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Commission File No.
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 1999
ENTERPRISES SHIPHOLDING CORPORATION
(Translation of registrant's name into English)
c/o Enterprises Shipping & Trading S.A.
Poseidonos Avenue 11
Elliniko GR-16777
Athens, Greece
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing
the information to the commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes No X
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Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto is a copy of the quarterly report of
Enterprises Shipholding Corporation (the "Company") for the
period ended March 31, 1999.
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Athens 14th May 1999
TO THE NOTEHOLDERS OF ENTERPRISES SHIPHOLDING CORPORATION:
Enclosed is the unaudited financial information accompanied by a
Management's Discussion and Analysis of Financial Condition and
Results of Operations for the period ended March 31, 1999.
During the first quarter of 1999 the reefer industry was faced
with the consequences of the market conditions and the weather
disturbances that had affected the reefer industry during 1998.
Our projections for a gloomy and uncertain future were
reconfirmed. The spot freight rates ranged from $0.28 per cubic
feet during January to $0.90 per cubic feet for March. Those
rates are approximately 44% and 18% below the rates of January
and March 1998. In the first quarter 12 vessels of our fleet were
trading in the spot market having an average utilization rate of
54% with an average freight rate of $0.36 per cubic feet
contributing only $2 million of EBITDA compared to last year's
86% utilization rate of 5 vessels that were trading in the spot
market with an average freight rate of $0.54 per cubic feet The
outlook of the spot market during the third and fourth quarter
remains very sluggish and as such we have decided to lay-up all
our vessels trading in the spot market due to the low levels of
the freight market. The remaining 14 vessels are on a period time
charter with an average rate of $0.57 per cubic feet calculated
on a monthly basis up to each vessel's existing charter
expiration.
We have initiated our scrapping program and during the first
quarter of 1999 we sold two vessels built 1969 and 1972 realizing
around $0.9 million of net proceeds. The current average age of
the fleet is 17 years. Depending on the market conditions and
price levels we will continue the scrapping of the older tonnage.
The newbuilding program is on schedule and the first vessel, upon
its delivery, has been chartered at current market rates.
For the three months ending March 31, 1999, the Company's
revenues were $16 million, EBITDA was $7.3 million and net income
was $0.0 million. While we had anticipated lower figures from
last year's results, they were unexpected, due to worse than
anticipated market conditions which led to unsatisfactory
performance of the vessels trading in the spot market.
A conference call with Mr. Victor Restis, President and Chief
Executive Officer, and Mr. Kostas Koutsoubelis, Director and
Chief Financial Officer, has been scheduled for Wednesday 19th of
May 1999 at 9:30 am New York time to discuss the first quarter
1999 results.
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To participate in the conference call please dial the number
(212) 346-7484.
We are pleased to answer any inquiries that you may have. Our
investor relations contact is: Kostas Koutsoubelis, Tel:
Int+301+8945061 and Fax: Int+301+8983595
Sincerely yours,
Victor Restis
President and
Chief Executive Officer
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company is one of the world's leading independent owners
and operators of reefer vessels with a fleet of 24 vessels,
including 22 reefer vessels and two high reefer intake container
vessels, and has on order 2 combined container reefer vessels and
5 high reefer intake containers vessels. The following discussion
presents financial information for the Company and its
subsidiaries on a consolidated basis for all periods presented.
The Company acquired such subsidiaries in October 1997 (the
"Combination") in an exchange of stock transaction. Subsequent to
the Combination, the financial statements of the Company were
restated to reflect the consolidation of all companies.
The Company's fleet currently consists of 24 vessels: (i) 22
reefer vessels ranging in size from approximately 200,000 to
600,000 cu.ft. of cargo capacity, including two modern reefer
vessels each with 427,806 cu.ft. of capacity delivered from their
builder in the first half of 1996; and (ii) two reefer container
vessels, each with a cargo capacity of 324 TEU. The following
table sets forth changes in the Company's fleet from December 31,
1994 through March 31, 1999.
