Navios Maritime Holdings Inc. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2010

PIRAEUS, Greece, Aug. 19 /PRNewswire-FirstCall/ -- Navios Maritime Holdings Inc. ("Navios Holdings") (NYSE: NM), a global, vertically integrated seaborne shipping and logistics company, today reported financial results for the second quarter and six months ended June 30, 2010.

Angeliki Frangou, Chairman and CEO of Navios Holdings stated, "We continue to benefit from our strategy of fixing the fleet for long-term periods with quality counter parties.  In Q2 2010, we earned almost $91.0 million of EBITDA and $46.5 million of net income.  We also remain one of the few dividend paying companies in the dry bulk sector, and declared a $.06 dividend per share for Q2 2010."  

Ms. Frangou continued, "The global economy has improved significantly over the past year, driven primarily by healthy industrial production in emerging countries. More recently, developed countries are experiencing sluggish growth. This development, coupled with a significant order book, makes us cautious in our outlook.  As a result, we are focused on the operating fundamentals of our drybulk business and on maintaining a healthy balance sheet.  We want to be positioned to weather unexpected volatility and take advantage of opportunities."

2010 HIGHLIGHTS - RECENT DEVELOPMENTS

Navios Holdings' Core Fleet Highlights

Vessel Sales

On August 5, 2010, Navios Holdings sold to an unrelated third party the Vanessa, a 2002 Handysize product tanker vessel for $18.3 million in cash.

On May 21, 2010, Navios Holdings sold to Navios Maritime Partners L.P. (“Navios Partners”) the vessel Navios Pollux, a 2009 Capesize vessel for $110.0 million in cash.

Liquidity

Net Debt to Total Capitalization was 48.1% on June 30, 2010 (47.9% including Navios Maritime Acquisition Corporation ("Navios Acquisition")). Navios Holdings' total available liquidity, including bank lines, at June 30, 2010 was approximately $359.5 million (excluding Navios Acquisition).  Navios Holdings has no unfunded capital expenditures for 2010.  In addition, Navios Holdings debt maturities (excluding Navios Acquisition) are anticipated to be less than $43.5 million and $101.1 million for the remainder of 2010 and all of 2011, respectively.

On August 12, 2010, Navios Holdings received $5.5 million as a dividend distribution from its affiliate, Navios Partners.

Time Charter Coverage

Navios Holdings has long-term fleet employment for periods ranging from one to 12 years. As of August 18, 2010, Navios Holdings had contracted 97.5%, 70.4%, 57.4% and 45.6% of its available days on a charter-out basis for 2010, 2011, 2012 and 2013, respectively, equivalent to $299.6 million, $297.5 million, $265.0 million and $225.3 million in revenue, respectively. The average contractual daily charter-out rate for the core fleet is $26,938, $30,763, $32,876 and $33,707 for 2010, 2011, 2012 and 2013, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2010 is $10,113.

The above figures do not include Navios South American Logistics Inc. (“Navios Logistics”) fleet and vessels servicing the Contracts of Affreightment (“COA”).

Navios Acquisition  

As of May 28, 2010, Navios Holdings owned 12,372,551 shares, or 57.3%, of the outstanding common stock of Navios Acquisition. Thus from that date onwards, Navios Holdings consolidated the operations of Navios Acquisition for financial statement presentation purposes.

On June 29, 2010 and July 2, 2010, Navios Acquisition took delivery of the Colin Jacob and Ariadne Jacob, two LR1 product tankers, built in 2007, and immediately commenced three-year time charters at a rate of $17,000 net per day, plus profit sharing.

On July 19, 2010, Navios Acquisition announced that it had signed a Securities Purchase Agreement that contemplates the acquisition of a fleet of seven very large crude carrier ("VLCC") tankers for an aggregate purchase price of $587.0 million. Navios Acquisition intends to finance the acquisition as follows: $453.0 million with new debt financing, $123.0 million with cash and $11.0 million through the future issuance of Navios Acquisition shares. The transaction is anticipated to close in September 2010.

