ATHENS, GREECE--(Marketwire - April 30, 2010) - Capital Product Partners L.P. (the
"Partnership") (
NASDAQ:
CPLP), an international owner of modern
double-hull tankers, today released its financial results for the first
quarter ended March 31, 2010.
The Partnership's net income for the quarter ended March 31, 2010 was $6.8
million, or $0.25 per limited partnership unit, which is $0.04 higher than
the $0.21 per unit from the previous quarter ended December 31, 2009, and
$0.10 lower than the $0.35 per unit from the first quarter of 2009. The
reported results of operations and cash flows presented below reflect the
consolidation of the M/T Atrotos, which was acquired on March 1, 2010, for
the full quarter, as the transaction was between two entities under common
control.
Operating surplus for the quarter ended March 31, 2010 was $11.7 million,
$1.5 million higher than the $10.2 million from the fourth quarter of 2009
and $0.2 million lower than the $11.9 million from the first quarter of
2009. Operating surplus is a non-GAAP financial measure used by certain
investors to measure the financial performance of the Partnership and other
master limited partnerships. (Please see Appendix A for a reconciliation of
this non-GAAP measure to net income.)
Revenues for the first quarter of 2010 were $31.1 million, compared to
$32.3 million in the first quarter of 2009. The lower revenues generated
reflect the lower charter rates at which we have re-chartered two of the
Partnership's vessels whose original charters expired during the quarter
and lower profit sharing revenues. The Partnership earned $0.4 million in
profit share revenues on the back of a buoyant Suezmax market in January
2010 and from the ice trading of one of the medium range (MR) tankers
chartered to Capital Maritime & Trading Corp., our Sponsor ("Capital
Maritime"), compared to $0.7 million earned in the first quarter of 2009.
Total operating expenses for the first quarter of 2010 were $15.8 million,
including $7.0 million in fees for the commercial and technical management
of the fleet paid to a subsidiary of Capital Maritime, $7.4 million in
depreciation and $0.6 million in general and administrative expenses,
compared to $15.5 million total operating expenses for the first quarter of
2009.
Net interest expense and finance cost for the quarter amounted to $7.9
million compared to $7.3 million for the first quarter of 2009. The
increase in net interest expense and finance cost is primarily due to the
higher interest margin applicable to our loan facilities since June 30,
2009 and to lower cash deposit rates.
As of March 31, 2010 the Partnership's long-term debt remained unchanged
compared to December 31, 2009 at $474.0 million and partners' capital
increased to $195.6 million following the issuance of 5,800,000 additional
common units in February 2010 described further below. Current undrawn debt
facilities amount to $246.0 million subject to compliance with the terms of
our loan facilities.
Market Commentary
Overall, average product tanker spot earnings improved considerably over
the first quarter of 2010 to levels last seen in the first quarter of 2009.
This was due to the boost to refinery margins and to the demand for product
tankers in the western hemisphere from a prolonged cold spell as well as an
improved oil demand on the back of an improving global economy. The period
charter market also saw a slight improvement both in terms of charter rates
and volume of fixtures, as charterers started showing signs of higher
confidence in the market based on the improved spot rates.
The Suezmax market experienced a strong start to the year with earnings
improving considerably, compared to the year end 2009, as strong demand
both in the Atlantic Basin and to the Far East drove rates upwards.
Fleet Developments
On March 1, 2010 the Partnership acquired the M/T Atrotos (renamed M/T El
Pipila) (2007 Hyundai Mipo 47,000 dwt ICE Class 1A) from Capital Maritime
at a purchase price of $43 million. The M/T Atrotos is the Partnership's
sixteenth modern MR tanker, bringing the size of its fleet to 19 vessels
and is chartered to Petróleos Mexicanos (PEMEX), the state-owned Mexican
petroleum company, through Arrendadora Ocean Mexicana, S.A. de C.V., under
a charter expected to expire in March 2014. The net base rate under the
charter is $19,900 per day, which includes a payment to Capital Maritime
for technical management fees. The vessel's total operating expenses are
fixed until the expiration of the charter at a daily rate of $3,575.
The M/T Avax (2007 Hyundai Mipo 47,00 dwt ICE Class 1A) has been
re-chartered with BP Shipping Ltd. for 11-13 months at a net daily rate of
$12,500 including a 50/50 profit sharing arrangement for breaking IWL
commencing on May 5th. The net daily charter rate of the M/T Avax under its
existing charter is $20,500.
