DryShips Inc. Reports Financial and Operating Results for the Third Quarter 2017

ATHENS, GREECE -- (Marketwired) -- 11/21/17 -- DryShips Inc. (NASDAQ: DRYS), or DryShips or the Company, a diversified owner of ocean going cargo vessels, today announced its unaudited financial and operating results for the quarter ended September 30, 2017.

Updated Key Information as of November 20, 2017

  • Cash and cash equivalents: approximately $25.9 million (or $0.25 per share)

  • Book value of vessels, including advances: approximately $786.5 million (or $7.54 per share)

  • Debt outstanding balance: approximately $185.5 million (or $1.78 per share)

  • Number of Shares Outstanding: 104,274,708

Recent Developments

  • Credit Facility with Sierra Investments Inc.

    Following the closing of the previously announced, $100.0 million private placement and $100.0 million rights offering, on October 25, 2017, the Company's credit facility with Sierra Investments Inc., an entity affiliated with Mr. George Economou, the Company's Chairman and Chief Executive Officer, with an outstanding balance of approximately $73.8 million, was refinanced with a new loan facility secured by assets, and which has a loan to value ratio of 50%, a tenor of 5 years, no amortization and a margin of LIBOR plus 4.5%. No arrangement fees or otherwise were charged in connection with the refinancing.

  • Appointment of new director

    Mr. George Kokkodis was appointed to the Board of the Company as of November 21, 2017. From 2009 to January 2015, Mr. Kokkodis has been an Independent Business Introducer and Independent Client Advisor of financial investments at BNP Paribas (Suisse) SA, where he was a Senior Private Banker from 2003 to 2009 and the Head of the Greek Private Banking Desk at BNP Paribas London from 1999 to 2003. From 1998 to 1999, Mr. Kokkodis served as Vice President of Private Banking at Merrill Lynch International Bank, London UK and, from 1996 to 1998 held the same position at Merrill Lynch Bank Suisse S.A. Prior to that, Mr. Kokkodis was Vice President of Private Banking at Bankers Trust International PLC, London UK from 1993 to 1996. Mr. Kokkodis holds a Bachelor of Science in Aeronautical Engineering from the Imperial College of Science and Technology and a Master of Science in Aeronautical Engineering from the University of Glasgow. Mr. Kokkodis was a member of the board of directors of MIG Real Estate from April 2011 to September 2015. Mr. Kokkodis was a member of the board of directors of Ocean Rig UDW Inc. from September 2015 to November 2017.

    Following the appointment of Mr. Kokkodis, the Company's Board of Directors is now comprised of six directors, four of whom are considered independent under the NASDAQ rules.

Fleet List

The table below describes the Company's fleet as of November 20, 2017, including vessels the Company has agreed to acquire:


                           Year             Gross rate    Redelivery
                          Built    DWT        Per day      Earliest   Latest
                         ------- ------- ---------------- ---------- -------
Drybulk fleet

Panamax:
Bargara                    2002   74,832       Spot           N/A      N/A
Capitola                   2001   74,816       Spot           N/A      N/A
Catalina                   2005   74,432       Spot           N/A      N/A
Ecola                      2001   73,391       Spot           N/A      N/A
Levanto                    2001   73,925       Spot           N/A      N/A
Ligari                     2004   75,583       Spot           N/A      N/A
Maganari                   2001   75,941       Spot           N/A      N/A
Majorca                    2005   74,477       Spot           N/A      N/A
Marbella                   2000   72,561       Spot           N/A      N/A
Mendocino                  2002   76,623       Spot           N/A      N/A
Rapallo                    2009   75,123       Spot           N/A      N/A
Raraka                     2012   76,037       Spot           N/A      N/A
Redondo                    2000   74,716       Spot           N/A      N/A

Newcastlemax:
Bacon                      2013  205,170 T/C Index Linked   Aug-18    Jan-19
Judd                       2015  205,796      $9,350        Dec-17    Apr-18
Marini                     2014  205,854      $19,400       Feb-18    May-18
Morandi                    2013  205,854 T/C Index Linked   Feb-18    May-18