On July 27, 2010, Navios Acquisition announced that it is offering (the "Offer") the holders of the 25,300,000 outstanding warrants issued in its initial public offering ("Public Warrants") the limited time opportunity to acquire shares of common stock at a reduced exercise price. The Offer is coupled with a consent solicitation accelerating Navios Holdings' ability to exercise certain warrants on terms identical to the Public Warrants. Under the terms of the Offer, Warrant holders may exercise Public Warrants (i) on a cash basis, at an exercise price of $5.65 per share of common stock and (ii) on a cashless basis, at an exchange rate of 4.25 Public Warrants for 1.0 share of common stock. A warrant holder may use one or both methods in exercising all or a portion of its Public Warrants. The Offer has several conditions, including that at least (1) 75% of the Public Warrants outstanding (18,975,000 Public Warrants) are properly exercised and (2) 15% of the Public Warrants outstanding (3,795,000 Public Warrants) are exercised on a cash basis. Both conditions, along with the other conditions, may be waived by Navios Acquisition at its discretion. Upon consummation of the Offer, Navios Holdings and Angeliki Frangou, will exercise the warrants that they own for cash for aggregated gross proceeds of $78.2 million. The Offer commenced on July 27, 2010 and continues for a period of 20 business days, expiring on August 23, 2010 at 11:59 p.m., New York City time (the "Offer Period"). Upon termination of the Offer, the Public Warrants will expire according to their terms on June 25, 2013, subject to earlier redemption as outlined in terms of the Public Warrants

Fleet Profile

Navios Holdings controls a fleet of 59 vessels totaling 6.4 million dwt, of which 31 are owned and 28 are chartered-in under long-term charters. Navios Holdings currently operates 39 vessels (12 Capesize, 11 Panamax and 16 Ultra-Handymax) totaling 3.8 million dwt and has scheduled 20 newbuildings to be delivered. These vessels are expected to be delivered at various dates through 2013. The average age of the operating fleet is 4.8 years.

Exhibit II displays the "Core Fleet" profile of Navios Holdings and refers to drybulk vessel operations (excludes fleet of Navios Acquisition and Navios Logistics).

Financial Highlights

• Net income increased by 110.1% to $46.5 million in the second quarter of 2010 from $22.1 million in the same period in 2009.
• EBITDA increased by 70.4% to $91.0 million in the second quarter of 2010 from $53.4 million in the same period in 2009.
• Stockholders' equity increased by 8.6% to $1,005.1 million at June 30, 2010 compared to $925.5 million at December 31, 2009.

Dividend Policy

The Board of Directors declared a quarterly cash dividend for the second quarter of 2010 of $0.06 per share of common stock. This dividend is payable on October 6, 2010 to stockholders of record as of September 22, 2010.  The declaration and payment of any further dividend remains subject to the discretion of the Board and will depend on, among other things, Navios Holdings' cash requirements as measured by market opportunities and restrictions under its credit agreements.  

Financial Results

For the following results and the selected financial data presented herein, Navios Holdings has compiled consolidated statements of income for the three and six month periods ended June 30, 2010 and 2009. The information was derived from the unaudited consolidated financial statements for the respective periods. EBITDA is a non-US GAAP financial measure and should not be used in isolation or substitution for Navios Holdings' results.

Revenue, EBITDA and Net income of Navios Acquisition for the three and six month periods ended June 30, 2010 were below $0.1 million each.

Second Quarter 2010 Results (in thousands of U.S. dollars, unless otherwise stated, except per share data):

Revenue from drybulk vessel operations for the three months ended June 30, 2010 was $113.8 million as compared to $107.1 million for the same period during 2009. The increase in revenue was mainly attributable to the increase in the available days of the fleet of 5.2 % to 3,915 days in the second quarter of 2010 from 3,721 days in the same period of 2009. The increase of 194 available days was due to an increase of 546 available days primarily as a result of the delivery of nine newbuilding owned vessels during the last three quarters of 2009 and the first quarter of 2010 This increase was offset by a decrease in short-term and long-term fleet available days of 302 days and 50 days, respectively. The increase in revenue was partially offset by a slight decrease in Time Charter Equivalent ("TCE") per day of 0.9% to $26,431 per day in the second quarter of 2010 from $26,684 per day in the same period of 2009.

Revenue from the logistics business was approximately $51.6 million for the three months ended June 30, 2010 as compared to $35.1 million during the same period of 2009. This increase was mainly attributable to (a) the acquisition of Makenita H in June 2009, which was fully operational during the second half of 2010, (b) the acquisition of Sara H in February 2010, (c) the increased operations of its liquid port and (d) the increased storage capacity of its dry port in Uruguay following the construction of its new silo.

EBITDA for the three months ended June 30, 2010 increased by $37.6 million to $91.0 million compared to $53.4 million for the second quarter of 2009. The $37.6 million increase in EBITDA was primarily due to (i) an increase in revenue of $23.2 million to $165.4 million in the second quarter of 2010 from $142.2 million in the same period of 2009, (ii) an increase of $5.2 million in gains from derivatives, (iii) an increase of $6.8 million in net other income/expense, (iv) the $17.7 million gain on fair value of Navios Acquisition investment and (v) an increase in equity in net earnings from affiliated companies by $2.8 million. The overall variance of $55.7 million was offset by (i) an increase in time charter, voyage and logistic business expenses of $0.8 million from $82.9 million in the second quarter of 2009 to $83.7 million in the same period of 2010, (ii) an increase in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) of $1.6 million, (iii) an increase in general and administrative expenses of $0.7 million (excluding share based compensation expenses), as well as (iv) a decrease in gain on sale of assets by $15.0 million

EBITDA of Navios Logistics was $10.3 million for the three months ended June 30, 2010 as compared to $8.6 million during the same period in 2009.

Net income for the three months ended June 30, 2010 was $46.5 million as compared to $22.1 million for the comparable period of 2009.  The increase of net income by $24.4 million was mainly due to a $37.6 million increase in EBITDA discussed above. This increase was offset by the increase in depreciation and amortization of $6.0 million, the increase in interest expense of $6.3 million and the decrease in income taxes of $0.9 million.

First Half of 2010 Results (in thousands of U.S. dollars, unless otherwise stated, except per share data):

Revenue from drybulk vessel operations for the six months ended June 30, 2010 was $232.0 million as compared to $224.9 million for the same period during 2009. The increase in revenue was mainly attributable to (a) the increase in the available days of the fleet of 6.7% to 8,108 days in the first half of 2010 from 7,601 days in the same period of 2009. This was partially offset by the decrease in Time Charter Equivalent ("TCE") per day of 7.7% to $25,424 in first half of 2010 from $27,544 per day in the same period of 2009. The increase of 507 available days was mainly attributable to an increase of 1,245 available days primarily as a result of the delivery of nine newbuilding owned vessels during the last three quarters of 2009 and the first quarter of 2010. This increase was offset by a decrease in short-term and long-term fleet available days of 356 days and 382 days, respectively.

Revenue from the logistics business was approximately $87.8 million for the six months ended June 30, 2010 as compared to $64.4 million during the same period of 2009. This increase was mainly attributable to (a) the acquisition of Makenita H in June 2009, which was fully operational during the second half of 2010, (b) the acquisition of Sara H in February 2010, (c) the increased operations of its liquid port and (d) the increased storage capacity of its dry port in Uruguay following the construction of its new silo.