The M/T Aristofanis (2005 Baima Shipyard 12,000 dwt), whose charter with
Shell International Trading & Shipping Company Ltd. expired towards the end
of the first quarter of 2010, is expected to be employed in the spot market
following the completion of its scheduled special survey and upgrade to IMO
III type chemical tanker. Her sister vessel, the M/T Attikos, has also been
trading in the spot market since mid January 2010 following completion of
its special survey and upgrade to IMO III type chemical tanker.
Following the rechartering of the M/T Avax, 77% of the fleet total days for
the remainder of 2010, and 45% of the fleet total days in 2011 will be
secured under period charter coverage.
Completion of Offering of 6,281,578 Common Units
On February 23, 2010 the Partnership announced the issuance of 5,800,000
common units at a public offering price of $8.85 per common unit. An
additional 481,578 common units were subsequently sold on the same terms
following the partial exercise of the over-allotment option granted to the
underwriters. Capital GP LLC, the Partnership's general partner,
participated in both the offering and the exercise of the over-allotment
option and purchased an additional 128,195 units at the public offering
price, thereby maintaining its 2 percent interest in the Partnership.
Aggregate proceeds to the Partnership, before expenses relating to the
offering, were approximately $54.1 million. The net proceeds from the
offering were used to acquire the M/T Atrotos (renamed M/T El Pipila) at an
acquisition price of $43 million and for general partnership purposes.
Management Commentary
Mr. Ioannis Lazaridis, Chief Executive and Chief Financial Officer of the
Partnership's general partner commented: "During the first quarter of 2010,
we have observed an improvement in the product tanker market from its multi
year lows. The product tanker industry has seen an overall improvement in
the average spot earnings levels, and slightly higher period rates. We
continue to closely examine key industry factors in order to assess the
market recovery for the remainder of 2010 and 2011. These factors include
changes in oil product demand, oil refinery utilization rates, the
implementation of the single-hull tanker phase out, the availability of
shipping finance, as well as further delays and cancellations that could
reduce the number of new tanker vessel deliveries."
Mr. Lazaridis continued: "We are pleased that the rechartering of the M/T
Avax with BP Shipping Ltd. has further increased the Partnership's charter
coverage for 2010 and 2011 and further developed our relationship with one
of the largest oil majors and product tankers charterers. Lastly, the
acquisition of the M/T Atrotos, through a successful secondary offering,
demonstrates our commitment towards our long-term business strategy of
growth through accretive acquisitions."
Quarterly Cash Distribution
On April 23, 2010, the Board of Directors of the Partnership declared a
cash distribution of $0.225 per unit for the first quarter of 2010, in line
with management's annual guidance as stated in the fourth quarter 2009
earnings press release. The first quarter 2010 distribution will be paid on
May 14, 2010 to unit holders of record on May 6, 2010.
Conference Call and Webcast
Today, Friday, April 30, 2010 at 10:00 am Eastern Time (U.S.) the
Partnership will host an interactive conference call.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329
(from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote
"Capital Product Partners."
A replay of the conference call will be available until May 7, 2010. The
United States replay number is 1(866) 247-4222; the UK replay number is
0(800) 953-1533; the standard international replay number is (+44) (0) 1452
550 000 and the access code required for the replay is: 69648481#.
Slides and audio webcast:
The slide presentation accompanying the conference call will be available
on the Partnership's website at
www.capitalpplp.com. An audio webcast of
the call will also be accessible on the website. The relevant links will be
found in the Investor Relations section of the website.
Forward Looking Statements:
The statements in this press release that are not historical facts,
including our expectations regarding developments in the markets, their
effects and the factors which may contribute to a market recovery, our
expectations regarding the employment of our vessels, our expected charter
coverage ratios for 2010 and 2011 and expectations regarding our quarterly
distribution may be forward-looking statements (as such term is defined in
Section 21E of the Securities Exchange Act of 1934, as amended). These
forward-looking statements involve risks and uncertainties that could cause
the stated or forecasted results to be materially different from those
anticipated. Unless required by law, we expressly disclaim any obligation
to update or revise any of these forward-looking statements, whether
because of future events, new information, a change in our views or
expectations, to conform them to actual results or otherwise. We assume no
responsibility for the accuracy and completeness of the forward-looking
statements. We make no prediction or statement about the performance of our
common units.