Kamsarmax:
Castellani                 2014   82,129       Spot           N/A      N/A
Kelly                      2017   81,300       Spot           N/A      N/A
Matisse                    2014   81,128       Spot           N/A      N/A
Nasaka                     2014   81,918       Spot           N/A      N/A
Valadon                    2014   81,198       Spot           N/A      N/A

Tanker fleet

Very Large Crude
 Carrier:
Shiraga                    2011  320,105       Spot           N/A      N/A

Suezmax:
                                           $18,000 Base
                                               rate
                                            plus profit
Samsara                    2017  159,855       share        Mar.-22   May-25

Aframax:
Balla                      2017  113,293       Spot           N/A      N/A
Stamos                     2012  115,666       Spot           N/A      N/A


Gas Carrier fleet

Very Large Gas Carriers:
Anderida                   2017   51,850      $30,000       Jun.-22  Jun.-25
Aisling                    2017   51,850      $30,000       Sep.-22  Sep.-25
Mont Fort                  2017   51,850      $28,833       Nov.-27  Nov.-27
Mont Gele (1)              2018   51,850      $28,833       Jan.-28  Jan.-28

(1) Expected to be delivered in January 2018.

Offshore Supply fleet

Platform Supply Vessels:
Crescendo                  2012   1,457       Laid up         N/A      N/A
Colorado                   2012   1,430       Laid up         N/A      N/A
Oil Spill Recovery
 Vessels:
Indigo                     2013   1,401       Laid up         N/A      N/A
Jacaranda                  2012   1,360       Laid up         N/A      N/A
Emblem                     2012   1,363       Laid up         N/A      N/A
Jubilee                    2012   1,317       Laid up         N/A      N/A

Drybulk Carrier, Tanker and Gas Carrier Segments Summary Operating Data
 (unaudited)
(Dollars in thousands, except average daily results)

                                   Three Months Ended    Nine Months Ended
Drybulk                              September 30,         September 30,
                                 --------------------- ---------------------
                                    2016       2017       2016       2017
------------------------------------------- ---------- ---------- ----------
Average number of vessels(1)           19.7       21.8       20.9       16.8
Total voyage days for vessels(2)      1,353      2,002      5,183      4,582
Total calendar days for
 vessels(3)                           1,809      2,002      5,722      4,582
Fleet utilization(4)                  74.8%     100.0%      90.6%     100.0%
Time charter equivalent(5)           $3,442     $8,557     $3,238     $7,323
Vessel operating expenses
 (daily)(6)                          $4,926     $6,085     $4,839     $5,917

                                   Three Months Ended    Nine Months Ended
Tanker                               September 30,         September 30,
                                 --------------------- ---------------------
                                    2016       2017       2016       2017
------------------------------------------- ---------- ---------- ----------
Average number of vessels(1)              -        4.0          -        2.0
Total voyage days for vessels(2)          -        368          -        543
Total calendar days for
 vessels(3)                               -        368          -        543
Fleet utilization(4)                      -     100.0%          -     100.0%
Time charter equivalent(5)                -    $10,932          -    $10,650
Vessel operating expenses
 (daily)(6)                               -     $7,763          -    $11,013

                                   Three Months Ended    Nine Months Ended
Gas Carrier                          September 30,         September 30,
                                 --------------------- ---------------------
                                    2016       2017       2016       2017
------------------------------------------- ---------- ---------- ----------
Average number of vessels(1)              -        1.2          -        0.4
Total voyage days for vessels(2)          -        111          -        114
Total calendar days for
 vessels(3)                               -        111          -        114
Fleet utilization(4)                      -     100.0%          -     100.0%
Time charter equivalent(5)                -    $28,216          -    $27,860
Vessel operating expenses
 (daily)(6)                               -    $15,678          -    $22,447

(1) Average number of vessels is the number of vessels that constituted the Company's fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company's 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 the Company's possession for the relevant period net of dry-docking and laid-up days.

(3) Calendar days are the total number of days the vessels were in the Company's possession for the relevant period including dry-docking days and laid-up days.