YEAR ENDED DECEMBER 31, MARCH 31
_________________________________________________
1994 1995 1996 1997 1998 1999
_________________________________________________
Fleet owned at beginning
of period 15 17 20 24 26 26
Newbuildings and other
acquisitions during
period 2 3 4 2 0 0
Sales and dispositions
during period 0 0 0 0 0 2
Fleet owned at end of
period 17 20 24 26 26 24
Newbuildings on order 0 0 0 0 7 7
Reefer Cargo Capacity
(at end of period)
(millions cft.) 7.5 8.8 10.3 10.3 10.3 9.5
TEU Capacity (at end
of period) 0 0 0 648 648 648
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Reefer shipping is a highly specialized segment of the global
shipping industry that provides seaborne transportation of
perishable commodities, such as bananas, other fruits, meat,
seafood, vegetables and dairy products, in a temperature
controlled environment. The reefer industry is comprised of
approximately 20 leading participants and numerous medium to
small reefer fleet owners and operators.
Reefer vessels are employed under time charters, voyage
charters, contracts of affreightment ("COAs"), and bareboat (or
demise) charters. Reefer vessels that operate in a pool are
generally time chartered to the pool by the owner and the pools
secure employment for the vessels they control through a
combination of COAs, voyage charters and time charters with other
operators or end-users.
The reefer vessel industry is characterized by cyclical
changes in supply and demand, resulting in wide swings in charter
rates and vessel utilization and, consequently, in profitability
for reefer vessel owners and operators. The supply of reefer
vessel cargo carrying capacity is a function of the number and
size of new vessels built and older vessels scrapped. The demand
for reefer vessel capacity reflects several variables, including
the size of fruit harvests, import quotas, the impact of general
economic conditions on consumer demand, and trends in worldwide
consumption and prices for reefer commodities. When growth in
demand exceeds the current or anticipated carrying capacity of
worldwide supply, charter rates generally increase. When charter
rates reach sufficiently high levels, the scrapping rate of older
vessels declines and orders for newbuildings increase. Once
commissioned, a newbuilding generally takes 18 months to 24
months to be built.
Recent trends in reefer vessel charter rates are as follows:
The average time charter rate for quality, midsize, pallet-
friendly reefer vessels more than doubled from $0.41 per cu.ft.
in 1985 to $0.85 per cu.ft. in 1991. The steady increase in
freight rates resulted in relatively heavy investment in cargo
capacity during this period, with worldwide reefer capacity (over
100,000 cu.ft.) growing by approximately 34% between 1986 and
1993. By 1993, reefer vessel cargo carrying capacity had
increased at a greater rate than reefer vessel shipping volumes.
