Navios Maritime Acquisition Corporation Reports Financial Results for the Three and Nine Months Ended September 30, 2010

PIRAEUS, Greece, Nov. 10, 2010 /PRNewswire-FirstCall/ -- Navios Maritime Acquisition Corporation (“Navios Acquisition”) (NYSE: NNA), an owner and operator of tanker vessels, today reported its financial results for the three and nine months ended September 30, 2010.

Ms. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, "We are pleased to announce a dividend for Q3 2010 of $.05 cents a share.  This represents an annual dividend of $.20 per share and a current return of about 3.6% based on yesterday's closing stock price.  Our dividend policy achieves a balance between providing a current return to shareholders and allowing reinvestment of cash flow into the business.  Indeed, we also announced the acquisition of two new build LR1 product tankers.  This transaction, partially funded with mandatorily convertible preferred stock, reflects our continued ability to grow and suggests that our equity is attractive as an acquisition currency."

Ms. Frangou continued, "The third quarter represents the first full quarter of operations, but was burdened by the expenses of the VLCC acquisition.  We closed this transaction in September and only enjoyed a small portion of the VLCC fleet's contracted revenue.  We look forward to a more normalized cash flow in the succeeding quarters."

2010 HIGHLIGHTS — RECENT DEVELOPMENTS

Dividend of $0.05 per share of common stock

The Board of Directors of Navios Acquisition declared a quarterly cash dividend for the third quarter of 2010 of $0.05 per share of common stock.  The dividend is payable on January 12, 2011 to shareholders of record as of December 8, 2010. The declaration and payment of any further dividend remains subject to the discretion of the Board and will depend on, among other things, Navios Acquisitions’ cash requirements as measured by market opportunities and restrictions under its credit agreements.

Acquisition of two new build LR1 product tankers

In October 2010, Navios Acquisition entered into an agreement for the acquisition of two new build LR1 product tankers scheduled to be delivered in the fourth quarter of 2011 from a South Korean shipyard. The acquisition price including the issuance of mandatorily convertible preferred shares, was $82.8 million and will be partially financed with a new credit facility of $52.2 million. The new credit facility that Navios Acquisition has entered into has an amortization profile of 18.9 years and bears an interest of LIBOR plus (i) 250 bps prior to delivery of the vessels and (ii) 275 bps thereafter. The credit facility also requires compliance with certain financial covenants.

Delivery of the chemical tanker vessel Nave Cosmos

On October 27, 2010, Navios Acquisition took delivery of the chemical tanker Nave Cosmos of 25,130 mt from a South Korean shipyard into its owned fleet. The vessel is chartered out for three months with an option for three additional months at a net daily charter rate of $10,238 for the first three months and $12,188 for the optional months.

Extension of Two Existing Purchase Options

The Company announced the extension of the two existing options on two LR1 product tankers. These options were to originally expire in January 2011, but have now been extended through March 2011.

Adjustment of Two LR1 Product Tanker Delivery Dates

The Company announced the adjusted delivery of two LR1 product tankers in the existing fleet. Delivery is now scheduled for H2 2012.

$400.0 million 8 5/8% First Priority Ship Mortgage Notes Due 2017

On October 21, 2010, Navios Acquisition completed the sale of $400.0 million of 8 5/8% First Priority Ship Mortgage notes due 2017 (the "Notes"). The Notes are secured by first priority ship mortgages on six very large crude carrier vessels aggregating approximately 1.8 million deadweight tons owned by certain subsidiary guarantors. The Notes are guaranteed by each of Navios Acquisition's direct and indirect subsidiaries.

The net proceeds of the offering totaling $386.5 million were used to repay borrowings under certain of Navios Acquisition's existing credit facilities and for working capital purposes.

