NewLead Holdings Ltd. Announces Second Quarter 2010 Financial Results

PIRAEUS, Greece, Aug. 12 /PRNewswire-FirstCall/ -- NewLead Holdings Ltd. (Nasdaq: NEWLD) (“NewLead” or the “Company”), an international, vertically integrated shipping company, today reported financial results for the three and six months ended June 30, 2010.  

Michael S. Zolotas, President and Chief Executive Officer stated, “I am pleased with our performance and the significant progress we have made since we took control of the Company in October 2009. The hard work of our team, while implementing our fleet transformation and growth strategy, is reflected by the $10.1 million in adjusted EBITDA generated by our core vessels during the second quarter of 2010.”

• NewLead Continues its Turnaround Strategy
  • Creating appropriate operational scale and platform to support growth  
  • Continues fleet growth: 13 vessels acquired since Q1 2010
  • Expands newbuilding program: 4 newbuildings acquired since Q1 2010

• NewLead’s Recent Developments
  • Completes acquisition of five dry bulk vessels, including two newbuild Handysize vessels  
  • Progresses on the sale of non-core vessels; agrees to sale of High Land in Q3 2010

Continuation of Turnaround Strategy

NewLead’s new leadership is focusing on refining the Company’s core fleet as reflected in the 13 vessels acquired, including four newbuildings, since the close of the first quarter of 2010. The Company has strategically decided to dispose of all non-core vessels, including container vessels, while simultaneously acquiring newer tonnage, with long-term quality time charters attached. The acquisition and integration of operational, commercial and technical management, completed during Q2 2010, has improved the profitability of the Company as reflected by the 17.3% reduction in direct daily vessel operating expenses compared to Q2 2009, as well as in the relative improvement of its fleet utilization to 97.4% in the second quarter of 2010, excluding non-core vessels. Furthermore, NewLead’s management has implemented a coherent chartering strategy, to secure long-term cash, with upside via profit sharing, while taking into account both the dry bulk and tanker market industry trends. The Company has contracted 71.0%, 45.0%, 37.0%, 34.0% of its available days on a charter-out-basis for the remainder of 2010, 2011, 2012 and 2013, respectively. As a result, NewLead has over $200.0 million of total contracted revenue through 2013, excluding any profit sharing from existing charters.

Fleet Growth

In April 2010, NewLead completed the first dropdown of six vessels from Grandunion Inc. (“Grandunion”). This acquisition is reflected in the Company’s second quarter 2010 financial results. In July 2010, NewLead completed a second dropdown of five dry bulk vessels, including two newbuildings with long-term quality time charters from Grandunion. Total consideration for the dropdown of the five vessels is approximately $147.0 million, which includes approximately $93.0 million in assumed bank debt and other liabilities. The balance, representing newbuilding commitments, will be financed with committed bank and shipyard credit facilities as well as with cash from the Company’s balance sheet.

The three vessels acquired as part of the second dropdown that are currently in operation, the Grand Markela, the Grand Spartounta and the Grand Esmeralda, should generate approximately $11.0 million in annual vessel EBITDA, based on prevailing market rates and assuming direct operating expenses of $6,800 per vessel per day.

Newbuilding Program

In the second quarter of 2010, NewLead completed the purchase of two 80,000 dwt geared Kamsarmaxes for an aggregate purchase price of $112.7 million. The two Kamsarmaxes are expected to be delivered from COSCO Dalian Shipyard during the fourth quarter of 2010 and 2011, respectively, and will be chartered out immediately upon delivery to a first-class charterer. The first vessel is chartered-out for a five-year initial term of $28,710 net rate per day plus owner’s two-year put option ranging between $20,000 and $28,000. The second vessel is chartered-out for a seven-year term of $27,300 net rate per day. These time charters are projected to add approximately $16.1 million in annual vessel EBITDA and $104.0 million in aggregate vessel EBITDA over the term of the charters.