Shipping volumes were adversely affected in late 1992 and 1993 by
the size of various fruit harvests, the European Union quota on
"dollar" bananas grown in Central America, and recessionary
conditions in various importing countries. Accordingly, time
charter rates for older, pallet-friendly vessels declined to
approximately $0.50 in 1993, a 41.2% decline from the peak in
1991. As a result of the decline in freight rates, scrapping of
older vessels increased and the construction of newbuildings
decreased, thereby causing a decline in the supply of cargo
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carrying capacity. Charter rates began to improve in 1994 as a
result of the decline in supply capacity along with the increased
cargo shipping demand. According to Klaveness reports average
rates for older, pallet-friendly vessels increased to
approximately $0.53 in 1994, $0.60 in 1995 and to $0.67 in 1996,
but declined to $0.65 in 1997 and to $0.65 in 1998. Spot rates
for the first six months of 1998 have ranged between $0.50 in
January to a high of $1.10 in March to a low of $0.25 in June
compared to $ 0.50 in January of 1997, to a high of $1.30 in
March and April to a low of $0.50 in June of 1997. On the
contrary spot rates during the first three months of 1999 were $
$0.28 in January, $0.55 in February and $0.90 in March. These
spot rates were 44% and 18% below the rates of January and March
1998.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated,
selected operating data as a percent of net revenue:
YEAR ENDED DECEMBER 31, MARCH 31
_________________________________________________
1994 1995 1996 1997 1998 1999
_________________________________________________
Revenue from vessels,
net 100% 100% 100% 100% 100% 100%
Voyage and running
expenses 36.5 39.4 41.6 40.0 37.5 47.4
Depreciation and
amortization 19.0 20.4 16.8 18.3 20.7 23.4
General and
administrative
expenses 4.3 4.1 3.9 4.3 7.4 8.2
Income from
operations 40.3 36.1 37.7 37.4 34.4 21.0
Interest expense,
net 3.7 3.9 4.2 3.51 3.5 19.9
Loss (gain) on sale
of vessels 0.0 0.0 0.0 (7.9) 0.0 0.0
Other expenses
(income) (1.0) 0.6 (0.7) (2.2) 0.0 0.6
Minority interest 0.6 0.0 0.0 0.0 0.0 0.0
Net income 37.0 31.6 34.2 44.1 21.9 0.5
REVENUE FROM VESSELS, NET. Revenues are generated primarily
From U.S. Dollar denominated charter hire payments under time
charters, COAs or voyage charters to independent reefer
operators, reefer pool operators and integrated multinational
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fruit companies. Revenues from vessels are presented net of
shipbrokers' commissions. Historically, substantially all of the
Company's time charters have been for periods of 12 months or
more. During the past three years, revenues from time charters of
12 months or longer represented 86% of the Company's net revenues
while for 1998 revenues from time charters represented 92% of the
Company's net revenues compared to 84% during 1997. Depending on
market conditions, the Company also charters out its vessels on
COAs, and in the spot market on voyage charters. In 1996 and
1997, the Company derived 22% and 16% of its net revenues from
COAs and spot market voyage charters, respectively. For 1998, the
Company's share of revenues from spot charters was only 8% due to
shortfall in spot market demand resulting from the effects of the
El Nino phenomenon and the financial crisis in various countries.
In the first quarter of 1999 revenues from time charter
represented 70% of the Company's revenues reflecting the market
conditions and the unwillingness of the charterers to commit to
period charters.
The Company's aggregate revenues are a function of the
average freight rate that it earns per vessel per day and the
total number of vessel days the fleet is in operation. The
following table summarizes the Company's average revenue per
vessel per day and total operating days:
Year Ended December 31,
_________________________________________________
MARCH 31
1994 1995 1996 1997 1998 1999
_________________________________________________
Average revenue per
vessel per day $8,169 $8,418 $10,086 $10,555 $ 9,319 $ 9,040
Percentage increase
(decrease) - 3.0% 19.8% 4.7% (11.7)% (3.0)%
Total operating
days 5,625 6,037 7,777 7,492 7,666 1815
Percentage increase - 7.3% 28.8% (3.7)% 2.3% NA
VOYAGE AND RUNNING EXPENSES. Voyage and running expenses
include costs of crewing, spares and stores, insurance premiums,
lubricants, repairs and maintenance, and victualling. The time
charterer, subject to certain adjustments pays bunkers and port
expenses for vessels under time charters. Bunkers and port
expenses for vessels under voyage charters and COAs are paid by
the vessel owner and are included in voyage expenses. The
following table sets forth the Company's average voyage and
running expenses per vessel per day:
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Year Ended December 31,
_________________________________________________
MARCH 31
1994 1995 1996 1997 1998 1999
_________________________________________________
Average operating
expenses per vessel
per day $2,791 $3,002 $3,989 $3,437 $ 2,824 $ 3,324
Percentage increase
(decrease) - 7.5% 32.9% (13.8)% (17.8)% 17.7%
GENERAL AND ADMINISTRATIVE EXPENSES. General and
administrative expenses include management fees of $500 per day
per vessel paid to EST for technical management, headquarters
expense, office staff and the expense of administrative, legal,
quality assurance, information systems and centralized accounting
support functions. Such fees are reduced to $300 per day per
vessel when the vessel is in lay-up condition.