About Capital Product Partners L.P.
Capital Product Partners L.P. (
NASDAQ:
CPLP), a Marshall Islands master
limited partnership, is an international owner of modern double-hull
tankers. The Partnership owns 19 vessels, including 16 modern MR tankers,
two small product tankers and one suezmax crude oil tanker. Most of its 19
vessels are under medium- to long-term charters to BP Shipping Limited,
Morgan Stanley Capital Group Inc., Overseas Shipholding Group and Capital
Maritime & Trading Corp.
Capital Product Partners L.P.
Unaudited Condensed Consolidated and Combined Statements of Income (Note 1)
(In thousands of United States Dollars, except number of units and earnings
per unit)
For the three month
period ended March 31,
2010 2009
---------- ----------
Revenues 29,977 32,331
Revenues - related party 1,152 -
---------- ----------
Total Revenues 31,129 32,331
---------- ----------
Expenses:
Voyage expenses 795 286
Vessel operating expenses - related party 7,036 6,503
Vessel operating expenses - 618
General and administrative expenses 630 789
Depreciation 7,363 7,281
---------- ----------
Operating income 15,305 16,854
---------- ----------
Other income (expense), net:
Interest expense and finance cost (8,181) (7,873)
Interest income 320 526
Foreign currency (loss)/gain, net (11) 15
---------- ----------
Total other (expense), net (7,872) (7,332)
---------- ----------
Net income 7,433 9,522
---------- ----------
Less:
Net income attributable to CMTC operations 658 722
---------- ----------
Partnership's net income 6,775 8,800
========== ==========
General Partner's interest in Partnership's net
income $ 136 $ 176
Limited Partners' interest in Partnership's net
income 6,639 8,624
Net income per:
Common units (basic and diluted) 0.25 0.38
Subordinated units (basic and diluted) - 0.22
Total units (basic and diluted) 0.25 0.35
---------- ----------
Weighted-average units outstanding:
Common units (basic and diluted) 27,088,525 20,512,229
Subordinated units (basic and diluted) - 4,304,922
Total units (basic and diluted) 27,088,525 24,817,151
Capital Product Partners L.P.
Unaudited Condensed Consolidated and Combined Balance Sheets (Note 1)
(In thousands of United States Dollars, except number of shares and units)
March 31, December 31,
2010 2009
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 1,321 $ 3,552
Short term investments 43,294 30,390
Trade accounts receivable 1,218 735
Due from related party 66 2,681
Inventory 185 111
Prepayments and other assets 475 522
------------ ------------
Total current assets 46,559 37,991
------------ ------------
Fixed assets
Vessels, net 665,078 672,441
------------ ------------
Total fixed assets 665,078 672,441
------------ ------------
Other non-current assets
Deferred charges, net 2,878 3,095
Restricted cash 4,500 4,500
------------ ------------
Total non-current assets 672,456 680,036
------------ ------------
Total assets $ 719,015 $ 718,027
------------ ------------
Liabilities and Partners' Capital
Current liabilities
Current portion of related party long-term debt $ - $ 2,600
Trade accounts payable 945 296
Due to related parties 4,348 4,939
Accrued liabilities 2,066 2,276
Deferred revenue 1,438 3,458
------------ ------------
Total current liabilities 8,797 13,569
------------ ------------
Long-term liabilities
Long-term debt 474,000 474,000
Long-term related party debt - 23,150
Deferred revenue 2,247 2,062
Derivative instruments 38,412 36,931
------------ ------------
Total long-term liabilities 514,659 536,143
------------ ------------
Total liabilities 523,456 549,712
------------ ------------
Commitments and contingencies - -
------------ ------------
Stockholders' Equity - 11,187
Partners' Capital 195,559 157,128
------------ ------------
Total liabilities and partners' Capital $ 719,015 $ 718,027
------------ ------------
Capital Product Partners L.P.