In the first quarter of 2010, NewLead completed the purchase of a 92,000 dwt post-Panamax vessel for $37 million, constructed at a first-class Korean shipyard and is expected to be delivered in the second quarter of 2011. The vessel is chartered-out to a first-class charterer for approximately seven years at a floor rate of $14,438 net rate per day plus 50/50 profit sharing above $17,000. This time charter is projected to add approximately $3.2 million in annual vessel EBITDA and $21.0 million in aggregate vessel EBITDA, assuming zero profit sharing. Using rates as of August 4, 2010, the annualized vessel EBITDA would be $4.2 million and aggregate EBITDA over the term of the charter would be $28.3 million, reflecting the profit sharing contribution.

As part of the second dropdown completed in July 2010, NewLead also acquired two 35,000 dwt Handysize vessels, which are under construction at a first-class shipyard in Korea and scheduled to be delivered in the first quarter of 2011 and third quarter of 2012, respectively. Once delivered, each vessel will be immediately chartered-out for 12 years at a floor rate of $12,000 per day plus 40/60 profit sharing above $14,000 to a first-class European charterer. Upon delivery, the vessels are expected to add approximately $5.0 million in annual vessel EBITDA based on prevailing market rates.

As part of the second dropdown, NewLead also secured the right of first refusal for three additional newbuildings from Grandunion. The three newbuildings are 81,000 dwt Kamsarmaxes, being constructed at a first-class shipyard in Korea, scheduled for delivery in 2013 with long-term charters attached.

Sale of Non-Core Vessels

In April 2010, NewLead divested two no-core vessels, the Chinook and the High Rider, for a total consideration of approximately $14.9 million.

In July 2010, NewLead signed a Memorandum of Agreement for the sale of the High Land, a 1992 Japanese-built, 41,450 dwt, MR tanker for a total consideration of approximately $4.3 million, consistent with the Company’s announced intention of selling its non-core assets.

The divestiture of the Ostria and the Nordanvind is expected to conclude during the third quarter of 2010.

Divesting these inefficient vessels is expected to favorably impact adjusted EBITDA from continuing operations by approximately $7.8 million annually. NewLead plans to use the net proceeds from these sales to renew its fleet or reduce its outstanding indebtedness.

Furthermore, in January 2010, NewLead completed the sale of its container vessels, the MSC Seine and the Saronikos Bridge, for $13.0 million of gross cash proceeds. A portion of these proceeds was used to pay down outstanding debt. As a result of the sale and delivery of these vessels, NewLead exited the container market. Accordingly, the results of operations related to the container market are reflected as discontinued operations.

FINANCIAL RESULTS

For the following results and the selected financial data presented herein, NewLead has compiled consolidated statement of operations for the three and the six months ended June 30, 2010 and 2009. The information was derived from the unaudited consolidated financial statements of the successor and predecessor business (all financial results subsequent to October 13, 2009 are reflected in the SUCCESSOR business). EBITDA, adjusted EBITDA and adjusted EBITDA excluding non-core vessels are non-US GAAP financial measures and should not be used in isolation or substitution for the predecessor and successor results. Furthermore, with the exit from the container market and the addition of dry bulk vessels, NewLead will focus its operations and strategic initiatives on the tanker and dry bulk shipping markets. As a result, NewLead reports its operations in two operating segments, the “Wet” and “Dry” which will include the results of operations for the product tankers and dry bulk vessels, respectively.

(1)  Adjusted EBITDA for the three months ended June 30, 2010, excludes $3.2 million for impairment loss, $0.3 million for a non-cash gain in the fair value of derivatives, $0.7 million for stock-based compensation expense, $0.014 million for doubtful receivables, $0.6 million provision for claims as well as $0.2 million for the straight lining of revenue.

(2)  Adjusted EBITDA for the three months ended June 30, 2009, excludes $1.2 million for a non-cash gain in the fair value of derivatives, $0.1 million for stock-based compensation expense and $0.007 million for doubtful receivables.