(4) Fleet utilization is the percentage of time that the Company's 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. The Company's 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 and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from the Company's vessels, the most directly comparable U.S. GAAP measure, because it assists the Company's management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also 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. Please see below for a reconciliation of TCE rates to voyage revenues.

(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 net of laid-up days for the relevant time period.


Drybulk Carrier, Tanker and Gas Carrier Segments Summary Operating Data
 (unaudited) - continued
(In thousands of U.S. dollars, except for TCE rate, which is expressed in
Dollars, and voyage days)

                                  Three Months Ended     Nine Months Ended
Drybulk                              September 30,         September 30,
                                 --------------------  --------------------
                                    2016       2017       2016       2017
------------------------------------------  ---------  ---------  ---------
Voyage revenues                  $   6,809  $  19,203  $  22,032  $  39,916
Voyage expenses                     (2,152)    (2,072)    (5,251)    (6,364)
                                 ---------  ---------  ---------  ---------
Time charter equivalent revenues $   4,657  $  17,131  $  16,781  $  33,552
                                 ---------  ---------  ---------  ---------
Total voyage days for fleet          1,353      2,002      5,183      4,582
Time charter equivalent (TCE)    $   3,442  $   8,557  $   3,238  $   7,323

                                  Three Months Ended     Nine Months Ended
Tanker                               September 30,         September 30,
                                 --------------------  --------------------
                                    2016       2017       2016       2017
------------------------------------------- ---------  ---------- ---------
Voyage revenues                  $        - $   7,466  $        - $  11,072
Voyage expenses                           -    (3,443)          -    (5,289)
                                 ---------- ---------  ---------- ---------
Time charter equivalent revenues $        - $   4,023  $        - $   5,783
                                 ---------- ---------  ---------- ---------
Total voyage days for fleet               -       368           -       543
Time charter equivalent (TCE)    $        - $  10,932  $        - $  10,650

                                  Three Months Ended     Nine Months Ended
Gas Carrier                          September 30,         September 30,
                                 --------------------  --------------------
                                    2016       2017       2016       2017
------------------------------------------- ---------  ---------- ---------
Voyage revenues                  $        - $   3,266  $        - $   3,316
Voyage expenses                           -      (134)          -      (140)
                                 ---------- ---------  ---------- ---------
Time charter equivalent revenues $        - $   3,132  $        - $   3,176
                                 ---------- ---------  ---------- ---------
Total voyage days for fleet               -       111           -       114
Time charter equivalent (TCE)    $        - $  28,216  $        - $  27,860

                                DryShips Inc.

                            Financial Statements
          Unaudited Condensed Consolidated Statements of Operations

(Expressed in
 Thousands of U.S.
 Dollars except for
 share and per share     Three Months Ended     Nine Months Ended September
 data)                      September 30,                   30,
                      ------------------------  ---------------------------
                          2016         2017          2016           2017
                      -----------  -----------  --------------  -----------

REVENUES:
Voyage revenues       $    12,086  $    29,934  $       42,284  $    58,123
                      -----------  -----------  --------------  -----------
                           12,086       29,934          42,284       58,123

EXPENSES:
Voyage expenses             2,366        5,767           6,364       12,396
Vessel operating
 expenses                   9,041       17,141          36,554       40,375
Depreciation                  872        5,530           2,595        8,632
Vessels impairment,
 loss on sales and
 other                     (4,109)           -          41,836          300
General and
 administrative
 expenses                   7,352        7,843          25,375       23,638
Other, net                    279          241            (482)         681
                      -----------  -----------  --------------  -----------

Operating loss             (3,715)      (6,588)        (69,958)     (27,899)

OTHER INCOME /
 (EXPENSES):
Interest and finance
 costs, net of
 interest income           (1,705)      (3,604)         (7,051)      (8,313)
Loss on private
 placement                      -       (7,600)              -       (7,600)
Other, net                    173         (190)         (2,707)        (521)
                      -----------  -----------  --------------  -----------
Total other expenses,
 net                       (1,532)     (11,394)         (9,758)     (16,434)
                      -----------  -----------  --------------  -----------

Net loss                   (5,247)     (17,982)        (79,716)     (44,333)