Acquisition of VLCC tanker vessels

On September 10, 2010, Navios Acquisition consummated its acquisition (the “VLCC Acquisition”) of a fleet of seven VLCC tankers for an aggregate purchase price of $587.0 million adjusted for net working capital acquired of $20.1 million.  The acquisition was financed as follows: (a) $410.5 million of bank debt, assumed at closing consisting of six credit facilities with a consortium of banks; (b) $134.3 million of cash paid at closing; (c) $10.7 million through the issuance of 1,894,918 shares of common stock at closing of which 1,378,122 were deposited into a one-year escrow account to provide for indemnity or other claims; and (d) $51.4 million due to a shipyard in 2011 for the new build VLCC scheduled for delivery in June 2011(of which $36.8 million is expected to be drawn down from existing debt facilities entered into in connection with the VLCC Acquisition).

The cash portion of the purchase price paid at closing was financed by: (i) $32.2 million of cash from the balance sheet of the acquired entities; (ii) $40.0 million in short-term financing from Navios Holdings with a margin of LIBOR plus 300 bps and a term of 18 months, maturing on April 1, 2012; and (iii) existing cash resources of Navios Acquisition.

FINANCIAL HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Acquisition has compiled consolidated statement of operations for the three and nine month periods ended September 30, 2010 and 2009. The quarterly 2010 and 2009 information was derived from the unaudited condensed consolidated financial statements for the respective periods.  Adjusted EBITDA and Adjusted Net Income are non-US GAAP financial measures and should not be used in isolation or substitution for Navios Acquisition’s results.

(1) Adjusted EBITDA for the three months ended September 30, 2010, excludes $8.0 million of transaction costs for the VLCC Acquisition.

Adjusted EBITDA for the nine months ended September 30, 2010, excludes $8.0 million of transaction costs for the VLCC Acquisition and $2.1 million of share based compensation.

(2) Adjusted Net Income and Adjusted Earnings per Share for the three and nine months ended September 30, 2010, also exclude the items described above. Adjusted Net Income for the nine months ended September 30, 2010, also excludes the share based compensation of $2.1 million. Adjusted Earnings per Share for the three and nine months ended September 30, 2010 were further adjusted to exclude the incremental fair value of securities offered to induce warrants exercised of ($0.7) million.

Three month periods ended September 30, 2010 and 2009

Revenue for the three month period ended September 30, 2010 was $8.1 million. Following the delivery of the product tanker Ariadne Jacob on July 2, 2010 and the VLCC acquisition on September 10, 2010, Navios Acquisition had 308 available days at a TCE rate of $26,129. There was no revenue in the corresponding period of 2009.

Net Loss for the three month period ended September 30, 2010 amounted to $6.5 million compared to $0.1 income million for the three month period ended September 30, 2009. The $6.5 million loss incurred in the three month period ended September 30, 2010 was due to (a) $2.5 million of management expenses; (b) $8.0 million expenses incurred in connection with the VLCC Acquisition; (c) $2.4 million depreciation and amortization; (d) $1.5 million interest expense and finance cost; and (e) $0.4 million of general and administrative expenses. The $14.8 million expenses were partially offset by $8.1 million revenue following the acquisition of product tanker Ariadne Jacob and the VLCC vessels and $0.3 million interest income.

Adjusted Net Income for the three month period ended September 30, 2010 was $1.5 million and represented net income for the three month period ended September 30, 2010, excluding items such as the transaction costs of $8.0 million incurred in connection with the VLCC Acquisition.

During the three month period ended September 30, 2009, Navios Acquisition had not commenced its operations and the $0.1 million loss was primarily related to $0.2 million of general and administrative expenses offset by $0.1 million of interest income.

Adjusted EBITDA for the three month period ended September 30, 2010 was $5.1 million as result of the $ 8.1 million revenue from vessel operations which was partially offset by: (a) $2.5 million management fees; (b) $0.1 million voyage expenses and (c) $0.4 million general and administrative expenses.

Nine month periods ended September 30, 2010 and 2009

Revenue for the nine month period ended September 30, 2010 was $8.1 million.  Following the VLCC Acquisition and the acquisitions of the Collin Jacob in June 2010 and the Ariadne Jacob in July 2010, Navios Acquisition had 309 available days at a TCE of $26,084 for the nine month period ended September 30, 2010. There was no revenue in the corresponding period of 2009.