For the second quarter ended June 30, 2010, total revenues from continuing operations increased by 138.9% to $25.8 million compared to total revenues of $10.8 million recorded for the quarter ended June 30, 2009. This increase in revenue is primarily attributable to the 82.2% growth in NewLead’s fleet and the corresponding increase in available and operating days of 95.1% and 104.3%, respectively, reflecting management’s initiatives to continue its fleet expansion strategy and bring operational, commercial and technical management capabilities in-house. This revenue growth was partially offset by an increase in direct voyage expenses of $3.3 million to $4.7 million, representing a 235.7% increase from the $1.4 million incurred during the second quarter of 2009 as a consequence of an increase in the number of vessels operating on the spot market during the second quarter of 2010. The number of days for vessels operating on the spot market has increased by 98.6% to 423 days in the second quarter of 2010 from 213 days for the relevant period in 2009. For the quarters ended June 30, 2010 and June 30, 2009, NewLead’s time charter equivalent (TCE) rates were $14,716 per day and $13,761 per day, respectively. This increase is mainly attributable to the favorable charters attached to the vessels that were incorporated in NewLead’s fleet, which was partially offset by the decrease in the charter rates of the vessels operating on the spot market.

Fleet utilization for the quarter ended June 30, 2010 was 88.1% compared to 84.2% for the second quarter of 2009. Fleet utilization for the quarter ended June 30, 2010 was suppressed by 166 unemployment days, mainly attributable to the inefficient performance of NewLead’s non-core vessels, which were primarily operating on the spot tanker market. Excluding non-core vessels scheduled for divestiture during the third quarter of 2010, fleet utilization for the second quarter of 2010 was 97.4%. During the second quarter of 2010, 72.0% of NewLead’s fleet was fixed on time charters compared to 73.0% in the same quarter of 2009, which is in line with NewLead’s chartering strategy to have 60.0%-80.0% of its fleet on period time charters.

Adjusted EBITDA from continuing operations for the quarter ended June 30, 2010 was $7.9 million, compared to $2.1 million for the quarter ended June 30, 2009. Adjusted EBITDA for the core vessels doubled from the first quarter to $10.1 million, reflecting a 146.3% increase compared to second quarter of 2009. This growth in adjusted EBITDA was primarily attributable to the increased operational contribution in total revenues related to the aforementioned 82.2% operating fleet growth and 17.3% reduction in daily vessel operating expenses relative to the second quarter of 2009.

Net loss from continuing operations was $20.2 million for the quarter ended June 30, 2010, compared to a net loss from continuing operations of $3.9 million for the quarter ended June 30, 2009. The results for the second quarter of 2010 reflect the higher operating contribution, as previously discussed, but were more than offset by higher non-operating expenses which include interest and non-cash charges such as depreciation and amortization. Excluding non-cash charges reflected in interest expense, primarily attributable to the $3.6 million amortization of the beneficial conversion feature embedded in the 7.0% convertible senior unsecured notes (“7.0% Notes”) and $0.7 million loss from the change in the fair value of our interest rate swaps, interest expenses were $8.6 million representing a 152.9% increase, reflecting an overall increase in indebtedness relative to the second quarter of 2009. Depreciation and amortization increased by approximately 197.3% to $11.0 million during the three months ended June 30, 2010, compared to $3.7 million during the equivalent period in 2009, reflecting the 82.2% increase in operating fleet growth compared to the prior period as well as the amortization of intangible assets created as a result of the 2009 recapitalization. In addition, the results for the three month period ended June 30, 2010 include a non-cash impairment loss on vessels of $3.2 million related to the pending sale of the High Land, a non-core vessel. Moreover, the results for the second quarter of 2010 included a $0.3 million non-cash gain from the change in the fair value of derivatives compared to a $1.2 million non-cash gain in the second quarter of 2009, as well as transaction costs of $0.4 million mainly relating to the dropdown which closed on April 1, 2010.

Net loss for the quarters ended June 30, 2010 and 2009 was $20.0 million and $8.2 million, respectively. This loss includes income from discontinued operations of $0.2 million in 2010 and a loss of $4.3 million in 2009, which were primarily related to NewLead’s exit from the container market.

Loss per share from continuing operations, reflecting the 1-for-12 reverse stock split of its common shares, was $2.84, compared to $1.65 for the equivalent period of 2009. This loss does not include the earnings per share from discontinued operations of $0.03 for the three month period ended June 30, 2010 and the loss per share of $1.79 for the equivalent period of 2009. For the second quarter of 2010, the loss per share (from both continuing and discontinued operations) was $2.81 for the second quarter of 2010, and $3.44 for the second quarter of 2009.

