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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 November, 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 September 30, 1999.
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Athens 22nd November 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 September 30, 1999.
During the first nine months 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. The activities were basically driven by the increased
export volume from Chile where the growing conditions are back to
normal, while Ecuador, the world largest exporter of bananas,
slowly recovered from the devastating effect of the El Nino
phenomenon. The spot freight rates ranged from $0.28/cu.ft during
January to $0.90/cu.ft for March to $0.30/cu.ft in June while in
August has reached the dismal levels of $0.10/cu.ft. In September
and October the freight rates increased to $0.20/cu.ft mainly due
to more vessels being in lay-up. Due to the depressed market
conditions 73 vessels are reported in lay up and around 14.8
million cu.ft, which represents 4.3% of the world fleet have been
reported as scrapped during the first nine months of the year.
In the nine months of 1999 12 vessels of our fleet were trading
in the spot market contributing $ 4.7 million of EBITDA which
represents only 27% of the company's EBITDA. The outlook of the
spot market during the third and fourth quarter has been very
sluggish and as such 9 out of the 21 vessels are in lay-up
condition as the freight rates do not justify to trade them below
their running expenses. An other indication of the lack of
cargoes and surplus of tonnage is that our fleet operated 4830
days during the nine months in 1999 compared to 5994 days in the
same period in 1998. The fleet utilization dropped to 77%
compared to 85% of last year. The remaining 12 vessels are on a
period time charter with an average rate of $0.54 per cubic feet
calculated on a monthly basis up to each vessel's existing
charter expiration. We have not renewed or chartered any vessel
for next year, which is another indication that the charterers
are not willing to period contracts. One reason being that the
EU- WTO dispute is not resolved.
The newbuilding program continues uninterrupted and the first
vessel which was due for delivery at the end of September will be
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finally delivered at the end of November while her time charter
has been extended to reflect the new delivery date.
For the nine months ending September 30, 1999, the Company's
revenues were $41.5 million, EBITDA was $17.6 million and net
income was a loss of $(10.2) million, including a provision of
$6.7 million for a charterer's claim. We were expecting lower
figures from last year's results and losses for 1999 as we
anticipate for next year due to worse than anticipated market
conditions, lay up of vessels and increased financing cost.
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 24th
November 1999 at 9:30 am New York time to discuss the third
quarter 1999 results.
To participate in the conference call please dial the number
(212) 896 6016
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 21 vessels,
including 19 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 21 vessels: (i) 19
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 September 30, 1999.
Year Ended December 31, September 30,
_______________________________________
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 5
Fleet owned at end of period......... 17 20 24 26 26 21
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 8.5
TEU Capacity (at end of period)...... 0 0 0 648 648 648
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.
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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
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
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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 nine months of 1999 were $0.28 in
January, $0.55 in February and $0.90 in March to a low of $0.28
in June to a dismal level of $0.10 in August.
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, September 30,
_______________________________________
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 47.8
Depreciation and amortization........ 19.0 20.4 16.8 18.3 20.7 26.6
General and administrative expenses.. 4.3 4.1 3.9 4.3 7.4 9.8
Income from operations............... 40.3 36.1 37.7 37.4 34.4 15.8
Interest expense, net................ 3.7 3.9 4.2 3.5 13.5 23.9
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 40.4
Minority interest.................... 0.6 0.0 0.0 0.0 0.0 0.0
Net income(loss)..................... 37.0 31.6 34.2 44.1 21.9 (24.6)
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
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 nine months of 1999 revenues from time charter
represented 80% of the Company's revenues reflecting the market
conditions and the unwillingness of the charterers to commit to
period charters.
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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, Year Ended
______________________________________________
1994 1995 1996 1997 1998 September
30, 1999
______________________________________________
Average revenue per vessel
per day...................... $8,169 $8,418 $10,086 $10,555 $9,319 $8,600
Percentage increase
(decrease)................... - 3.0% 19.8% 4.7% (11.7)% (7.7)%
Total operating days........... 5,625 6,037 7,777 7,492 7,666 4830
Percentage increase............ - 7.3% 28.8% (3.7)% 2.3% NA
Voyage and running expenses(VAR). 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:
Year Ended December 31, Year Ended
______________________________________________
1994 1995 1996 1997 1998 September
30, 1999
______________________________________________
Average VAR expenses per
vessel per day............... $2,791 $3,002 $3,989 $3,437 $2,824 $3,196
Percentage increase (decrease) - 7.5% 32.9% (13.8)% (17.8)% 13.2%
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
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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.
Nine Months Ended September 30, 1999, compared with Nine Months
Ended September 30, 1998
Revenue from vessels, net. Revenue from vessels, net,
decreased $15.4 million to $41.5 million in the nine months of
1999, compared to $56.9 million in the same period in 1998,
representing a 27.1% decrease. Average daily revenue per vessel
decreased to $8,600 in the first nine months of 1999 from $9,502
in the first nine months of 1998, representing a 9.5% decrease.
