shareholders'
equity 128,983,025 120,054,114 46,443,583
------------- ------------- -------------
Total liabilities and
shareholders' equity $325,143,234 $281,423,286 $187,120,243
------------- ------------- -------------
B+H Ocean Carriers Ltd.
Unaudited Consolidated Statements of Income
For the three For the three
months ended months ended
March 31, 2006 March 31, 2005
--------------- ----------------
Revenues:
Voyage, time and bareboat charter
revenues $21,627,730 $13,842,012
Other revenue 886,675 -
--------------- ----------------
Total revenues 22,514,405 13,842,012
Operating expenses:
Voyage expenses 1,663,622 2,243,997
Vessel operating expenses, drydocking
and survey costs 6,735,271 5,890,181
Vessel depreciation 3,591,712 2,187,754
Amortization of deferred charges 81,909 32,888
General and administrative:
Management fees to related party 262,741 175,478
Consulting and professional
fees, and other expenses 1,071,168 671,066
--------------- ----------------
Total operating expenses 13,406,423 11,201,364
--------------- ----------------
Income from vessel operations 9,107,982 2,640,648
--------------- ----------------
Other income (expense):
Equity in income of Nordan OBO II 431,810 -
Interest expense (2,123,161) (663,985)
Interest income 505,705 22,541
Gain on trading marketable securities 125,576 19,202
Gain on fair value of interest rate
swap 883,029 -
--------------- ----------------
Total other expenses, net (177,041) (622,242)
--------------- ----------------
Net income $8,930,941 $2,018,406
--------------- ----------------
Basic earnings per common share $1.26 $0.52
--------------- ----------------
Diluted earnings per common share $1.22 $0.49
--------------- ----------------
Weighted average number of common
shares outstanding:
Basic 7,087,785 3,854,145
--------------- ----------------
Diluted 7,315,224 4,139,585
--------------- ----------------
B+H Ocean Carriers Ltd.
Unaudited Consolidated Statements of Cash Flows
For the three For the three
months ended months ended
March 31, 2006 March 31, 2005
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $8,930,941 $2,018,406
Adjustments to reconcile net income to
net cash provided by operating
activities:
Vessel depreciation 3,591,712 2,187,754
Amortization of deferred charges 81,909 32,888
Gain on fair value of marketable
securities (125,576) (19,202)
Gain on fair value of interest rate
swaps (883,029) -
Changes in assets and liabilities:
Decrease in trade accounts
receivable 557,123 4,549,257
(Increase) decrease in inventories (654,161) 245,387
Decrease in prepaid expenses and
other assets 488,845 155,500
(Decrease) increase in accounts
payable (1,032,000) 121,746
Increase in accrued liabilities 1,244,982 1,145,082
Increase in accrued interest 87,751 286,867
(Decrease) increase in deferred
income 339,046 1,186,695
Increase in other liabilities 232,574 97,604
Payments for special surveys (536,719) (1,967,697)
--------------- ---------------
Total adjustments 3,392,457 8,021,881
--------------- ---------------
Net cash provided by operating
activities 12,323,398 10,040,287
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and investment in vessels (3,640,000) (110,200,000)
Investment in Nordan OBO II (13,179,643) -
Increase in marketable securities 218,284 -
Equity in income of Nordan OBO II (431,810)
--------------- ---------------
Net cash used in investing activities (17,033,169) (110,200,000)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for debt issuance costs (56,926) (864,372)
Mortgage proceeds - 102,000,000
Purchase of treasury stock (39,994) -
Issuance of treasury shares 37,705 61,540
Payments of mortgage principal (9,163,000) (2,700,000)
--------------- ---------------
Net cash provided by financing
activities (9,222,215) 98,497,168
--------------- ---------------
Net decrease in cash and cash
equivalents (13,931,986) (1,662,545)
Cash and cash equivalents, beginning of
period 60,827,651 12,063,022
--------------- ---------------
Cash and cash equivalents, end of
period $46,895,665 $10,400,477
--------------- ---------------
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion