Third Quarter Sales Volumes Increase 22.1%

PIRAEUS, Greece, Nov. 11 /PRNewswire-FirstCall/ -- Aegean Marine Petroleum Network Inc. (NYSE: ANW) today announced financial and operating results for the third quarter ended September 30, 2009.

Third Quarter and Year-to-Date Highlights

• Increased sales volumes by 22.1% to 1,635,473 metric tons in Q3 2009, compared to 1,338,914 metric tons for Q3 2008.
• Expanded net revenues to $52.2 million.
• Recorded operating income of $17.2 million.
• Reported net income of $14.1 million, or $0.33 basic and diluted earnings per share.
• Secured a new $50 million credit facility, increasing total access to $340 million in senior secured revolving credit facilities.
• Continued expanding global presence and infrastructure:
  • Initiated operations in Tangiers, Morocco.
  • Received delivery of 2 newbuild double-hull bunkering tankers during the quarter.
    

The Company recorded net income of $14.1 million, or $0.33 basic and diluted earnings per share, for the three months ended September 30, 2009. For purposes of comparison, the Company reported net income of $9.5 million, or $0.22 basic and diluted earnings per share for the three months ended September 30, 2008. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2009 were 42,588,483 and 42,835,526, respectively. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2008 were 42,505,507 and 42,640,765, respectively.

Total revenues for the three months ended September 30, 2009, decreased by 22.6% to $736.1 million compared to $950.6 million for the same period in 2008. For the three months ended September 30, 2009, sales of marine petroleum products decreased by 22.9% to $731.8 million compared to $948.6 million for the year-earlier period. Net revenue, which equals total revenue less cost of goods sold and cargo transportation expenses, increased 12.5% to $52.2 million in the third quarter of 2009 compared to $46.4 million in the year-earlier period.

Results for the third quarter of 2009 were primarily driven by a 7.9% increase in the gross spread on marine petroleum products to $47.9 million compared to $44.4 million for the same period in 2008. For the three months ended September 30, 2009, the volume of marine fuel sold increased by 22.1% to 1,635,473 metric tons compared to 1,338,914 metric tons in the year-earlier period, as sales volumes improved in Greece, Gibraltar, the U.A.E., and Singapore. Furthermore, results for the third quarter of 2009 included increased sales volumes from Aegean's newer markets. During the three months ended September 30, 2009, the gross spread per metric ton of marine fuel sold decreased to $28.9 per metric ton, compared to $32.8 per metric ton in the year-earlier period.

Operating income for the third quarter of 2009 was $17.2 million, compared to $15.1 million for the same period in 2008. Operating expenses, excluding the cost of fuel and cargo transportation costs (both of which are included in the calculation of gross spread on marine petroleum products explained above), increased to $35.0 million for the three months ended September 30, 2009 compared to $31.3 million for the same period in 2008. This increase was principally due to the expanded logistics infrastructure during the third quarter of 2009 compared to the third quarter of 2008.

E. Nikolas Tavlarios, President, commented, "During the third quarter, we continued to take advantage of our strong capital position and strengthen our leading industry brand, enabling Aegean to once again post solid results for shareholders. Highlighting our success, we increased sales volumes by 22.1% for the three months ended September 30, 2009 compared to the year-earlier period. While actively managing counterparty risk during a challenging economic environment, we further expanded our industry leadership in the quarter. Specifically, we commenced operations in Tangiers, Morocco, the third new market launched by Aegean in 2009 and ninth since going public in December 2006. In addition to increasing our global scale, we expanded our high-quality logistics infrastructure with the delivery of nine double-hull bunkering vessels to date in 2009, including two newbuildings in the third quarter. Consistent with our goal to capitalize on the strong demand for modern tonnage, we plan to take delivery of 17 remaining newbuildings by the end of next year. With a growing infrastructure for the worldwide delivery of marine fuel, we expect to continue to increase Aegean's global market share and drive future sales volumes."