Unaudited Condensed Consolidated and Combined Statements of Cash Flows
(Note 1)
(In thousands of United States Dollars)
For the three
month period ended
March 31,
2010 2009
Cash flows from operating activities:
Net income $ 7,433 $ 9,522
Adjustments to reconcile net income to net cash
provided by operating activities:
Vessel depreciation and amortization 7,363 7,281
Amortization of deferred charges 137 84
Changes in operating assets and liabilities:
Trade accounts receivable (1,476) 4,704
Due from related parties 159 -
Prepayments and other assets 47 (222)
Inventories (74) (59)
Trade accounts payable 609 471
Due to related parties (591) (136)
Accrued liabilities (815) (28)
Deferred revenue (1,835) (3,322)
-------- --------
Net cash provided by operating activities 10,957 18,295
-------- --------
Cash flows from investing activities:
Vessel acquisitions (33,479) (409)
Purchase of short term investments (41,929) (25,165)
Maturity of short term investments 29,025 8,300
-------- --------
Net cash (used in) investing activities (46,383) (17,274)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of Partnership units 54,075 -
Expenses paid for issuance of Partnership units (332) -
Payments of related party debt/financing (650) (409)
Loan issuance costs 6 (28)
Excess of purchase price over book value of vessels
acquired from entity under common control (9,521) -
Dividends paid (10,383) (29,962)
-------- --------
Net cash provided by (used in) financing activities 33,195 (30,399)
-------- --------
Net (decrease) in cash and cash equivalents (2,231) (29,378)
Cash and cash equivalents at beginning of period 3,552 43,149
-------- --------
Cash and cash equivalents at end of period $ 1,321 $ 13,771
-------- --------
Supplemental Cash Flow information
Cash paid for interest $ 7,836 $ 7,716
Non-cash Activities
Accrued offering expenses 607 -
Payable offering expenses 40 -
Reduction in deferred offering expenses 55 -
Net liabilities assumed by CMTC upon vessel
contribution to the Partnership 21,634 -
Notes
(1) The unaudited condensed consolidated and combined statements of income
and cash flows for the three month period ended March 31, 2010 include the
results of operations of M/T Atrotos which was acquired from Capital
Maritime, an entity under common control, on March 1, 2010 as though the
transfer had occurred at the beginning of the year (January 1, 2010)
The unaudited condensed consolidated and combined statements of income and
cash flows for the three month period ended March 31, 2009 include the
results of operations of M/T Agamemnon II and M/T Ayrton II which were
acquired from Capital Maritime, an entity under common control, on April 7
and April 13, 2009 respectively, as though the transfers had occurred at
the beginning of the earliest period presented (January 1, 2009).
(2) Short term investments consist of cash time deposits with original
maturities of more than three months with de minimis breakage costs.
Capital Product Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measure
(In thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Operating Surplus
Operating Surplus represents net income adjusted for non cash items such as
depreciation and amortization expense, unearned revenue and unrealized gain
and losses. Replacement capital expenditures represent those capital
expenditures required to maintain over the long term the operating capacity
of, or the revenue generated by, the Partnership's capital assets.
Operating Surplus is a quantitative standard used in the publicly-traded
partnership investment community to assist in evaluating a partnership's
ability to make quarterly cash distributions. Operating Surplus is not
required by accounting principles generally accepted in the United States
and should not be considered as an alternative to net income or any other
indicator of the Partnership's performance required by accounting
principles generally accepted in the United States. The tables below
reconcile Operating Surplus to net income for the three month period ended
March 31, 2010.
For the
three-month
Reconciliation of Non-GAAP Financial Measure - period ended
Operating Surplus March 31, 2010
Net income $ 7,433
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization 7,499
Deferred revenue 199
M/T Atrotos net income for the period from January 1, 2010 to
February 28, 2010 (658)
M/T Atrotos depreciation for the period from January 1, 2010
to February 28, 2010 (239)
------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 14,234
------------
Replacement Capital Expenditures 2,513
------------
OPERATING SURPLUS 11,721
------------
Recommended reserves 4,581
------------
AVAILABLE CASH 7,140
------------
Contact Information: For more information about the Partnership, please visit our website:
www.capitalpplp.com.
Contact Details:
Capital GP L.L.C.
Ioannis Lazaridis
CEO and CFO
+30 (210) 4584 950
E-mail: i.lazaridis@capitalpplp.com
Capital Maritime & Trading Corp.
Jerry Kalogiratos
+30 (210) 4584 950
j.kalogiratos@capitalpplp.com
Investor Relations / Media
Matthew Abenante
Capital Link, Inc. (New York)
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com