Yesterday after market close, Excel Maritime Carriers Ltd. (EXM), a global dry bulk carrier, declared mixed financial results for the fourth quarter of 2010. However, in after market trade on NASDAQ, the stock price of Excel Maritime was down 22 cents (4.21%) to $5.0.
GAAP net income in the fourth quarter of 2010 was $63.6 million or 76 cents per share compared with a net income of $81.8 million or $1 per share in the year-ago quarter. However, quarterly adjusted (excluding special-items) EPS of 14 cents was a penny shy of the Zacks Consensus Estimate.
Quarterly total revenue was a little over $158 compared with $186.2 million in the prior-year quarter. This huge reduction was primarily attributable to extremely volatile freight environment of the global drybulk shipping industry.
Nevertheless, Voyage revenue, in the fourth quarter of 2010 was slightly above $107 million, an improvement of 4.3% year over year and also better than the Zacks Consensus Estimate of $101 million. In the reported quarter, Time Charter Equivalent (TCE) per day was $22,440 compared with $22,686 in the prior-year quarter.
Quarterly total operating expenses were nearly $91.4 million, up 2.5% year over year. This was mainly attributable to a 61% increase in Voyage expenses and 9.3% increase in vessel operating expenses, partially offset by a 31.6% decrease in Selling, General and Administrative expenses. Quarterly adjusted EBITDA was $61.9 million, remaining almost flat year over year.
An average of 48.0 Excel Maritime vessels operated during the fourth quarter of 2010 compared with 47.0 in the year-ago quarter. Management announced that the company secured under time charter employment 56% for the fiscal-year ending December 31, 2011.
During fiscal 2010, Excel Maritime generated $158.5 million of cash from operations compared with $147.3 million in fiscal 2009. Free cash flow (cash flow from operations less capital expenditure) in fiscal 2010 was $65.8 million compared with $137.9 million in fiscal 2009.
At the end of fiscal 2010, Excel Maritime had $65.9 million of cash & cash equivalents compared with $100.1 million at the end of fiscal 2009. Total debt, at the end of fiscal 2010 was $1,154 million compared with $1,256.45 million at the end of fiscal 2009. At the end of fiscal 2010, debt-to-capitalization ratio was 0.37 compared with 0.43 at the end of fiscal 2009.
Recommendation
Excel Maritime operates under highly competitive drybulk shipping industry. Its main competitors are Diana Shipping Inc. (DSX), Genco Shipping & Trading Ltd. (GNK), and DryShips Inc. (DRYS). We maintain our long-term Neutral recommendation on Excel Maritime.
However, currently the company holds a short-term Zacks #4 Rank (Sell) for its stock. We believe this was primarily attributable to the stiff reduction of drybulk spot freight rates in the last three months.
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