For the nine months ended September 30, 2009, the Company recorded net income of $34.8 million, or $0.82 basic and diluted earnings per share, compared to net income of $26.8 million, or $0.63 basic and diluted earnings per share, for the year-earlier period. The weighted average basic and diluted shares outstanding for the nine month period ended September 30, 2009 were 42,573,082 and 42,601,423, respectively. The weighted average basic and diluted shares outstanding for the nine months ended September 30, 2008 were 42,490,780 and 42,643,124, respectively.

Total revenues for the nine months ended September 30, 2009 decreased by 26.1% to $1,644.1 million compared to $2,223.6 million for the same period a year ago. For the nine months ended September 30, 2009, sales of marine petroleum products decreased by 26.5% to $1,631.0 million compared to $2,217.6 million for the same period in 2008. Net revenues for the nine months ended September 30, 2009 were $139.4 million as compared to $121.4 million in the year-earlier period.

Results for the nine months ended September 30, 2009 were led by an 9.5% increase in the gross spread on marine petroleum products to $126.3 million compared to $115.3 million for the same period a year ago. For the nine months ended September 30, 2009, the volume of marine fuel sold increased 22.4% to 4,444,447 metric tons compared to 3,631,486 metric tons in the year-earlier period. During the nine months ended September 30, 2009, the gross spread per metric ton of marine fuel sold decreased by $3.5 to $28.0 per metric ton, compared to $31.5 per metric ton for the same period a year ago.

Operating income for the nine months ended September 30, 2009 was $43.1 million compared to $36.0 million for the same period in 2008.

Liquidity and Capital Resources

As of September 30, 2009, the Company had cash and cash equivalents of $50.3 million and working capital of $198.5 million. Non-cash working capital, or working capital excluding cash and debt, was $213.4 million as of September 30, 2009.

Net cash provided by operating activities was $9.6 million for the three months ended September 30, 2009. Net income, as adjusted for non-cash items, was $21.3 million for the period.

Net cash used in investing activities was $20.5 million for the three months ended September 30, 2009, and was composed of payments relating to advances for both vessels under construction and second-hand acquisitions.

Net cash provided by financing activities was $34.0 million for the three months ended September 30, 2009, driven by both an increase in short-term borrowings and an increase in long-term debt financing relating to newbuild vessels.

As of September 30, 2009, the Company had approximately $85.8 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 September 30, 2009, the Company had funds of approximately $70.4 million available under its secured term loans to finance the construction of its new double-hull bunkering tankers.

Spyros Gianniotis, Chief Financial Officer, stated, " Aegean's financial results for the third quarter reflect sales volume growth in core markets located in Greece, Gibraltar, the UAE and Singapore as well as contributions from new markets. Our notable performance demonstrates management's ability to increase sales volumes while maintaining a prudent approach in extending credit to customers. During the quarter, we also secured a new $50 million credit facility under attractive terms, once again enhancing our leading competitive position. Our significant financial liquidity, including credit facilities totalling $320 million and $50.3 million in cash, bodes well for Aegean to further expand its long-term earnings potential as we continue to execute our growth strategy."

    Summary Consolidated Financial and Other Data (Unaudited)


                                         For the             For the
                                   Three Months Ended    Nine Months Ended
                                      September 30,        September 30,
                                  -------------------  --------------------
                                     2008      2009       2008       2009
                                  --------- ---------  ---------  ---------

                                        (in thousands of U.S. dollars,
                                            unless otherwise stated)
    Income Statement Data:
    Sales of marine petroleum
     products                      $948,569  $731,802 $2,217,570 $1,630,968
    Voyage and other revenues         2,007     4,276      6,054     13,095
                                  --------- ---------  ---------  ---------
    Total revenues                  950,576   736,078  2,223,624  1,644,063
    Cost of marine petroleum
     products sold                  900,388   682,465  2,092,669  1,501,179
    Salaries, wages and related
     costs                           10,594    11,848     29,384     34,341
    Depreciation and
     amortization                     4,366     5,503     11,858     15,580
    Gain on sale of vessel                -                    -     (4,185)
    All other operating expenses     20,171    19,085     53,736     54,055
                                  --------- ---------  ---------  ---------
    Operating income                 15,057    17,177     35,977     43,093
    Net financing cost                3,090     2,737      7,919      7,195
    FX losses (gains), net            1,629       123        325        339