DEPRECIATION AND AMORTIZATION. The Company depreciates its
vessels on a straight-line basis over an estimated useful life of
25 years. For secondhand vessels, the Company depreciates vessel
acquisition costs on a straight-line basis over the balance of
such vessel's useful life of 25 years. Amortization includes dry
docking costs of the vessels, which are carried out approximately
every two and one-half years. These costs are deferred and
amortized through the next dry docking period. Legal costs and
financing fees incurred in connection with the financing of a
vessel are also deferred and amortized over the loans' repayment
period. Costs relating to loans that are repaid are expensed in
the period of repayment.
THREE MONTHS ENDED MARCH 31, 1999, COMPARED WITH THREE MONTHS
ENDED MARCH 31, 1998
REVENUE FROM VESSELS, NET. Revenue from vessels, net,
decreased $3.6 million to $16.4 million in the first quarter of
1999, compared to $20 million in the relevant quarter in 1998,
representing a 20 % decrease. Average daily revenue per vessel
decreased to $9,040 in the first three months of 1999 from $9,347
in the first three months of 1998, representing a 3.3% decrease.
Operating days decreased to 1815 days in the first quarter of
1999 from 2144 days in the first quarter of 1998, representing an
15.3% decrease. The reason for the decrease in revenues was that
the vessels operating in the spot market were directly affected
by the low spot rates and fewer voyage days due to increased idle
time. In the first quarter of 1999 12 vessels were in the spot
market operating 588 days out of the 1080 available days with an
average rate of $0.36 per cubic feet compared to the first
quarter of 1998 where 5 vessels were in the spot market operating
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386 days out of the 450 available days with an average rate of
$0.54. Consequently, revenues from time charters in the first
quarter of 1999 were $11.5 million and $4.9 million from the
voyage charters compared to $17.1 million and $2.9 million
respectively for the first quarter of 1998.
VOYAGE AND RUNNING EXPENSES. Voyage and running expenses
increased by $0.6 million, to $7.8 million in the first quarter
of 1999 from $7.2 million in the first quarter of 1998. As a
percentage of revenues, voyage and running expenses increased to
47.4% in the first three months of 1999 compared to 35.9% in the
first three moths of 1998. The increase of $0.6 million was
mainly due to the fact that more vessels operated under voyage
charters which meant that bunkers, port dues and other expenses
were paid by us. Voyage expenses were $1.8 million and $1.2
million in the first three months of 1999 and 1998, respectively.
GENERAL AND ADMINISTRATIVE EXPENSES. General and
administrative expenses increased by $0.2 million to $1.3 million
in the first three months of 1999 compared to $1.1 million in the
first three months of 1998. This increase was due to the new
compensation of the Directors, which was effective from 1st
September 1998.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization
increased by $0.2 million to $3.8 million in the first three
months of 1999 from $3.6 million in the first three months of
1998. This increase was due to the new depreciation of the
vessel Bolivar that was rebuilt after the accident the vessel
suffered during the fourth quarter of 1997.
INTEREST EXPENSE, NET. Interest expense, net, increased by
$2.5 million, to $3.3 million in the first quarter of 1999 from
$0.7 million in the first quarter of 1998. This increase was
primarily due to the interest of $3.9 million on the Company's
Senior Notes from January 1 to March 31, 1999. Interest income
in the first quarter of 1999 and in 1998 was $0.7 million and
$0.3 million, respectively.
