FORM 6-K/A
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 June 2006
Commission File Number 000-51141
DRYSHIPS INC.
80 Kifissias Avenue
Amaroussion 15125, Athens Greece
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): ___
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ___
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]
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-______________.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Included in this Report on Form 6-K/A as Exhibit 1 is the amended operating
report of DryShips Inc. (the "Company") for the quarter ended March 31, 2006.
This Form 6-K/A amends and restates in its entirety the Form 6-K filed on June
9, 2006 containing the Company's operating report for the quarter ended March
31, 2006.
This Report on Form 6-K/A is hereby incorporated by reference into the Company's
Registration Statement on Form F-3/A filed on May 3, 2006 (Registration No.
333-133482).
Exhibit 1
DRYSHIPS INC.
First Quarter 2006 Financial Results
For the first quarter ended March 31, 2006, Net Revenues (Voyage revenues less
voyage expenses, excluding bunkers) amounted to $50.2 million as compared to
$28.0 million for the first quarter ended March 31, 2005 and Operating Income
was $ 24.1 million as compared to $19.8 million as of March 31, 2005. Net Income
for the first quarter of 2006 was $18.1 million as compared to $19.6 million in
the quarter ended March 31, 2005 and Earnings Per Share (EPS) calculated on
30,350,000 weighted average basic and diluted shares outstanding were $0.60 as
compared to $0.79 in the quarter ended March 31, 2005 calculated on 24,702,222
weighted average basic and diluted shares outstanding. EBITDA(1) for the first
quarter of 2006 was $38.0 million as compared to $23.1 million in the quarter
ended March 31, 2005.
An average of 27 vessels were owned and operated during the first quarter of
2006, earning an average Time Charter Equivalent, or TCE, rate of $21,324 per
day as compared to an average of 8.6 vessels owned and operated during the first
quarter of 2005 earning an average TCE rate of $36,430 per day.
New Credit Facility
On March 31, 2006 DryShips entered into a new credit facility with HSH Nordbank
acting as Lead Arranger and Agent and with HSH Nordbank and Bank of Scotland
acting as joint underwriters.
The new facility provides for an amount of up to $628.75 million in total of
which $557.5 million is to be used for the purpose of refinancing existing
indebtedness, financing the acquisition costs of the Hille Oldendorff and
providing the Company with working capital, with a term of 10 years maturing in
May 2016 and up to $71.25 million for the acquisition of additional vessels.
On April 5, 2006, the Company drew down $553.3 million for the refinancing of
existing debt together with the financing for the Hille Oldendorff and for
working capital.
Total principal repayments under the new facility are $36.0 million for the
remainder (9 months) of 2006, followed by $55.5 million in 2007, $49.0 million
in 2008, $45.5 million in 2009 and $252.0 million in 2010 thru 2015 and $115.3
million in 2016.
Capitalization
Total debt net of deferred financing fees to total capitalization (total debt
net of deferred financing fees and stockholders' equity) at March 31, 2006 was
57.88% and net debt (total debt net of deferred financing fees less cash and
cash equivalents and restricted cash) to total capitalization (total debt net of
deferred financing fees and stockholders' equity) was 56.48%.
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(1) Please see below for a description of EBITDA and a reconciliation of EBITDA
to Net cash provided by Operating activities.
As of May 31, 2006 the Company had a total liquidity of approximately $64.15
million consisting of $19.4 million in cash and cash equivalents and an undrawn
balance of $44.75 million available under the new credit facility.
Fleet Expansion
During the first quarter of 2006, DryShips announced two accretive acquisitions
that expanded the fleet to a total of 29 vessels with a total carrying capacity
of approximately 2.4 million dwt, while at the same time enhancing the
predictability and stability of the Company's earnings as both vessels were
acquired with period employment.
In March 2006, DryShips exercised its purchase option for the Hille Oldendorff,
a 2005 built, 55,566 dwt, handymax drybulk carrier, which was delivered on April
19, 2006. The vessel was purchased for a total price of $40.76 million with a
bareboat charter attached at $19,745 per day, net of commissions, until March
2007. The seller was an affiliated company of DryShips that acquired the vessel
in late October 2005 from an unaffiliated company. The vessel was partly
financed by a short-term unsecured sellers' credit for an amount of $3.25
million. The sellers' credit, which bears interest at LIBOR plus a margin of
1.5%, is repayable not later than March 2007.