Operating days decreased to 4830 days in the nine months of 1999
from 5994 days in the nine months of 1998, representing a 19.5%
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 repositioning vessels from one charter to another. In the
first nine months of 1999 12 vessels were in the spot market
operating 1610 days out of the 2699 available days compared to
the first nine months of 1998 where 5 vessels were in the spot
market operating 963 days out of the 1350 available days.
Consequently, revenues from time charters in the nine months of
1999 were $33.3 million and $8.2 million from the voyage charters
compared to $51.4 million and $5.5 million respectively for the
nine months of 1998.
Voyage and running expenses. Voyage and running expenses
decreased by $1.5 million, to $19.8 million in the first nine
months of 1999 from $21.3 million in the first nine months of
1998. As a percentage of revenues, voyage and running expenses
increased to 47.8% in the first nine months of 1999 compared to
37.4% in the first nine months of 1998. The decrease of $1.5
million was mainly due to the fact that fewer vessels operated in
1999 and the fleet operated fewer days thus saving $2.0 million
while the voyage expenses in 1999 increased only to $2.9 million
compared to $2.3 million in the same period of last year.
General and administrative expenses. General and
administrative expenses increased by $0.3 million to $4.0 million
in the first nine months of 1999 compared to $3.7 million in the
first nine months of 1998. This increase was mainly due to the
new compensation of the Directors, which was effective from 1st
September 1998.
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Depreciation and amortization. Depreciation and amortization
decreased by $0.3 million to $11.0 million in the first nine
months of 1999 from $11.3 million in the first nine months of
1998. This decrease was mainly due to the sale for scrapping of
five vessels during the first nine months of 1999 amounting to
$0.3 million.
Interest expense, net. Interest expense, net, increased by
$4.0 million, to $9.9 million in the first nine months of 1999
from $5.9 million in the first nine months of 1998. This
increase was primarily due to the interest of $11.7 million on
the Company's Senior Notes from January 1 to September 30, 1999.
Interest income in the first nine months of 1999 and in 1998 was
$1.7 million and $2.0 million, respectively.
Net income. Net income decreased by $24.4 million, to
$(10.2) million in the first nine months of 1999 from $14.2
million in the first nine months of 1998, including a $6.7
million provision that the management decided, based on the US
GAAP principals and legal opinions received, in order to reflect
a charterer's claim arbitration award. This decrease of $24.4
million was mainly due to the decrease of net revenues by $15.4
million due to the low spot market freight rates, increase in the
Company's net interest expense by $4.0 million due to the higher
interest cost of the Senior Notes.
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. Eventhough 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
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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
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, 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
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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 $13.9 million in the
first nine months of 1999 versus $29.9 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 $13.9
million in the first nine months of 1999 from $29.9 million in
the first nine months of 1998, primarily due to the lower net
income of $(10.2) million for the period compared with the net
income of $14.1 million for the same period last year. 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.
Net cash used in investing activities was $4.8 million out of
which $13.8 million has been paid to the shipyard in Taiwan for
the 2nd installment of one vessel, 3rd installment of two vessels
and the 4th installment of one vessel under construction. The
remaining installments within 1999 and 2000 amounts to $29.7
million and $22.8 million respectively. The net proceeds from the
scrapping of the five older vessels were $2.5 million. The
Company's principal uses of cash in investing activities has been
vessel acquisitions and improvements, mainly new vessels, and
purchases of equipment, as well as installment payments for
vessels under construction.
Net cash used in financing activities in the first nine
months 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 September 30, 1999 were decreased to
$28.4 million. The Company expects to fund the remaining $52.5
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 the
order amounting to $120 million will be financed by secured bank
facilities.
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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 payment of the installments due
to the shipyard in 1999, to permit anticipated capital
expenditures and to fund the working capital requirements until
the end of 1999. Furthermore the Company believes that the first
semester of 2000 will be critical to its liquidity, as the
prolonged reefer recession will severely affect its ability to
comply with all of its obligation.