NET INCOME. Net income decreased by $7.2 million, to $0.1
million in the first quarter of 1999 from $7.3 million in the
first quarter of 1998. As a percentage of revenues, net income
decreased to 0.5% in the first quarter of 1999 from 36.2% in the
first quarter of 1998. This decrease of $7.2 was mainly due to
the decrease of net revenues by $3.6 million due to the low spot
market freight rates, increase in the Company's net interest
expense by $2.6 million due to the higher interest cost of the
Senior Notes, and increased voyage and running expenses of $0.6
million resulting from spot voyages.
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YEAR ENDED DECEMBER 31, 1998, COMPARED WITH YEAR ENDED
DECEMBER 31, 1997
REVENUE FROM VESSELS, NET. Revenue from vessels, net,
decreased $7.3 million to $71.4 million in 1998, compared to $79
million in 1997, representing a 9.2% decrease. Average daily
revenue per vessel decreased to $9,319 in 1998 from $10,555 in
1997, representing an 11.7% decrease. Operating days increased
to 7,666 days in 1998 from 7,492 days in 1997, representing a
2.3% increase. The reason for the decrease in revenues was that
the vessels operating in the spot market were directly affected
by lower spot rates and by the lack of additional cargoes, as
banana crops were destroyed by heavy rainfalls and floods caused
by the El Nino phenomenon. Even though the total fleet operating
days increased in 1998 compared to 1997 the vessels that were in
the spot market operated only 422 days in the first six months of
1998 compared to 633 days for the same period of 1997, while
during the third and fourth quarter of 1998 they were in lay-up.
Consequently, revenues from time charters in 1998 were $65.8
million and $5.6 million from the voyage charters.
VOYAGE AND RUNNING EXPENSES. Voyage and running expenses
decreased by $4.8 million, to $26.8 million in 1998 from $31.6
million in 1997. As a percentage of revenues, voyage and running
expenses decreased to 37.5% in 1998 compared to 40% in 1997. The
decrease of $4.8 million was partially due to the fact that the
vessels in voyage charters operated fewer days and thus concluded
fewer voyages, which means that bunkers, port dues and other
expenses were reduced significantly. Voyage expenses were $2.7
million and $4.6 million in 1998 and 1997, respectively. Due to
the continuous preventive maintenance that the Company is
enforcing in its vessels the running expenses decreased by $2.8
million dollars in 1998.
GENERAL AND ADMINISTRATIVE EXPENSES. General and
administrative expenses increased by $1.8 million to $5.3 million
in 1998 compared to $3.4 million in 1997. This increase was due
primarily to the new management fee of $500 per day per vessel
based on the new management agreement with EST that was put into
effect as of January 1, 1998. For the previous year the
management fee was $350 per day per vessel. The fees are reduced
to $300 per day per vessel when a vessel is in lay-up. During
1998 the fleet had 1637 lay-up days out of 9360 days of operating
availability compared to 1485 lay-up days out of 9160 days of
operating availability in 1997.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization
increased by $0.4 million to $14.8 million in 1998 from $14.4
million in 1997. This increase was due to the write-off of loan
expenses due to prepayment of the related loan from the proceeds
of the Company's Senior Notes offering as well as the
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amortization of the legal expenses in relation to the Senior
Notes offering.
INTEREST EXPENSE, NET. Interest expense, net, increased by
$6.8 million, to $9.6 million in 1998 from $2.8 million in 1997.
This increase was primarily due to the interest of $10.5 million
on the Company's Senior Notes from April 27 to December 31, 1998.
Interest expense in 1998 and in 1997 was $12 million and $4.6
million, respectively; interest expense on bank loans was $4.6
million and $1.4 million in 1997 and 1998, respectively.
Interest income in 1998 and in 1997 was $2.8 million and $1.8
million, respectively. The increase in the interest income was
due to the high cash balances that the Company had from the
proceeds of the Senior Notes offering.
