Company Declares Cash Dividend of $0.56 Per Share HAMILTON,
Bermuda, July 22 /PRNewswire-FirstCall/ -- Arlington Tankers Ltd.
(NYSE:ATB) today announced financial results for the second quarter
ended June 30, 2008. For the quarter ended June 30, 2008, the
Company's total revenues were $17.4 million, consisting of $16.5
million in basic vessel charter hire and $900,000 in additional
charter hire that the Company received under its profit sharing
arrangements. On the basis of the second quarter results,
Arlington's Board of Directors has declared a cash dividend of
$0.56 per share. The dividend is payable on August 5, 2008 to
shareholders of record at the close of business on August 1, 2008.
Second Quarter Results The additional charter hire earned during
the second quarter of 2008 was derived from profit sharing
arrangements under the time charters of the Company's V-MAX,
Panamax and Product tankers. Of the $900,000 in additional charter
hire, $600,000 was attributed to profit sharing for the two V-MAX
vessels. The remaining $300,000 was attributed to additional
charter hire from the Company's two Panamax tankers and the
Company's two Product tankers that are currently eligible to earn
additional hire. For these four vessels, the average time charter
equivalent rates under the Company's profit sharing agreements over
the preceding twelve months were in excess of contractual minimum
levels. The Company's operating expenses during the second quarter
of 2008, including depreciation costs of $3.8 million and
administrative expenses of approximately $834,000 were $9.9
million. The Company's interest expense, net of interest income for
the second quarter of 2008, was $3.3 million. This expense
represents interest under the Company's $229.5 million, secured
credit facility with The Royal Bank of Scotland plc. The Company's
net income for the second quarter of 2008 was increased by an
unrealized gain of approximately $7.3 million, representing the
change in the fair value of the Company's interest rate swap
arrangement related to its secured credit facility with The Royal
Bank of Scotland plc. As a result, the Company's net income for the
second quarter of 2008 was $11.5 million, or $0.74 per share.
Excluding the effect of the unrealized gain on the interest rate
swap, the Company's net income for the second quarter of 2008 was
$4.2 million, or $0.27 per share. Business Update All of
Arlington's eight vessels are currently trading on time charter
contracts to subsidiaries of Stena AB and Concordia Maritime AB.
The charters have terms that expire at various dates, with the
charters for four vessels expiring in 2009, the charters for two
vessels expiring in 2010 and the charters for two vessels expiring
in 2011. All of the charter contracts also include options to
extend the terms of the charters. During the second quarter of
2008, the Company announced that Stena had exercised the first of
its three one-year options for the Stena Companion and Stena
Concord, and its 30-month options for the Stena Contest and Stena
Concept. Each charter contract provides for fixed-rate basic
charter hire during the operating period. In addition to the
fixed-rate basic charter hire, the Company's two V-MAX vessels, two
Panamax tankers and two of the Company's four Product tankers
currently have the possibility of receiving additional charter hire
from the time charterers through profit sharing arrangements
related to the performance of the tanker markets on specified
geographic routes, or from actual time charter rates. As a result
of Stena's exercise of the option to extend the charters for the
Stena Contest and Stena Concept, these vessels will have the
possibility of receiving additional charter hire during the
30-month period from January 5, 2009 through July 4, 2011. Tanker
freight rates are volatile and additional charter hire for the
Panamax and Product tankers is not guaranteed. The Company's two
V-MAX vessels are receiving additional hire from the time
charterers through profit sharing arrangements based on
sub-charters with Sun International and Eiger Shipping, SA, an
affiliate of the shipping branch of LukOil International Trading
and Supply Company. "We are very pleased with overall results for
the second quarter of 2008. Arlington has consistently delivered on
its dividend guidance and our profit sharing arrangements generated
positive cash flows for dividend distribution for the fifteenth
consecutive quarter since we commenced operations in 2004," said
Edward Terino, Chief Executive Officer, President and Chief
Financial Officer of Arlington. Dividend Policy Arlington has paid
quarterly cash dividends in amounts substantially equal to the
charter hire revenues received, less cash expenses and any cash
reserves established by the Company's Board of Directors. The
Company estimates the amount of cash available for dividends for
fiscal 2008 to be approximately $2.23 per share. The 2008 full year
guidance does not reflect any future additional hire revenues that
the Company may receive from the profit sharing arrangements for
its two Panamax and two eligible Product tankers in 2008. However,
the estimate for 2008 does include all additional hire revenues
earned in the first and second quarters of 2008, and additional
hire expected to be earned during the remainder of 2008 from the
sub-charters of the Company's V-MAX vessels to Sun International
and Eiger Shipping, SA. The Company's forward-looking guidance for
its cash dividends is based on the basic charter hire for all of
the vessels and estimated additional hire from profit sharing
arrangements for the Company's V-MAX vessels while they are
sub-chartered to Sun International and Eiger Shipping, SA. Since
additional hire revenues from profit sharing arrangements for the
Company's two Panamax tankers and the two Product tankers that are
currently eligible for profit sharing are based on spot market
rates which are volatile, the Company does not provide any
forward-looking estimate of additional hire related to these
vessels in its guidance. The Company expects to announce its next
dividend on October 21, 2008 and to pay that dividend on or about
November 4, 2008. Use of Non-GAAP Financial Measures This press
release includes a presentation of a non-GAAP financial measure of
net income excluding the effect of an unrealized gain or loss
representing the change in the fair value of the Company's interest
rate swap arrangement related to its secured credit facility with
The Royal Bank of Scotland plc., which effectively fixes the
interest rate of the Company's debt. The Company's management
believes that this non-GAAP financial measure provides useful
information to investors because it excludes the effects of
unrealized gains and losses, which are non-cash items that may
change from quarter to quarter. Management believes that the
unrealized gains and losses in the fair value of the Company's
interest rate swap arrangement related to its secured credit
facility with The Royal Bank of Scotland plc. are not necessarily
representative of underlying trends in the Company's performance
and their exclusion provides individuals with additional
information to compare the Company's results over multiple periods.