In April, 2006, DryShips entered into an agreement to acquire the Maganari, a
2001 built second-hand 75,941 dwt Panamax drybulk carrier, which was delivered
on May 15, 2006. The vessel was purchased for a total price of $35.4 million
with a time charter attached at a daily rate of $29,000 until February 2007 and
thereafter at a daily rate of $18,400 until February 2008. The seller was an
unaffiliated company. The vessel was partly financed with a $8.84 million short
term unsecured fully subordinated bridge loan provided by an affiliated company
that accrues interest of $100,000 per month pro-rata until December 31, 2006.
Dividend Payment
In April 2006, DryShips declared and paid its quarterly dividend of $0.20 per
common share. This was the fourth consecutive dividend payment since the Company
went public in 2005. Since that time, DryShips has paid a total of $0.80 per
share in dividends.
Fleet Data
Average number of vessels (1) 27.00 8.6
Total voyage days for fleet (2) 2,381 774
Total calendar days for fleet (3) 2,430 774
Fleet Utilization (4) 98.0% 100.0%
Average Daily Results
Time charter equivalent (5) $21,324 $36,430
Capesize (5) $33,768 $74,244
Panamax(5) $19,698 $30,927
Handymax(5) $15,063 $15,288
Vessel operating expenses (6) $4,318 $5,081
Management fees $594 $709
General and administrative expenses (7) $399 $1,002
Total vessel operating expenses (8) $5,311 $6,792
(1) Average number of vessels is the number of vessels that constituted our
fleet for the relevant period, as measured by the sum of the number of days each
vessel was a part of our fleet during the period divided by the number of
calendar days in that period.
(2) Total voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of off hire days associated with major
repairs, drydockings or special or intermediate surveys.
(3) Calendar days are the total days the vessels were in our possession for the
relevant period including off hire days associated with major repairs,
drydockings or special or intermediate surveys.
(4) Fleet utilization is the percentage of time that our vessels were available
for revenue generating voyage days, and is determined by dividing voyage days by
fleet calendar days for the relevant period.
(5) Time charter equivalent, or TCE, is a measure of the average daily revenue
performance of a vessel on a per voyage basis. Our method of calculating TCE is
consistent with industry standards and is determined by dividing voyage revenues
(net of voyage expenses) by voyage days for the relevant time period. Voyage
expenses primarily consist of port, canal and fuel costs that are unique to a
particular voyage, which would otherwise be paid by the charterer under a time
charter contract, as well as commissions. TCE is a standard shipping industry
performance measure used primarily to compare period-to-period changes in a
shipping company's performance despite changes in the mix of charter types
(i.e., spot charters, time charters and bareboat charters) under which the
vessels may be employed between the periods.
(6) Daily vessel operating expenses, which includes crew costs, provisions, deck
and engine stores, lubricating oil, insurance, maintenance and repairs is
calculated by dividing vessel operating expenses by fleet calendar days for the
relevant time period.
(7) Daily general and administrative expense is calculated by dividing general
and administrative expense by fleet calendar days for the relevant time period.
(8) Total vessel operating expenses, or TVOE is a measurement of our total
expenses associated with operating our vessels. TVOE is the sum of vessel
operating expenses, management fees and general and administrative expenses.
Daily TVOE is calculated by dividing TVOE by fleet calendar days for the
relevant time period.
Fleet Employment
We actively and strategically employ our vessels in the spot charter market
(under charters that generally last for periods of 10 days to four months),
under period time charters (which can last up to several years) and in drybulk
carrier pools.
Total TCE revenue increased during the first quarter of 2006 compared to the
first quarter of 2005, primarily as a result of an increase in the average
number of vessels operated, from an average of 8.6 vessels in the first quarter
of 2005 to an average of 27 vessels in the first quarter of 2006 offset by a
decline in the average daily TCE rate from $36,430 in the first quarter of 2005
to $21,324 in the first quarter of 2006.
Vessel operating expenses increased to $10.5 million for the first quarter of
2006 compared to $3.9 million for the first quarter of 2005. The increase is
attributable to the increase in the number of vessels operated from an average
of 8.6 vessels for the first quarter of 2005 to an average of 27 vessels for the
first quarter of 2006, offset by a lower daily vessel operating expenses
decreasing from $5,081 per day for the first quarter of 2005 to $4,318 per day
for the first quarter of 2006. This decrease is primarily a result of a younger
fleet and no deliveries in the first quarter of 2006, whereas 11 vessels were
delivered to the Company during the first quarter of 2005. Generally the
delivery of vessels entails additional associated costs.
