Aegean Marine Petroleum Network Inc. Announces First Quarter 2010 Financial Results

PIRAEUS, Greece, May 13 /PRNewswire-FirstCall/ -- Aegean Marine Petroleum Network Inc. (NYSE: ANW) today announced financial and operating results for the first quarter ended March 31, 2010.

First Quarter and Year-to-Date Highlights

• Increased sales volumes by 31.3% to 1,720,513 metric tons in Q1 2010, compared to 1,310,037 metric tons for Q1 2009.  
• Expanded net revenues to $55.3 million.
• Recorded operating income of $17.4 million.
• Reported EBITDA (as defined in Note 1) of $23.0 million in Q1 2010.
• Reported net income of $14.1 million, or $0.31 basic and $0.30 diluted earnings per share; net income on an adjusted basis was $0.31 basic and diluted earnings per share.  
• Continued expanding global presence and logistics infrastructure:
  • Closed acquisition of Verbeke Bunkering N.V., further expanding global scale.
  • Took delivery of three double-hull bunkering tankers newbuildings.
  • Acquired double-hull Panamax tanker to be used as floating storage.
  • Announced plans to build an in-land storage facility totalling approximately three million barrels in the United Arab Emirates.
• Completed 4,491,900 share offering, generating net proceeds of approximately $139.0 million.

The Company recorded net income for the three months ended March 31, 2010 of $14.1 million, or $0.31 basic and $0.30 diluted earnings per share. Excluding $160,000 in non-recurring expenses related to the acquisition of Verbeke Bunkering N.V., the Company reported adjusted net income of $0.31 basic and diluted earnings per share. For purposes of comparison, the Company reported net income of $4.4 million, or $0.10 basic and diluted earnings per share, for the three months ended March 31, 2009. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2010 were 46,064,773 and 46,272,718, respectively. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2009 were 42,553,550 and 42,553,550, respectively.

Total revenues for the three months ended March 31, 2010, increased by 130.8% to $843.4 million compared to $365.4 million for the same period in 2009. For the three months ended March 31, 2010, sales of marine petroleum products increased by 132.6% to $839.8 million compared to $361.0 million for the year-earlier period. Net revenue, which equals total revenue less cost of goods sold and cargo transportation expenses, increased 38.3% to $55.3 million in the first quarter of 2009 compared to $40.0 million in the year-earlier period.

For the three months ended March 31, 2010, the volume of marine fuel sold increased by 31.3% to 1,720,513 metric tons compared to 1,310,037 metric tons in the year-earlier period, as sales volumes improved in UAE and Singapore. Furthermore, results for the first quarter of 2010 included sales volumes from Aegean's new markets in the Trinidad and Tobago (April 2009) and Morocco (August 2009).

Operating income for the first quarter of 2010 was $17.4 million compared to $8.3 million for the same period in 2009. Operating expenses, excluding the cost of fuel and cargo transportation costs, increased to $39.8 million for the three months ended March 31, 2010 compared to $31.7 million for the same period in 2009. This increase was principally due to operating an expanded logistics infrastructure during the first quarter of 2010 compared to the first quarter of 2009.

E. Nikolas Tavlarios, President, commented, "We are pleased by our strong start to 2010 as we continue to execute our well-capitalized growth strategy and expand our industry leadership for the physical supply of marine fuel on a worldwide basis. During the first quarter, sales volumes climbed 31.3% compared to the year-earlier period while management strengthened the Company's future prospects. Specifically, we completed the accretive acquisition of Verbeke Bunkering N.V., solidifying our presence in the Antwerp-Rotterdam-Amsterdam region, the world's second largest bunkering market. In addition, we took delivery of three bunkering tanker newbuildings in the first quarter."

Mr. Tavlarios added, "Consistent with our goal to increase sales volumes and ensure we provide reliable service for our customers, we also acquired a double-hull Panamax tanker in the quarter that will be used as floating storage. Complementing our efforts, we are currently developing onshore storage facilities in the UAE, Jamaica and Morocco as we intend to grow our market share in these attractive regions. The substantial success we have achieved in expanding our fully integrated marine fuel solution from procurement to delivery, combined with our significant access to capital, positions Aegean Marine well to drive future performance and strengthen the Company's global brand recognition."

Liquidity and Capital Resources

As of March 31, 2010, the Company had cash and cash equivalents of $138.8 million and working capital of $177.8 million. Non-cash working capital, or working capital excluding cash and debt, was $263.3 million as of March 31, 2010.  

Net cash used in operating activities was $20.8 million for the three months ended March 31, 2010.  Net income, as adjusted for non-cash items, was $21.2 million for the period.  

Net cash used in investing activities was $56.3 million for the three months ended March 31, 2010, mainly due to advances from acquired vessel payments of $24.6 million.  

Net cash provided by financing activities was $161.2 million for the three months ended March 31, 2010, primarily driven by $139.0 in net proceeds from the 4,491,900 share offering.

As of March 31, 2010, the Company had approximately $164.0 million in available liquidity to finance working capital requirements, which includes unrestricted cash and cash equivalents and available undrawn amounts under the Company's short-term working capital facilities.  Furthermore, as of March 31, 2010, the Company had funds of approximately $48.3 million available under its secured term loans to finance the construction of its new double-hull bunkering tankers.