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
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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 SEPTEMBER 30 1999
(Expressed in thousands of U.S. Dollars - except per share data)
ASSETS 1998 1999
CURRENT ASSETS:
Cash and cash equivalents $ 26,854 $ 28,462
_________ _________
Marketable Securities 24,126 17,207
Accounts receivable-
Trade 785 614
Insurance claims 1,276 400
Others receivables 1,451 660
_________ _________
3,512 1,674
_________ _________
Inventories 1,869 1,280
Prepayments and other 229 1,014
_________ _________
Total current assets 56,590 49,637
_________ _________
FIXED ASSETS:
Advances for vessel under
reconstruction 36,592 50,464
Vessels' cost 224,929 213,439
Accumulated depreciation (71,988) (74,406)
_________ _________
_________ _________
Total fixed assets 189,533 189,497
_________ _________
OTHER NON CURRENT ASSETS:
Deferred charges, net of amortization
of $2,204 and $941 at December 31,
1998 and September 30, 1999 5,014 4,453
_________ _________
Total assets $ 251,137 $ 243,587
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 0 $ 0
_________ _________
Accounts payable-
Trade 3,558 3,698
Due to a related company 570 0
Charterer Claim 0 6,732
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Master accounts 691 442
_________ _________
4,819 10,872
_________ _________
Dividends payable 7,500 0
Due to management companies 409 0
Unearned revenue 1,156 1,435
Accrued interest and finance charges 2,589 6,471
Other accrued liabilities 648 1,065
Due to shareholders 0 0
_________ _________
Total current liabilities 17,121 19,843
_________ _________
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 September 30 1999) 1,000 1,000
Retained earnings 57,125 46,912
Other comprehensive income 891 832
_________ _________
Total shareholders' equity 59,016 48,744
Total liabilities and
shareholders' equity $ 251,137 $ 243,587
========== =========
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<PAGE>
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIOD ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999
(Expressed in thousands of U.S. Dollars - except per share data)
1998 1999
REVENUE FROM VESSELS, net $ 56,952 $ 41,541
VOYAGE AND RUNNING EXPENSES (21,278) (19,851)
___________ ___________
Gross profit 35,674 21,690
DEPRECIATION AND AMORTIZATION (11,306) (11,032)
GENERAL AND ADMINISTRATIVE EXPENSES (3,692) (4,063)
___________ ___________
Income from operations 20,676 6,595
___________ ___________
OTHER INCOME (EXPENSES):
Interest and finance expenses, net (5,981) (9,927)
Foreign currency gain (loss) (37) 63
Provision for Charterer Claim 0 (6,732)
Other, net (462) (212)
___________ ___________
Total other income (expenses) (6,480) (16,808)
___________ ___________
Net Income $ 14,196 $ (10,213)
=========== ===========
Earnings per share, basic $ 0.14 $ (0.10)
=========== ===========
Weighted average number of shares,
basic 100,000,000 100,000,000
=========== ===========
EBITDA $ 31,982 $ 17,627
Ratio of EBITDA to interest
expense.net 5.35 1.78
EBITDA Margin 56.16% 42.43%
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<PAGE>
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED SEPTEMBER 30,1998
(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 14,196 14,196
Valuation of Marketable
securities 0 390 0 390
__________ _____________ ___________ _________
BALANCE September 30, 1998 $ 1,000 $ 390 $ 63,196 $ 64,586
========== ============ ========== =========
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED SEPTEMBER 30,1999
(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 (10,213) (10,213)
Valuation of Marketable
sec. 0 (59) 0 (59)
__________ ____________ __________ _________
BALANCE, September 30,1999 $ 1,000 $ 832 $ 46,912 $ 48,744
========= ============ ========== =========
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<PAGE>
ENTERPRISES SHIPHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE PERIODS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999
(Expressed in thousands of U.S. Dollars)
1998 1999
_____________ _____________
Cash Flows from operating activities:
Net income $ 14,196 $ (10,213)
Adjustments to reconcile net income to
net cash provided by operating activities-
Depreciation 10,379 10,092
Amortization of deferred charges 927 941
Loss from vessels sale 0 1,249
(Increase) Decrease in:
Accounts receivable (823) 1,838
Inventories 162 589
Prepayments and other (546) (785)
Increase (Decrease) in:
Accounts payable (214) (1,088)
Other accrued liabilities 137 418
Accrued interest and finance
charges 6,383 3,882
Unearned revenue 42 279
Charterer Claim 0 6,732
Amounts due to management companies (646) 0
Other 0 0
______________ _______________
Net cash provided by operating activities 29,997 13,934
______________ _______________
Cash Flows (for) from investing activities:
Advances for vessels under
construction/reconstruction (5,823) (13,872)
Payments for vessels' acquisition
and improvements 0 0
Net proceeds from vessels sale 0 2,566
Payments for drydocking and special
survey costs (326) (380)
Purchase of marketable securities (26,820) 6,860
______________ _______________
Net cash (used in) provided by
investing activities (32,969) (4,826)
______________ _______________
Cash Flows (for) from financing activities:
Proceeds from shareholders,
net of withdrawals (237) 0
Proceeds from long-term debt, banks 0 0
Proceeds from issuance of Senior Notes 175,000 0
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<PAGE>
Payments and repayment of long-term
debt, banks (64,844) 0
Payments and repayment of long-term
debt, related party (47,133) 0
Payments for financing fees 0 0
Payments for dividends 0 (7,500)
Notes issuance and distribution (4,379) 0
______________ _______________
Net cash (used in) provided by
financing activities 58,407 (7,500)
______________ _______________
Net increase (decrease) in cash
and cash equivalents 55,435 1,608
Cash and Cash Equivalents,
beginning of period 5,590 26,854
______________ _______________
Cash and Cash Equivalents, end of peiod $ 61,025 $ 28,462
============== ===============
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<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: November 23, 1999 By: /s/ Victor Restis
___________________________
Victor Restis
President and Chief
Executive Officer
21
02391003.AA0