NET INCOME. Net income decreased by $19.2 million, to $15.6
million in 1998 from $34.8 million in 1997. As a percentage of
revenues, net income decreased to 21.9% in 1998 from 44.1% in
1997. This decrease of $19.2 million, including the extraordinary
gain of $ 6.3 in 1997, was due to the decrease of net revenues by
$7.6 million due to spot market conditions, increase in the
Company's net interest expense by $6.8 million due to the higher
interest cost of the Senior Notes, and decreased voyage and
running expenses of $4.8 million resulting from fewer spot
voyages and efficient management of the Company's vessels.
LIQUIDITY AND CAPITAL RESOURCES
The Company operates in a capital-intensive industry
requiring extensive investment in revenue producing assets. The
liquidity requirements of the Company relate to servicing its
debt, funding investments in vessels, funding working capital and
maintaining cash reserves. Net cash flow generated from
operations is the main source of liquidity for the Company. Net
cash provided by operating activities was $9 million in the first
quarter of 1999 versus $14.3 million for the same period in 1998.
Additional sources of liquidity include proceeds from asset sales
and borrowings generally secured by one or more of the Company's
vessels, together with the proceeds of the Company's offering of
Senior Notes.
Net cash provided by operating activities decreased to $9
million in the first quarter of 1999 from $14.3 million in the
first quarter of 1998, primarily due to the lower net income of
$7.2 million for the period and increase of the accrued interest
and financing charges by $ 4 million, due to the interest cost of
the Senior Notes. Net cash provided by operating activities
consists of the Company's net income, increased by non-cash
expenses such as depreciation and amortization of deferred
charges, and adjusted by changes in working capital.
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Net cash used in investing activities was $7.3 million out of
which $6.8 million has been paid to the shipyard in Taiwan for
the 3rd installment of two vessels under construction. The
remaining installments within 1999 and 2000 amounts to $39.2
million and $19.7 million respectively. The net proceeds from the
scrapping of the two older vessels were $0.9 million. The
Company's principal uses of cash in investing activities have
been vessel acquisitions and improvements, and purchases of
equipment, as well as installment payments for vessels under
construction.
Net cash used in financing activities in the first quarter of
1999 was $7.5 million, which was the payment of the declared
dividend for the period ended December 31 1998. Thus, cash and
cash equivalents at March 31, 1999 were decreased to $21.1
million. The Company expects to fund the remaining $58 million
for the acquisition of the newbuildings vessels from its existing
cash together with a portion of the cash generated from the
operations of the existing fleet while the balance of $120
million will be financed by secured bank facilities.
The Senior Notes Indenture contains certain covenants that,
among other things, limit the ability of the Company and its
Restricted Subsidiaries to: (i) incur additional indebtedness;
(ii) make restricted payments; (iii) allow restrictions on
distributions from subsidiaries; (iv) incur liens; (v) enter into
certain transactions with affiliates; (vi) sell, assign,
transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company; (vii) enter into
sale and leaseback transactions; (viii) issue capital stock of
its subsidiaries; (ix) enter into certain business activities;
and (x) merge or consolidate with any other person. Events of
default under the Senior Notes Indenture include (i) failure to
pay principal or interest when due; (ii) failure to comply with
certain restrictions on mergers, consolidations and transfers of
assets, (iii) failure to comply with certain agreements and
covenants in the Senior Notes Indenture; (iv) certain events of
default on other indebtedness; (v) certain events of bankruptcy,
and (vi) the breach of any representation or warranty.
The Company believes that based on current levels of
operating performance and expected market conditions, its cash
flow from operations, together with the net proceeds of the
Senior Notes Offering and other available sources of funds, will
be adequate to make the required payments of the installments due
to the shipyard, to permit anticipated capital expenditures and
to fund the working capital requirements during the second and
third quarter of 1999.
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INFLATION
Although inflation had a moderate impact on operating
expenses, dry docking expenses and corporate overhead, management
does not consider inflation to be a significant risk to direct
costs in the current and foreseeable economic environment.