Spyros Gianniotis, Chief Financial Officer, stated, "Our strong results for the first quarter of 2010 were led by sales volumes growth in Singapore and the U.A.E. as well as contributions from new markets in Morocco and Trinidad and Tobago. During the quarter, we strengthened our balance sheet by completing a share offering that generated net proceeds of approximately $139.0 million, underscoring our short-term and long-term prospects. Our considerable financial strength provides a significant competitive advantage for our Company. Going forward, we intend to capitalize on additional consolidation opportunities under favorable terms that further expand our leading role as a global independent supplier of marine fuel and increase our earnings potential for the benefit of shareholders."

1. EBITDA represents 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 the 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 the Company assesses its operating performance and because 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 income to EBITDA for the periods presented:

2. Sales volume of marine fuel is the volume of sales of various classifications of MFO and MGO for the relevant period and is denominated in metric tons. The Company does not use the sales volume of lubricants as an indicator.

The Company's markets include its physical supply operations in the United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe, Ghana, Vancouver, Montreal, Mexico, Portland (U.K.), Trinidad and Tobago (Southern Caribbean), Tangiers (Morocco), and Greece, where the Company conducts operations through its related company, Aegean Oil.  

3. Bunkering fleet comprises both bunkering vessels and barges.  

4. Figure represents average bunkering fleet number for the relevant period, as measured by the sum of the number of days each bunkering tanker or barge was used as part of the fleet during the period divided by the cumulative number of calendar days in the period multiplied by the number of bunkering tankers at the end of the period.   This figure does not take into account non-operating days due to either scheduled or unscheduled maintenance.

5. Special Purpose Vessels consists of the Orion, a 550 dwt tanker which is based in our Greek market.  

6. The Company operates two Panamax tankers, the Ouranos and the Fos, and one Aframax tanker, the Leader as floating storage facilities in the United Arab Emirates, Ghana and Gibraltar respectively. Additionally, the Company operates a barge, the Mediterranean, as a floating storage facility in Greece and also has an on-land storage facility in Portland.

The ownership of storage facilities allows the Company to mitigate its risk of supply shortages. Generally, storage costs are included in the price of refined marine fuel quoted by local suppliers. The Company expects that the ownership of storage facilities will allow it to convert the variable costs of this storage fee mark-up per metric ton quoted by suppliers into fixed costs of operating its owned storage facilities, thus enabling the Company to spread larger sales volumes over a fixed cost base and to decrease its refined fuel costs.

7. Working capital is defined as current assets minus current liabilities. Working capital excluding cash and debt is defined as current assets minus cash and cash equivalents minus restricted cash minus current liabilities plus short-term borrowings plus current portion of long-term debt.

First Quarter 2009 Dividend Announcement

On May 12, 2010, the Company's Board of Directors declared a first quarter 2010 dividend of $0.01 per share payable on June 10, 2010, to shareholders of record as of May 27, 2010. The dividend amount was determined in accordance with the Company's dividend policy of paying cash dividends on a quarterly basis subject to factors including the requirements of Marshall Islands law, future earnings, capital requirements, financial condition, future prospects and such other factors as are determined by the Company's Board of Directors. The Company anticipates retaining most of its future earnings, if any, for use in operations and business expansion.

Conference Call and Webcast Information

Aegean Marine Petroleum Network Inc. will conduct a conference call and simultaneous Internet webcast at 8:30 a.m. ET on Thursday, May 13, 2010, to discuss its first quarter results.  Investors may access the webcast and related slide presentation, by visiting the Company's website at www.ampni.com, and clicking on the webcast link.  The conference call also may be accessed via telephone by dialing (888) 296-4302 (for U.S.-based callers) or (719) 785-1767 (for international callers) and enter the passcode: 3156493.

A replay of the webcast will be available soon after the completion of the call and will be accessible on www.ampni.com.  A telephone replay will be available through Thursday, May 27, 2010, by dialing 888-203-1112 (for U.S.-based callers) or 719-457-0820 (for international callers) and enter the passcode: 3156493.

About Aegean Marine Petroleum Network Inc.

Aegean Marine Petroleum Network Inc. is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The Company procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors and leading cruise lines. Currently, Aegean has a global presence in more than 15 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, West Africa, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates, Singapore, Morocco and the Antwerp-Rotterdam-Amsterdam (ARA) region.

Cautionary Statement Regarding Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements.  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.  Forward-looking statements 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 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 this safe harbor legislation. The words "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "may," "should," "expect" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include our ability to manage growth, our ability to maintain our business in light of our proposed business and location expansion, our ability to obtain double hull secondhand bunkering tankers, the outcome of legal, tax or regulatory proceedings to which we may become a party, adverse conditions in the shipping or the marine fuel supply industries, our ability to retain our key suppliers and key customers, material disruptions in the availability or supply of crude oil or refined petroleum products, changes in the market price of petroleum, including the volatility of spot pricing, increased levels of competition, compliance or lack of compliance with various environmental and other applicable laws and regulations, our ability to collect accounts receivable, changes in the political, economic or regulatory conditions in the markets in which we operate, and the world in general, our failure to hedge certain financial risks associated with our business, our ability to maintain our current tax treatments and our failure to comply with restrictions in our credit agreements and other factors.  Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

A copy of the Company's interim unaudited consolidated financial statements along with this press release have been filed today with the U.S. Securities and Exchange Commission on Form 6-K and are available on the SEC's website, www.sec.gov.

SOURCE Aegean Marine Petroleum Network Inc.