Depreciation and amortization increased to $13.8 million in the first quarter of
2006 compared to $3.1 million in the first quarter of 2005. This was a direct
result of the increase in the Company's fleet from an average of 8.6 vessels in
the first quarter of 2005 to an average of 27 vessels in the first quarter of
2006.
Management fees increased to $1.4 million in the first quarter of 2006 compared
to $0.5 million in the first quarter of 2005 as a direct result of the increase
in the number of vessels operated from an average of 8.6 vessels in the first
quarter of 2005 to an average of 27 vessels in the first quarter of 2006.
General and administrative expense increased from $0.8 million in the first
quarter of 2005 to $1.0 million in the first quarter of 2006 primarily as a
result of the quarterly fee of $250,000 paid to Cardiff Marine Inc. under our
contract for ongoing services entered into in November 2005 and effective
January 1, 2005 for services rendered by Cardiff Marine Inc. in relation to the
Company's compliance with the reporting requirements under the rules of the
Securities and Exchange Commission and the establishment and monitoring of
internal controls over financial reporting. During the first quarter of 2005, no
services were rendered under the contract and we did not incur such quarterly
fee.
DryShips Inc. Fleet
As at March 31, 2006, our fleet consisted of 27 vessels.
During the three month period ended March 31, 2006, the Company operated the
following types of vessels:
Capesize Panamax Handymax Total
---------------------------------------------------
Average number of vessels during period 4.00 21.00 2.00 27.00
Number of vessels at end of period 4.00 21.00 2.00 27.00
Dwt at end of period 657,256 1,512,456 94,503 2,264,215
Dwt as percentage of total fleet 29.03% 66.80% 4.17% 100.00%
Average age at end of period 10.50 11.81 8.00 11.33
Financial Statement Data
The following are DryShips Inc.'s Unaudited Condensed Income Statement Data for
the three-month periods ended March 31, 2006 and March 31, 2005:
(Expressed in thousands of U.S. Dollars except for share and
per share data)
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
------------------ -----------------
Restated Unaudited Restated Unaudited
INCOME STATEMENT DATA
Voyage revenues $54,809 $30,165
Voyage expenses and voyage expenses - related party 4,577 2,143
Bunkers (541) (175)
Vessels operating expenses 10,492 3,933
Depreciation and amortization 13,766 3,090
Management fees - related party 1,444 549
General and administrative expenses and general and
administrative expenses - related party 969 776
Operating Income 24,102 19,849
Interest and finance costs, net (6,109) (402)
Other, net 121 147
NET INCOME $18,114 $19,594
Earnings per common share, basic and diluted $0.60 $0.79
Weighted average basic and diluted shares outstanding 30,350,000 24,702,222
The following are DryShips Inc.'s Condensed Balance Sheet Data as at March 31,
2006 (unaudited) and December 31, 2005:
(Expressed in thousands of U.S. Dollars)
As at As at
March 31, 2006 December 31, 2005
------------------- --------------------
Restated Unaudited
BALANCE SHEET DATA
Cash and cash equivalents $7,891 $5,184
Other current assets 13,503 13,593
Vessels, net 851,686 864,733
Other non-current assets 28,877 27,049
------------------- --------------
TOTAL ASSETS $901,957 $910,559
=================== ==============
Current portion of long-term debt, net of deferred
financing fees $107,726 $107,738
Other current liabilities 26,276 28,007
Long-term debt, net of current portion and net of 398,684 417,615
deferred financing fees
Other non-current liabilities 726 698
Total Liabilities 533,412 554,058
Total Stockholders' Equity 368,545 356,501
------------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $901,957 $910,559
=================== ==============
EBITDA Reconciliation
DryShips Inc. considers EBITDA to represent net income before interest, taxes,
depreciation and amortization. EBITDA does not represent and should not be
considered as an alternative to net income or cash flow from operations, as
determined by United States generally accepted accounting principles, or U.S.