Equity in losses of
 Ocean Rig                      -            -         (41,454)           -
                      -----------  -----------  --------------  -----------

Net loss attributable
 to DryShips Inc.     $    (5,247) $   (17,982) $     (121,170) $   (44,333)
                      ===========  ===========  ==============  ===========

Net loss attributable
 to DryShips Inc.
 common stockholders       (5,795)     (15,177)       (121,774)     (41,528)
                      ===========  ===========  ==============  ===========
Loss per common
 share, basic and
 diluted (1)          $(60,364.58) $     (0.42) $(1,739,628.57) $     (3.36)
Weighted average
 number of shares,
 basic and diluted
 (1)                           96   36,186,606              70   12,356,150
(1) Share and per share data for 2016 give effect to a cumulative 1-for-
7,840 reverse stock split between January 23, 2017 and July 21, 2017.

                                DryShips Inc.

               Unaudited Condensed Consolidated Balance Sheets

                                               December 31,   September 30,
(Expressed in Thousands of U.S. Dollars)           2016            2017
                                             --------------- ---------------

ASSETS

  Cash, cash equivalents, including
   restricted cash (current and non-current) $        76,774 $        52,676
  Other current and non-current assets                21,406          80,227
  Advances for vessels under construction                  -          47,758
  Vessels, net                                        95,550         682,223
                                             --------------- ---------------
  Total assets                                       193,730         862,884
                                             =============== ===============


LIABILITIES AND STOCKHOLDERS' EQUITY


  Total debt                                         133,428         240,630
  Total other liabilities                             10,528          14,785
  Total stockholders' equity                          49,774         607,469
                                             --------------- ---------------
  Total liabilities and stockholders' equity $       193,730 $       862,884
                                             =============== ===============

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel and investment impairments and certain other non-cash items as described below and gains or losses on interest rate swaps. Adjusted 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 the Company's calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by the Company's lenders as a credit metric and the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.


The following table reconciles net loss to Adjusted EBITDA:

                                Three       Three       Nine        Nine
                               Months      Months      Months      Months
                                Ended       Ended       Ended       Ended
                              September   September   September   September
(Dollars in thousands)        30, 2016    30, 2017    30, 2016    30, 2017
                             ----------  ----------  ----------  ----------

Net loss attributable to
 DryShips Inc.               $   (5,247) $  (17,982) $ (121,170) $  (44,333)

Add: Net interest expense         1,705       3,604       7,051       8,313
Add: Depreciation                   872       5,530       2,595       8,632
Add: Dry-dockings and class
 survey costs                        14           -         181           -
Add: Impairments losses on
 sales and other                 (4,109)          -      41,836         300
Add: Loss on private
 placement                            -       7,600           -       7,600
Add: Income taxes                     2          61          21          81
Add: Gain on interest rate
 swaps                           (1,112)          -        (403)          -
Add: Equity in losses of
 affiliate                            -           -      41,454           -
                             ----------  ----------  ----------  ----------
Adjusted EBITDA              $   (7,875) $   (1,187) $  (28,435) $  (19,407)
                             ==========  ==========  ==========  ==========

About DryShips Inc.

The Company is a diversified owner of ocean going cargo vessels that operate worldwide. The Company owns a fleet of 36 vessels comprising of (i) 13 Panamax drybulk vessels; (ii) 4 Newcastlemax drybulk vessels; (iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 2 Aframax tankers; (vi) 1 Suezmax tanker; (vii) 4 Very Large Gas Carriers, 1 of which is expected to be delivered in January 2018; and (viii) 6 offshore support vessels, including 2 platform supply and 4 oil spill recovery vessels.

DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."

Visit the Company's website at www.dryships.com

Forward-Looking Statement

Matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with such safe harbor legislation.

Forward-looking statements reflect the Company's 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 the Company's records and other data available from third parties. Although the Company 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 the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include the factors related to the strength of world economies and currencies, general market conditions, including changes in charter rates, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company's inability to procure acquisition financing, default by one or more charterers of the Company's ships, changes in demand for drybulk or LPG commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company's voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Company's relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F, as amended.

Investor Relations / Media:

Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com

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