(1)  Adjusted EBITDA for the six months ended June 30, 2010, excludes $15.7 million for impairment loss, $1.7 million for a non-cash gain in the fair value of derivatives, $1.4 million for stock-based compensation expense, $0.2 million for doubtful receivables, $0.6 million provision for claims as well as $0.4 million for the straight lining of revenue.

(2)  Adjusted EBITDA for the six months ended June 30, 2009, excludes $1.1 million for a non-cash gain in the fair value of derivatives, $0.3 million for stock-based compensation expense and $0.007 million for doubtful receivables.

For the six months ended June 30, 2010, total revenues from continuing operations increased by 94.7% to $43.8 million, compared to total revenues of $22.5 million recorded for the six months ended June 30, 2009. This increase in revenue is primarily attributable to the 57.8% growth in NewLead’s fleet and the corresponding increase in available and operating days by 58.8% and 63.8% respectively, relative to the same period of 2009, reflecting management’s initiatives to continue its fleet expansion strategy and bring operational, commercial and technical management capabilities in-house. The revenue growth was partially offset by an increase in direct voyage expenses of $6.4 million to $9.7 million, representing a 193.9% increase from the $3.3 million incurred during the first half of 2009 as a consequence of an increase in the number of vessels operating on the spot market during the first half of 2010. The number of days for vessels operating on the spot market has increased by 104.2% to 980 days in the first half of 2010 from 480 days for the relevant period in 2009. For the six months ended June 30, 2010 and June 30, 2009, NewLead’s time charter equivalent (TCE) rates were $14,341 per day and $13,544 per day, respectively. This increase is mainly attributable to the favorable charters attached to the vessels that were incorporated in NewLead’s fleet, which was partially offset by the decrease in the charter rates of the vessels operating on the spot market.

Fleet utilization for the six months ended June 30, 2010 was 85.8% compared to 83.2% for the first half of 2009. Fleet utilization for the six months ended June 30, 2010 was suppressed by 341 unemployment days mainly attributable to the inefficient performance of NewLead’s non-core vessels, which were primarily operating on the spot tanker market. Excluding the non-core vessels scheduled for divestiture during the third quarter of 2010, fleet utilization for the first half of 2010 was 94.7%. During the first half of 2010, 62.0% of NewLead’s fleet was fixed on time charters, compared to 71.0% in the first half of 2009, which is in line with NewLead’s chartering strategy to have 60.0%-80.0% of its fleet on period time charters.

Adjusted EBITDA from continuing operations for the six months ended June 30, 2010 was $9.6 million, compared to $4.8 million for the six months ended June 30, 2009. Adjusted EBITDA for the core vessels was $15.2 million, representing a 90.0% increase compared to the relevant period in 2009. This growth in Adjusted EBITDA was primarily attributable to the increased operational contribution in total revenues related to the aforementioned 57.8% operating fleet growth and the 11.3% reduction in daily vessel operating expenses relative to the first half of 2009.

Net loss from continuing operations was $44.8 million for the six months ended June 30, 2010, compared to a net loss from continuing operations of $8.7 million recorded for the six months ended June 30, 2009. The results for the first half of 2010 reflect the higher operating contribution, as previously discussed, but were more than offset by higher non-operating expenses, which include interest and non-cash charges such as depreciation and amortization. Excluding non-cash charges reflected in interest expense, primarily attributable to the $7.2 million amortization of the beneficial conversion feature embedded in the 7.0% Notes and $0.4 million gain from the change in the fair value of our interest rate swaps, interest expenses were $14.8 million. This represents a 117.6% increase, reflecting an overall increase in indebtedness from the first half of 2009. Depreciation and amortization increased by approximately 121.3% to $16.6 million during the six months ended June 30, 2010, compared to $7.5 million during the equivalent period in 2009 reflecting the 57.8% increase in operating fleet growth compared to the prior period, as well as the amortization of the intangible assets created as a result of the 2009 recapitalization. In addition, the results for the six-month period ended June 30, 2010 include a non-cash impairment loss on vessels of $15.7 million related to the sale of non-core vessels. Moreover, the results for the first half of 2010 included a $1.7 million non-cash gain from the change in the fair value of derivatives, compared to a $1.1 million in the first half of 2009, as well as transaction costs of $1.3 million mainly relating to the dropdown entities which closed on April 1, 2010.