GAAP, and our calculation of EBITDA may not be comparable to that reported by
other companies. EBITDA is included herein because it is a basis upon which we
assess our liquidity position, because it is used by our lenders as a measure of
our compliance with certain loan covenants and because we believe that it
presents useful information to investors regarding a company's ability to
service and/or incur indebtedness. The following table reconciles Net cash
provided by Operating activities to EBITDA:
(Dollars in thousands)
3 Months ended 3 Months ended
March 31, 2006 March 31, 2005
---------------- ---------------
Net cash provided by Operating activities 26,512 29,162
Net increase (decrease) in current assets 1,245 3,948
Net (increase) decrease in current liabilities,
excluding current portion of long term debt 1,382 (10,900)
Amortization of deferred revenue 361 527
Amortization of free lubricants (40) (29)
Change in fair value of derivatives 1,705 -
Net interest expense 6,109 402
Amortization of deferred financing costs included in
interest expense (121) (24)
Payments for dry-docking costs 836 -
EBITDA 37,989 23,086
Fleet List
The table below describes in detail our fleet development and current employment
profile as of June 5th, 2006:
Year Current Redelivery
Built Deadweight Type Employment Earliest Latest
Capesize
Manasota 2004 171,061 Capesize $46,000 Sep-06 Nov-06
Alameda 2001 170,662 Capesize $28,000 Feb-07 Apr-07
Shibumi 1984 166,058 Capesize Spot - $20,000
Netadola 1993 149,475 Capesize Spot - $29,250
Panamax
Conrad Oldendorff 2002 76,623 Panamax $42,000 Nov-06 Feb-07
Coronado 2000 75,706 Panamax Spot - $16,750
Waikiki 1995 75,473 Panamax Spot - $15,500
Mostoles 1981 75,395 Panamax Baumarine $11,576
Linda Oldendorff 1995 75,100 Panamax $43,250 Jul-06 Oct-06
Sonoma 2001 74,786 Panamax Baumarine $15,905
Catalina 2005 74,432 Panamax $18,100 Sep-06 Oct-06
Ocean Crystal 1999 73,688 Panamax $17,900 Jul-06 Jul-06
Padre 2004 73,601 Panamax $17,800 Jul-06 Jul-06
Toro ** 1995 73,034 Panamax Baumarine $15,739
Xanadu 1999 72,270 Panamax $35,000 Jun-06 Sep-06
La Jolla 1997 72,126 Panamax Spot - $17,500
Lacerta ** 1994 71,862 Panamax Baumarine $15,646
Panormos ** 1995 71,747 Panamax Baumarine $16,237
Paragon 1995 71,259 Panamax $30,000 Aug-06 Oct-06
Iguana 1996 70,349 Panamax $16,500 Jul-06 Jul-06
Daytona ** 1989 69,703 Panamax Baumarine $13,683
Lanikai ** 1988 68,676 Panamax Baumarine $13,881
Tonga ** 1984 66,798 Panamax Baumarine $11,016
Flecha 1982 65,081 Panamax Baumarine $11,571
Striggla ** 1982 64,747 Panamax Baumarine $12,037
Maganari*** 2001 75,941 Panamax $29,000 Feb-07 May-07
$18,400 Feb-08 Jul-08
Handymax
Alona 2002 48,640 Handymax $19,900 Sep-06 Nov-06
Matira 1994 45,863 Handymax $15,800 Sep-06 Nov-06
Hille Oldendorff**** 2005 55,566 Handymax $20,020 Jan-07 May-07
DRYSHIPS FLEET 2,395,722
* Where the Redelivery column is left blank it signifies that the vessel is
trading in the spot market. For those vessels where rates are quoted, the
Company has calculated the estimated rates under current specific contracted
voyages. The Company gives no guarantee that these rates are correct, or that
the rates are sustainable beyond the duration of the current voyage. The quoted
rates are not indications of future earnings and the Company gives no assurance
or guarantee of future rates after the current voyage.
** Indicates vessels that are trading in the Baumarine Pool. Rates quoted refer
to the vessels' earnings as last reported, usually the previous month's
earnings.
*** Maganari has been fixed on a direct continuation at $18,400 per day for 12
months. Earliest and latest redelivery dates are February 2007 and May 2007
respectively.
**** Hille Oldendorff is employed under a bareboat charter.
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements.
Forward-looking statements reflect our current views with respect to future
events and financial performance and may include statements concerning plans,
objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical
facts. The forward-looking statements in this release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical operating
trends, data contained in our records and other data available from third
parties. Although DryShips Inc. believes that these assumptions were reasonable
when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, the Company cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, general market conditions, including
changes in charterhire rates and vessel values, changes in demand that may
affect attitudes of time charterers to scheduled and unscheduled drydocking,
changes in the Company's operating expenses, including bunker prices,
dry-docking and insurance costs, or actions taken by regulatory authorities,
potential liability from pending or future litigation, domestic and
international political conditions, potential disruption of shipping routes due
to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by DryShips Inc.
with the U.S. Securities and Exchange Commission.
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.
DryShips Inc.
---------------------------------
(Registrant)
Dated: June 29, 2006 By: /s/ Christopher J. Thomas
----------------------------------
Christopher J. Thomas
Chief Financial Officer
SK 23113 0002 681816 v4