However, in the event that inflation becomes a significant factor
in the world economy, inflationary pressures would result in
increased operating and financing costs.
FOREIGN EXCHANGE RATE FLUCTUATION
The international reefer industry's functional currency is
the U.S. Dollar and, as a result, virtually all of the Company's
revenues are in U.S. Dollars. Historically, general and
administrative expenses are incurred in Greek Drachmae, while a
significant portion of the cost of revenues is incurred in U.S.
Dollars and, to a much lesser extent, other currencies. The
Company has a policy of continuously monitoring and managing its
foreign exchange exposure, but the Company currently does not
have any, and does not believe that it has any current need to
enter into, foreign currency hedging transactions.
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ENTERPRISES SHIPHOLDING CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND MARCH 31, 1999
(Expressed in thousands of U.S. Dollars - except per share data)
ASSETS 1998 1999
CURRENT ASSETS:
Cash and cash equivalents $ 26,854 $ 21,106
--------- ---------
Marketable Securities 24,126 25,506
Accounts receivable-
Trade 785 0
Insurance claims 1,276 700
Others receivables 1,451 1,710
--------- ---------
3,512 2,410
--------- ---------
Inventories 1,869 1,798
Prepayments and other 229 2,178
--------- ---------
Total current assets 56,590 52,998
--------- ---------
FIXED ASSETS:
Advances for vessel under
reconstruction 36,592 43,461
Vessels' cost 224,929 221,027
Accumulated depreciation (71,988) (73,278)
---------- ---------
---------- ---------
Total fixed assets 189,533 191,210
--------- ---------
OTHER NON CURRENT ASSETS:
Deferred charges, net of
amortization of $ 2,204
and $ 327 at December 31,
1998 and March 31, 1999 5,014 4,687
--------- ---------
Total assets $ 251,137 $ 248,895
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 0 $ 0
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--------- ---------
Accounts payable-
Trade 3,558 4,957
Due to a related company 570 0
Master accounts 691 890
--------- ---------
4,819 5,847
--------- ---------
Dividends payable 7,500 0
Due to management companies 409 215
Unearned revenue 1,156 1,218
Accrued interest and finance charges 2,589 6,471
Other accrued liabilities 648 1,125
Due to shareholders 0 0
--------- ---------
Total current liabilities 17,121 14,876
--------- ---------
LONG-TERM DEBT, net of current maturities
Senior notes payable 175,000 175,000
Banks 0 0
Related party 0 0
--------- ---------
175,000 175,000
--------- ---------
SHAREHOLDERS' EQUITY:
Share capital, nominal value
$0.01 each (100,000,000
shares authorised, issued
and outstanding at
December 31, 1998
and March 31, 1999) 1,000 1,000
Retained earnings 57,125 57,198
Other comprehensive income 891 821
--------- ---------
Total shareholders' equity 59,016 59,019
--------- ---------
Total liabilities and
shareholders' equity $ 251,137 $ 248,895
========= =========
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ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIOD ENDED MARCH 31, 1998 AND MARCH 31, 1999
(Expressed in thousands of U.S. Dollars - except per share data)
1998 1999
REVENUE FROM VESSELS, net $ 20,041 $ 16,408
VOYAGE AND RUNNING EXPENSES (7,210) (7,778)
----------- -----------
Gross profit 12,831 8,630
DEPRECIATION AND AMORTIZATION (3,599) (3,846)
GENERAL AND ADMINISTRATIVE
EXPENSES (1,119) (1,340)
----------- -----------
Income from operations 8,113 3,444
----------- -----------
OTHER INCOME (EXPENSES):
Interest and finance expenses, net (702) (3,278)
Foreign currency gain (loss) 92 91