    Income taxes                        883       210        890        733
                                  ========= =========  =========  =========
    Net income                       $9,455   $14,107    $26,843    $34,826
                                  ========= =========  =========  =========

    Basic earnings per share
     (U.S. dollars)                   $0.22     $0.33      $0.63      $0.82
    Diluted earnings per share
     (U.S. dollars)                   $0.22     $0.33      $0.63      $0.82

    Other Financial Data:
    Gross spread on marine
     petroleum products(1)          $44,377   $47,910   $115,332   $126,319
    Gross spread on
     lubricants(1)                      527       670        964      1,985
    Gross spread on marine
     fuel(1)                         43,850    47,240    114,368    124,334
    Gross spread per metric
     ton of marine fuel
     sold (U.S. dollars) (1)           32.8      28.9       31.5       28.0
    Net cash provided by (used
     in) operating activities        27,403     9,563     48,892    (70,214)
    Net cash used in investing
     activities                      56,866    20,538    108,973     55,749
    Net cash provided by
     financing activities           $43,517   $33,996    $88,224   $129,373

    Sales Volume Data
     (Metric Tons): (2)
                                  --------- ---------  ---------  ---------
    Total sales volumes           1,338,914 1,635,473  3,631,486  4,444,447
                                  --------- ---------  ---------  ---------

    Other Operating Data:
    Number of bunkering
     tankers, end of period(3)         26.0      35.0       26.0       35.0
    Average number of
     bunkering tankers(3)(4)           26.5      34.5       22.4       32.4
    Special Purpose Vessels,
     end of period number(5)            1.0       1.0        1.0        1.0
    Number of owned storage
     facilities, end of
     period(6)                          3.0       4.0        3.0        4.0



    Summary Consolidated Financial and Other Data (Unaudited)


                                               As of               As of
                                        December 31, 2008   September 30, 2009
                                        -----------------   ------------------

                                           (in thousands of U.S. dollars,
                                              unless otherwise stated)

    Balance Sheet Data:
    Cash and cash equivalents                    46,927           50,337
    Gross trade receivables                     132,589          279,540
    Allowance for doubtful accounts              (1,323)          (1,641)
    Inventories                                  55,330          105,785
    Current assets                              251,387          461,458
    Total assets                                641,907          908,476
    Trade payables                               90,279          181,189
    Current liabilities (including
     current portion of long-term debt)         202,022          262,921
    Total debt                                  253,621          385,382
    Total liabilities                           356,904          587,593
    Total stockholder's equity                  285,003          320,883

    Working Capital Data:
    Working capital(7)                           49,365          198,537
    Working capital excluding cash and
     debt(7)                                    100,158          213,440

    1.  Gross spread on marine petroleum products represents the margin the
        Company generates on sales of marine fuel and lubricants.  Gross
        spread on marine fuel represents the margin that the Company generates
        on sales of various classifications of marine fuel oil ("MFO") or
        marine gas oil ("MGO"). Gross spread on lubricants represents the
        margin that the Company generates on sales of lubricants. The Company
        calculates the above-mentioned gross spreads by subtracting from the
        sales of the respective marine petroleum product the cost of the
        respective marine petroleum product sold and cargo transportation
        costs. For arrangements in which the Company physically supplies the
        respective marine petroleum product using its bunkering tankers, costs
        of the respective marine petroleum products sold represents amounts
        paid by the Company for the respective marine petroleum product sold
        in the relevant reporting period. For arrangements in which the
        respective marine petroleum product is purchased from the Company's
        related company, Aegean Oil S.A., or Aegean Oil, cost of the
        respective marine petroleum products sold represents the total amount
        paid by the Company to the physical supplier for the respective marine
        petroleum product and its delivery to the customer. For arrangements
        in which the Company purchases cargos of marine fuel for its floating
        storage facilities, transportation costs may be included in the
        purchase price of marine fuels from the supplier or may be incurred
        separately from a transportation provider.