Net loss for the six months ended June 30, 2010 and 2009 was $42.3 million and $12.5 million, respectively. This loss includes income from discontinued operations of $2.5 million in 2010 and a loss of $3.8 million in 2009, which were primarily related to NewLead’s exit from the container market.

Loss per share from continuing operations, reflecting the 1-for-12 reverse stock split of its common shares, was $6.60, compared to $3.62 for the equivalent period of 2009. This loss does not include the earnings per share from discontinued operations of $0.37 for the six month periods ended June 30, 2010 and the loss per share of $1.59 for the equivalent period of 2009. For the first half of 2010, the loss per share (from both continuing and discontinued operations) was $6.23 and $5.21 for the first half of 2009.

Balance Sheet

NewLead’s liquidity reflects $96.8 million of total cash (non-restricted $62.9 million and restricted of $33.9 million) as of June 30, 2010, compared with $116.3 million in total cash as of December 31, 2009.  The decrease of $19.5 million in total cash is primarily attributable to vessels’ acquisitions, debts service, decrease in operating liabilities and dry-docking/special surveys costs. Total debt as of June 30, 2010 and December 31, 20009 was $465.4 million and $278.7 million, respectively, representing a $186.7 million increase. The increase is mainly attributable to: (i) $7.2 million amortization of the beneficial conversion feature attributed to the 7.0% Notes; (ii) the $154.5 million assumption of loans related to the dropdown entities and (iii) the $42.5 million assumption and drawdown of debt related to the acquisition of two Kamsarmax newbuildings. The overall increase in indebtedness reflects $17.5 million of debt repayments related to the amortization installments of debt and proceeds generated from container sales. As of June 30, 2010, NewLead had approximately 7.4 million of common shares issued and outstanding reflecting mainly the 1-for-12 reverse stock split of its common shares which occurred on August 3, 2010.

FLEET UPDATE

NewLead currently controls 24 vessels, including nine double-hull product tankers, ten dry bulk vessels and five newbuildings, which reflect the five vessels acquired in the recent dropdown. Currently, 14 out of NewLead’s 19 vessels in operation are secured on period charters with established international charterers.

The following table details NewLead's fleet deployment as of August 12, 2010:

(1) Vessel is under a bareboat charter party agreement. The operating expenses are for the account of the charterer. Accordingly, the vessel’s Time Charter Equivalent (TCE) rate is grossed up to reflect estimated daily operating costs. As a result, the vessel’s charter rate is adjusted to a TCE rate of $24,933, to include estimated operating costs of $6,700.

(2) The sales of these vessels are expected to close during the third quarter of 2010.

(3) After the end of the current time charter, the vessel is fixed for a period of 20-22 months earning 105.0% of the average of the 4 BPI routes less 5.0% commissions.

(4) $28,985 for the first and second years, $26,180 plus 50/50 profit sharing for all years thereafter, (85.0% of the Cape Spot 4 TCE Avg. Minus $26,600). If Charterers exercise their option for M/V Grand Ocean third year, Brazil third year hire to remain $28,985.  

(5) Charterer’s option to extend for one additional year

(6) Charterer’s option to extend for six additional months

(7) Profit sharing is based on 86.0% of the Baltic Panamax Average 4TC Routes.

(8) Charterer's option for 1+1 additional years. Hire for first optional year $15,400 (net) plus 50/50 profit sharing. Hire for second optional year $16,844 (net) plus 50/50 profit sharing.

(9) $28,710 five years charter, plus two optional years (1+1). Owners' put option for up to two year’s charter at a net charter rate between $20,000 and $28,000. This fixture is subject to Charterer not exercising their optional years, in order to secure seven-year charter duration for the vessel.

(10) Base rate $12,000. Above $14,000 profit sharing 40.0% based on open book accounting on actual earnings.