EBITDA for the six months ended June 30, 2010 increased by $73.2 million to $169.0 million compared to $95.8 million for the second half of 2009. The $73.2 million increase in EBITDA was primarily due to (i) an increase in revenue of $30.4 million to $319.8 million in the first half of 2010 from $289.4 million in the same period of 2009, (ii) a decrease of $3.8 million in time charter, voyage and logistic business expenses, (iii) an increase of $3.4 million in gains from derivatives, (iv) an increase of $4.2 million in net other income/expense, (v) an increase of $17.7 million in gain on fair value of investment of Navios Acquisition, (vi) an increase in gain on sale of assets by $9.3 million, (vii) a decrease in noncontrolling interest of $1.3 million and (viii) an increase in equity in net earnings from affiliated companies of $9.3 million. The overall variance of $79.4 million was offset by (i) an increase in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) of $3.8 million and (ii) an increase in general and administrative expenses of $2.4 million (excluding share based compensation expenses).

EBITDA of Navios Logistics was $14.4 million for the six months ended June 30, 2010 and 2009.

Net income for the six months ended June 30, 2010 was $77.8 million as compared to $34.1 million for the comparable period of 2009.  The increase of net income of $43.7 million was mainly due to $73.2 million increase in EBITDA discussed above. This increase was offset by an increase in depreciation and amortization of $15.4 million, an increase in interest expense of $13.3 million and a decrease in income taxes of $0.8 million.

Fleet Summary Data:

The following table reflects certain key indicators indicative of the performance of the Navios Holdings and its fleet performance for the three and six month periods ended June 30, 2010 and 2009.  

Conference Call:

Thursday, August 19, 2010, at 8:30 EDT, at which time members of senior management will discuss the results of the second quarter and six months ended June 30, 2010.

A supplemental slide presentation will be available on the Navios Holdings website at http://www.navios.com under the "Investors" section at 7:45 am EDT today.

The conference call replay will be available shortly after the live call and remain available for one business week at the following numbers:

This call will be simultaneously Webcast at the following Web address: http://www.videonewswire.com/event.asp?id=71789. The Webcast will be archived and available at this same Web address for two business weeks following the call.

About Navios Maritime Holdings Inc.

Navios Maritime Holdings Inc. is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of drybulk commodities including iron ore, coal and grain.

Navios Holdings may, from time to time, be required to offer certain owned Capesize and Panamax vessels to Navios Maritime Partners L.P. for purchase at fair market value according to the terms of the Omnibus Agreement.

For more information about Navios Holdings please visit its website: www.navios.com.

About Navios South American Logistics Inc.

Navios Logistics was formed in 2008 through the acquisition of control of the Horamar Group, established in 1975. Navios Logistics specializes in transporting and storing liquid and dry bulk cargoes in the Hidrovia region connecting Argentina, Bolivia, Brazil, Paraguay and Uruguay. Navios Logistics currently controls a fleet of 223 barges and vessels. It also owns and operates an upriver oil storage and transfer facility in Paraguay and the largest bulk transfer and storage port terminal in Uruguay.

About Navios Maritime Partners L.P.

Navios Maritime Partners L.P. (NYSE: NMM) is a publicly traded master limited partnership which owns and operates dry cargo vessels. For more information, please visit its website: www.navios-mlp.com.

About Navios Maritime Acquisition Corporation

Navios Maritime Acquisition Corporation (NYSE: NNA) is an owner and operator of tanker vessels focusing in the transportation of petroleum products (clean and dirty) and bulk liquid chemicals. For more information about Navios Acquisition, please visit its website: www.navios-acquisition.com.

Forward Looking Statements - Safe Harbor

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios Holdings' growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenues and time charters. Although Navios Holdings believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Holdings. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which Navios Holdings operates; risks associated with operations outside the United States; and other factors listed from time to time in Navios Holdings' filings with the Securities and Exchange Commission. Navios Holdings expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Holdings' expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Disclosure of Non-GAAP Financial Measures

EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes, if any, unless otherwise stated. EBITDA is included because it is used by certain investors to measure a company's financial performance. EBITDA is a "non-GAAP financial measure" and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

EBITDA is presented to provide additional information with respect to Navios Holdings' ability to satisfy its obligations including debt service, capital expenditures, working capital requirements and payment of dividends. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.

SOURCE Navios Maritime Holdings Inc.