Net Loss for the nine month period ended September 30, 2010 amounted to $9.1 million compared to $0.5 million for the nine month period ended September 30, 2009. The $9.1 million loss incurred in the nine month period ended September 30, 2010 was due to: (a) $2.5 million of management expenses; (b) $8.0 million expenses incurred in connection with the VLCC Acquisition; (c) $2.1 million of share based compensation; (d) $2.4 million depreciation and amortization; (e) $1.8 million interest expense and finance cost; and (e) $1.0 million of general and administrative expenses. The $17.8 million expenses were partially offset by $8.1 million revenue following the VLCC Acquisition and the acquisition of the product tanker Ariadne Jacob and $0.6 million interest income.

Adjusted Net Income for the nine month period ended September 30, 2010 was $1.0 million and represents net income for the nine month period ended September 30, 2010, excluding items such as the transaction costs of $8.0 million incurred in connection with the VLCC Acquisition and the share based compensation of $2.1 million.

During the nine month period ended September 30, 2009, Navios Acquisition had not commenced its operations and the $0.5 million loss was primarily related to $0.8 million of general and administrative expenses offset by $0.3 million of interest income.

Adjusted EBITDA for the nine month period ended September 30, 2010 was $4.6 million as result of $ 8.1 million revenue from vessel operations which was partially offset by: (a) $2.5 million management fees; (b) $0.1 million voyage expenses and (c) $0.9 million general and administrative expenses.

Time Charter Coverage

As of November 10, 2010, Navios Acquisition had contracted 95.6%, 81.3%, and 57.4% of its available days on a charter-out basis for 2010, 2011 and 2012, respectively, equivalent to $33.2 million, $107.4 million and $116.1 million of revenue, respectively. The average contractual daily charter-out rate for the core fleet is $30,087, $34,187 and $35,231 for 2010, 2011 and 2012, respectively

Fleet Employment Profile

The following table reflects certain key indicators indicative of the performance of Navios Acquisition and its core fleet performance for the three and nine month periods ended September 30, 2010.

(1) Available days: Available days is the total number of days a vessel is controlled by a company less the aggregate number of days that the vessel is off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. 

(2) Operating days: Operating days is the number of available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including lack of demand or unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. 

(3) Fleet utilization: Fleet utilization is obtained by dividing the number of operating days during a period by the number of available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.  

(4) Time Charter Equivalent: Time Charter Equivalent is defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts, while charter hire rates for vessels on time charters generally are expressed in such amounts.

Conference Call, Webcast and Presentation Details:

As previously announced, Navios Acquisition will host a conference call today, Wednesday, November 10, 2010 at 8:30 am ET, at which time Navios Acquisition's senior management will provide highlights and commentary on third quarter 2010 financial results.

About Navios Acquisition

Navios Acquisition (NYSE: NNA) is an owner and operator of tanker vessels focusing in the transportation of petroleum products (clean and dirty) and bulk liquid chemicals.

For more information about Navios Acquisition, please visit our website: http://www.navios-acquisition.com.

Forward Looking Statements

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios Acquisition’s growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. Although Navios Acquisition believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Acquisition. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for product and chemical tanker vessels, competitive factors in the market in which Navios Acquisition operates; risks associated with operations outside the United States; and other factors listed from time to time in the Navios Acquisition’s filings with the Securities and Exchange Commission. Navios Acquisition expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Acquisition’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Disclosure of Non−GAAP Financial Measures

EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes, if any, unless otherwise stated. EBITDA is included because it is used by certain investors to measure a company's financial performance. EBITDA is a "non−GAAP financial measure" and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

EBITDA is presented to provide additional information with respect to Navios Acquisitions' ability to satisfy its obligations including debt service, capital expenditures, working capital requirements and payment of dividends. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.

SOURCE Navios Maritime Acquisition Corporation