        Gross spread per metric ton of marine fuel sold represents the margin
        the Company generates per metric ton of marine fuel sold. The Company
        calculates gross spread per metric ton of marine fuel sold by dividing
        the gross spread on marine fuel by the sales volume of marine fuel.
        Marine fuel sales do not include sales of lubricants. The following
        table reflects the calculation of gross spread per metric ton of
        marine fuel sold for the periods presented:



    Summary Consolidated Financial and Other Data (Unaudited)

                                       For the                For the
                                  Three Months Ended     Nine Months Ended
                                  September 30, 2009     September 30, 2009
                                 -------------------   ----------------------
                                    2008      2009        2008        2009
                                 ---------  ---------  ---------    ---------

                                        (in thousands of U.S. dollars,
                                           unless otherwise stated)

    Sales of marine
     petroleum products            948,569    731,802  2,217,570    1,630,968
     Less: Cost of marine
      petroleum products sold     (900,388)  (682,465)(2,092,669)  (1,501,179)
     Less: Cargo
      transportation costs          (3,804)    (1,427)    (9,569)      (3,470)
                                 ---------  ---------  ---------    ---------
    Gross spread on marine
     petroleum products             44,377     47,910    115,332      126,319
                                 ---------  ---------  ---------    ---------
     Less: Gross spread on
      lubricants                      (527)      (670)      (964)      (1,985)
                                 ---------  ---------  ---------    ---------
    Gross spread on marine fuel     43,850     47,240    114,368      124,334
                                 =========  =========  =========    =========

    Sales volume of marine
     fuel (metric tons)          1,338,914  1,635,473  3,631,486    4,444,447

    Gross spread per metric
     ton of marine
     fuel sold (U.S. dollars)         32.8       28.9       31.5         28.0
                                 ---------  ---------  ---------    ---------


        The amount that the Company has to pay for marine petroleum products
        to fulfill a customer order has been the primary variable in
        determining the prices quoted to customers. Therefore, the Company
        evaluates gross spread per metric ton of marine fuel sold in pricing
        individual transactions and in long-term strategic pricing decisions.
        The Company actively monitors its pricing and sourcing strategies in
        order to optimize its gross spread on marine petroleum products. The
        Company believes that this measure is important to investors because
        it is an effective intermediate performance measure of the strength of
        the Company's operations.

        Gross spread on marine petroleum products, including gross spread on
        marine fuel and gross spread on lubricants, and gross spread per
        metric ton of marine fuel sold should not be considered as
        alternatives to operating income, net income or other GAAP measures
        and may not be comparable to similarly titled measures of other
        companies. These measures do not reflect certain direct or indirect
        costs of delivering marine petroleum products to the Company's
        customers (such as crew salaries, vessel depreciation, storage costs,
        other vessel operating expenses or overhead costs) or other costs of
        doing business.

        For all periods presented, the Company purchased marine petroleum
        products in Greece from its related company, Aegean Oil, which is a
        physical supplier in Greece. The cost of these marine petroleum
        products was contractually calculated based on Aegean Oil's actual
        cost of these products plus a margin.

    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, 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, one
        Aframax tanker, the Leader, and one general purpose tanker, the Aegean
        IX, as floating storage facilities in the United Arab Emirates, Ghana,
        Gibraltar, and Jamaica, respectively.

        The ownership of floating 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 floating 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.

Third Quarter 2009 Dividend Announcement

On November 11, 2009, the Company's Board of Directors declared a third quarter 2009 dividend of $0.01 per share payable on December 3, 2009, to shareholders of record as of November 12, 2009. 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, November 12, 2009, to discuss its third 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) 218-8170 (for U.S.-based callers) or (913) 312-1415 (for international callers) and enter the passcode: 2936470.

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, November 26, 2009, by dialing 888-203-1112 (for U.S.-based callers) or 719-457-0820 (for international callers) and enter the passcode: 2936470.

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 14 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, West Africa, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates, Singapore and Tangiers, Morocco.

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.

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