Summary of Selected Data

1)  Available days is the total number of days a vessel is controlled by a company less the aggregate number of days that the vessel is off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.

2)  Operating days is the number of available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including lack of demand or unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.

3)  Fleet utilization is obtained by dividing the number of operating days during a period by the number of available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.

4)  Equivalent vessels data is the available days of the fleet divided by the number of the calendar days in the respective period.

5)  Time Charter Equivalent, or TCE, rates are defined as voyage, time charter and bareboat revenues, less voyage expenses and commissions during a period, divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts, while charter hire rates for vessels on time charters generally are expressed in such amounts.  The Stena Compass and the Stena Compassion were each employed on bareboat charters during the three and the six-month periods ended June 30, 2010 and 2009. Accordingly, the Stena Compass and the Stena Compassion’s charter rates have been adjusted to reflect a TCE rate of approximately $24,933 per day for fiscals 2010 and 2009, assuming operating costs of 6,700 per day for fiscals 2010 and 2009.

6)Direct daily vessel operating expenses are defined as the sum of the vessel operating expenses and management fees, divided by the vessels calendar days. This has been adjusted to exclude the calendar days with respect to the Stena Compass and the Stena Compassion, which were employed on bareboat charters.

CONFERENCE CALL INFORMATION

NewLead will hold a conference call today, Thursday, August 12, 2010 at 10:00 am EDT to discuss highlights and details of the second quarter 2010 financial results.

A supplemental slide presentation will be available on NewLead’s website on the morning of the call.

To access the conference call participants should dial +1 (888) 895-3561 (US/Canada) or +1 (706) 634-7259 (international) at 9:50 a.m. (EDT) and request the NewLead Holdings Ltd. Second Quarter 2010 Earnings Call or Conference ID #92184865.

A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call +1 (800) 642-1687 (US/Canada) or +1 (706) 645-9291 (international) and enter confirmation code 92184865. The recording will be available from Thursday, August 12, 2010 at 1:00 p.m. (EDT) through Thursday, August 19, 2010 at 11:59 p.m. (EDT).

A live webcast of the earnings conference call will also be available at www.newleadholdings.com under the Investor Relations section.

About NewLead Holdings Ltd.

NewLead Holdings Ltd. is an international shipping company that owns and operates product tankers, and dry bulk vessels. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. Following the reverse stock split on August 3, 2010, NewLead's common shares are trading under the symbol "NEWLD" until August 31, 2010.  To learn more about NewLead Holdings Ltd., please visit the new website at www.newleadholdings.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This press release includes assumptions, expectations, projections, intentions and beliefs about future events.  These statements are intended as ‘‘forward-looking statements.’’  We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. All statements in this document that are not statements of historical fact are forward-looking statements.  Forward-looking statements include, but are not limited to, such matters as future operating or financial results; statements about planned, pending or recent acquisitions, business strategy, future dividend payments and expected capital spending or operating expenses, including dry-docking and insurance costs; statements about trends in the drybulk vessel and products tanker shipping markets, including charter rates and factors affecting supply and demand; our ability to obtain additional financing; expectations regarding the availability of vessel acquisitions; and anticipated developments with respect to pending litigation. 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, management’s examination of historical operating trends, data contained in our records and other data available from third parties.  Although NewLead Holdings Ltd. 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, NewLead Holdings Ltd. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections described in the forward looking statements contained in this press release. 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 charter rates and vessel values, failure of a seller to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, default by one or more charterers of our ships, changes in demand for oil and oil products, the effect of changes in OPEC’s petroleum production levels, worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled dry-docking, changes in NewLead Holdings Ltd.’s voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations 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, international hostilities and political events or acts by terrorists and other factors discussed in NewLead Holdings Ltd.’s filings with the U.S. Securities and Exchange Commission from time to time. When used in this document, the words ‘‘anticipate,’’ ‘‘estimate,’’ ‘‘project,’’ ‘forecast,’’ ‘‘plan,’’ ‘‘potential,’’ ‘‘may,’’ ‘‘should,’’ and ‘‘expect’’ reflect forward-looking statements.  

SOURCE NewLead Holdings Ltd.