Other, net (240) (184)
----------- -----------
Total other income (expenses) (850) (3,371)
----------- -----------
Net Income $ 7,263 73
=========== ===========
Earnings per share, basic $ 0.07 $ 0.00
=========== ===========
Weighted average number
of shares, basic 100,000,000 100,000,000
=========== ===========
EBITDA $ 11,712 7,290
Ratio of EBITDA to interest
expense.net 16.68 2.22
EBITDA Margin 58.44% 44.43%
17
<PAGE>
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED MARCH 31,1998
(Expressed in thousands of U.S. Dollars - except per share data)
VALUATION
OF
MARKETABLE
CAPITAL SECURITIES RETAINED
STOCK SURPLUS (LOSS) EARNINGS TOTAL
--------- -------------- --------- --------
BALANCE, December 31, 1997 $ 1,000 $ 0 $ 49,000 $ 50,000
Net Income 0 0 7,264 7,264
Dividends paid 0 0 0 0
--------- ---------- --------- --------
BALANCE March 31, 1998 $ 1,000 $ 0 $ 56,264 $ 57,264
========= ========== ========= ========
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED MARCH 31,1999
(Expressed in thousands of U.S. Dollars - except per share data)
VALUATION
OF
MARKETABLE
CAPITAL SECURITIES RETAINED
STOCK SURPLUS EARNINGS TOTAL
--------- ----------- --------- --------
BALANCE, December 31, 1998 $ 1,000 $ 891 $ 57,125 $ 59,016
Net income 0 0 73 73
Valuation of
Marketable sec. 0 -70 0 -70
-------- ---------- --------- --------
BALANCE, March 31, 1999 $ 1,000 $ 821 $ 57,198 $ 59,019
======== ========== ========= ========
18
<PAGE>
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE PERIODS ENDED MARCH 31, 1998 AND MARCH 31, 1999
(Expressed in thousands of U.S. Dollars)
1998 1999
Cash Flows from operating activities:
Net income $ 7,264 73
Adjustments to reconcile net
income to net cash provided by
operating activities-
Depreciation 3,347 3,519
Amortization of deferred charges 252 327
Loss from vessels sale 0 701
(Increase) Decrease in:
Accounts receivable 160 1,102
Inventories (89) 71
Prepayments and other (2,183) (1,949)
Increase (Decrease) in:
Accounts payable 2,574 1,028
Other accrued liabilities (333) 4,359
Unearned revenue 913 62
Amounts due to management companies 2,521 (194)
Other (83) 0
0 0
---------- ----------
Net cash provided by operating
activities 14,343 9,099
---------- ----------
Cash Flows (for) from investing
activities:
Advances for vessels under
construction/reconstruction (1,179) (6,869)
Payments for vessels' acquisition
and improvements 0 0
Net proceeds from vessels sale 0 972
Payments for drydocking and
special survey costs (204) 0
Purchase of marketable securities 0 (1,450)
---------- ----------
Net cash (used in) provided by
investing activities (1,383) (7,347)
---------- ----------
Cash Flows (for ) from financing
activities:
Proceeds from shareholders, net
of withdrawals 0 0
Proceeds from long-term debt, banks 0 0
Proceeds from issuance of Senior Notes 0 0
19
<PAGE>
Payments and repayment of long-term
debt, banks 0 0
Payments and repayment of long-term
debt, related party (2,344) 0
Payments for financing fees 0 0
Payments for dividends 0 (7,500)
Notes issuance and distribution 0 0
---------- ----------
Net cash (used in) provided by
financing activities (2,344) (7,500)
---------- ----------
Net increase (decrease) in cash and
cash equivalents 10,616 (5,748)
Cash and Cash Equivalents, beginning
of period 5,590 26,854
---------- ----------
Cash and Cash Equivalents, end of
period $ 16,206 21,106
========== ==========
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
ENTERPRISES SHIPHOLDING CORPORATION
(registrant)
Dated: May 18, 1999 By: /s/ Victor Restis
___________________________
Victor Restis
President and Chief
Executive Officer
21
02391004.AA9