The Company uses this non-GAAP financial measure internally to
focus management on period-to-period changes in the Company's core
business. In accordance with the requirements of Regulation G
issued by the Securities and Exchange Commission, the table below
presents the most directly comparable GAAP financial measure and
reconciles the non-GAAP financial measure described above to GAAP
net income. Arlington Tankers Ltd. (In thousands, except per share
data) Three Months Six Months Ended June 30, Ended June 30, 2008
2007 2008 2007 Net income (GAAP) $11,515 $8,534 $9,037 $12,384
Unrealized (gain) on interest rate swap ($7,284) ($3,408) ($170)
($2,331) Net income (non-GAAP) $4,231 $5,126 $8,867 $10,053 Basic
and diluted net income per share: GAAP $0.74 $0.55 $0.58 $0.80
Non-GAAP $0.27 $0.33 $0.57 $0.65 Shares used in per share
calculations: Basic and diluted 15,500,000 15,500,000 15,500,000
15,500,000 About Arlington Tankers Arlington Tankers Ltd. is an
international, seaborne transporter of crude oil and petroleum
products. Arlington's fleet consists exclusively of eight, modern
double-hulled vessels and is one of the youngest tanker fleets in
the world, with an average vessel age of approximately 4.7 years.
The fleet consists of two V-MAX tankers, which are specially
designed very large crude carriers, two Panamax tankers and four
Product tankers. All of the Company's vessels are employed on
long-term time charters. The Company was incorporated in Bermuda in
September 2004. The Company completed its initial public offering
on the New York Stock Exchange on November 10, 2004. Safe Harbor
Statement This press release contains certain forward-looking
statements and information relating to the Company that are based
on beliefs of the Company's management as well as assumptions made
by the Company and information currently available to the Company,
in particular the statements regarding the Company's expectations
as to the declaration, payment and estimated amount of future
dividends, the market rates which pertain to the Company's spot
trading vessels, additional hire that may be earned in the future,
and the exercise by the charterers of options to extend the terms
of the charters of certain of the Company's vessels. When used in
this press release, words such as "believe," "intend,"
"anticipate," "estimate," "project," "forecast," "plan,"
"potential," "will," "may," "should," and "expect" and similar
expressions are intended to identify forward-looking statements but
are not the exclusive means of identifying such statements. All
statements in this document that are not statements of historical
fact are forward-looking statements. The forward-looking statements
contained in this press release reflect the Company's current views
with respect to future events and are subject to certain risks,
uncertainties and assumptions. Many important factors could cause
the Company's actual results, performance or achievements to be
materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, including, among others: the
possibility that the Company may not pay dividends, the possibility
that the Company's strategic alternatives analysis may not result
in the Company entering into a transaction, the possibility that
any transaction entered into may not be consummated, the highly
cyclical nature of the tanker industry, global demand for oil and
oil products, the number of newbuilding deliveries and the
scrapping rate of older vessels, terrorist attacks and
international hostilities, and compliance costs with environmental
laws and regulations. These and other risks are described in
greater detail in the "Risk Factors" section of the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008,
filed with the United States Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those described in the forward-looking
statements included in this press release. The Company does not
intend, and does not assume any obligation, to update these
forward-looking statements. Contact: Arlington Tankers Ltd. Edward
Terino, President, Chief Executive Officer and Chief Financial
Officer 203-221-2765 Arlington Tankers Ltd. Condensed Consolidated
Statement of Operations (In thousands, except per share data)
(Unaudited) Three Three Six Six Months Months Months Months June
30, June 30, June 30, June 30, 2008 2007 2008 2007 Revenue $17,439
$17,775 $34,996 $35,117 Operating expenses: Vessel operating
expenses 5,179 5,014 10,430 9,965 Depreciation 3,848 3,819 7,610
7,595 Administrative expenses 834 614 1,457 1,142 Total operating
expenses 9,861 9,447 19,497 18,702 Operating income 7,578 8,328
15,499 16,416 Other income (expenses): Interest income 67 213 197
429 Interest expense (3,414) (3,415) (6,829) (6,792) Unrealized
gain on interest rate swap 7,284 3,408 170 2,331 Other income
(expenses), net 3,937 206 (6,462) (4,032) Net income $11,515 $8,534
$9,037 $12,384 Net income per share $0.74 $0.55 $0.58 $0.80
Weighted average shares outstanding 15,500,000 15,500,000
15,500,000 15,500,000 Arlington Tankers Ltd. Condensed Consolidated
Balance Sheets (In thousands) June 30, 2008 Dec. 31, 2007 Assets
(Unaudited) Current assets: Cash and cash equivalents $12,375
$6,274 Short-term investments -- 12,500 Accounts receivable 908 304
Prepaid expenses and accrued income 134 184 Total current assets
13,417 19,262 Vessels, net 321,720 329,330 Deferred debt issuance
costs 598 717 Total assets $335,735 $349,309 Liabilities and
Shareholders' Equity Current liabilities: Accrued expenses $1,063
$451 Unearned revenue -- 5,693 Total current liabilities 1,063
6,144 Interest rate swap agreement at fair value 7,283 7,453 Long
term debt 229,500 229,500 Total liabilities 237,846 243,097
Shareholders' equity 97,889 106,212 Total liabilities and
shareholders' equity $335,735 $349,309 DATASOURCE: Arlington
Tankers Ltd. CONTACT: Edward Terino, President, Chief Executive
Officer and Chief Financial Officer of Arlington Tankers Ltd.,
+1-203-221-2765
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