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Star Bulk Carriers Corp. Reports Financial Results for the

Star Bulk Carriers Corp. Reports Financial Results for the Third
Quarter and Nine Months Ended September 30, 2012 
ATHENS, GREECE -- (Marketwire) -- 11/30/12 --   Star Bulk Carriers
Corp. (the "Company" or "Star Bulk") (NASDAQ: SBLK), a global
shipping company focusing on the transportation of dry bulk cargoes,
today announced its unaudited financial and operating results for the
three and the nine months ended September 30, 2012. 
For the third quarter 2012, Star Bulk reported a net loss of $308.7
million mainly due to a non-cash impairment charge of $303.2 million
related to the total fleet of our eight Supramax vessels and to our
oldest Capesize vessel. Adjusted net loss for the third quarter 2012
amounted to $3.8 million. 
Financial Highlights 


 
                                                                            
(Expressed in                                                               
 thousands of U.S.      3 months      3 months      9 months      9 months  
 dollars, except for     ended         ended         ended         ended    
 daily rates and per September 30, September 30, September 30, September 30,
 share data)              2012          2011          2012          2011    
Average Number of                                                           
 Vessels                  14.0          12.5          14.2          11.5    
Time Charter                                                                
 Equivalent Rate        $15,201       $18,817       $15,560       $20,166   
 (TCE)                                                                      
Average OPEX per day                                                        
 per vessel              $4,878        $5,682        $5,239        $5,478   
Net Revenue             $18,417       $26,255       $68,224       $78,440   
Impairment Loss        ($303,219)        -         ($303,219)        -      
EBITDA                 ($297,289)     $10,464      ($278,549)     $39,548   
Adjusted EBITDA (1)      $7,629       $11,918       $34,020       $41,227   
Net l(loss) / income   ($308,677)     ($2,996)     ($313,137)       $384    
Adjusted Net loss /                                                         
 income (1)             ($3,760)      ($1,542)       ($568)        $2,063   
(
Loss) / earnings                                                           
 per share basic and    ($57.15)      ($0.59)       ($58.09)       $0.08    
 diluted (2)                                                                
Adjusted (Loss) /                                                           
 earnings per share                                                         
 basic and diluted      ($0.70)       ($0.30)       ($0.11)        $0.46    
 (2)                                                                        

 
(1) See the table at the back of this release for a reconciliation of
TCE to Time Charter Revenue, EBITDA and Adjusted EBITDA to Net
Income, Adjusted Net Income to Net Income and Adjusted Earnings Per
Share to Earnings Per Share, the most directly comparable financial
measures calculated and presented in accordance with generally
accepted accounting principles in the United States ("U.S. GAAP").  
(2) Adjusted to give effect to the 15 to 1 reverse stock split that
became effective on October 15, 2012.  
Spyros Capralos, President and CEO of Star Bulk, commented: "Despite
the already soft market for the past 4 years, this quarter has been
one of the most challenging in recent shipping history. The Baltic
Dry Index (BDI) for the quarter ended September 30, 2012 averaged a
record low index of 846, which was lower than the previous all-time
low recorded in the quarter ended December 31, 2001, which averaged
875. The exceptionally weak freight market environment has affected
our revenues due to our increased spot market exposure, especially in
the Supramax sector. However, our prudent strategy to hedge our
Capesize fleet with first class charterers has reduced the weak
market impact. Our $3.8 million adjusted loss in this quarter
includes a loss of revenue of $1.5 million due to the main engine
damage of the Star Polaris, which received no hire. The vessel has
been repaired and re-entered her charter of $16,500 per day to our
first class charterer. In the meantime, we are pursuing our claim
against the shipyard. 
Historically freight rates and asset values are closely correlated
and, as one would expect, vessel values have dropped significantly
during the last several quarters. As a result of these adverse market
conditions, as of September 30, 2012, we were not in compliance with
some covenants in our loan agreements. We are currently in advanced
discussions with our lenders to clear these issues. Whilst a mutually
agreeable solution is being sought, our Board of Directors has
decided to suspend the payment of dividend on the Company's common
stock. 
Our medium-term outlook for the dry bulk industry is turning positive
as we move past this year's imbalanced supply growth. While demand
for dry bulk commodities from major developing countries continues
its growth for the foreseeable future, we expect the market to start
improving due to the reduced orderbook, increased scrapping, slow
steaming and the lack of bank financing." 
Simos Spyrou, Chief Financial Officer of Star Bulk, commented: "As a
result of the low freight rates and low asset values, we performed an
impairment test as of September 30, 2012. We determined that the book
values of the total fleet of our Supramax vessels and our oldest
Capesize vessel were not recoverable as of September 30, 2012 and
thus a non-cash impairment loss of $303.2 million was recognized. We
believe that our book values, following the impairment, provide a
better estimation of the current values of our assets consistent with
market conditions. 
On the income statement side, we have continued to successfully
implement our cost optimization strategy. Our general and
administrative expenses were $2.0 million for the quarter ended
September 30, 2012 compared to $3.0 million in the same period of
2011. This reduction was achieved while our average number of
employees increased by 14%. 
Our operating expenses for the quarter ended September 30, 2012 were
$6.3 million, 4% lower than the same period of 2011. This reduction
was achieved while our fleet expanded by 12%. Specifically, average
daily operating expenses per vessel were $4,878 for the quarter ended
September 30, 2012, compared to $5,682 for the same period of 2011, a
reduction of 14%, despite an increase in our average size of vessels
operated during the period." 
Fleet Profile (As of November 30, 2012) 


 
                                                 
Vessel Name        Type         DWT    Year Built
------------- -------------- --------- ----------
Star Aurora      Capesize     171,199     2000   
Star Big         Capesize     168,404     1996   
Star Borealis    Capesize     179,678     2011   
Star Mega        Capesize     170,631     1994   
Star Polaris     Capesize     179,546     2011   
Star Sigma       Capesize     184,403     1991   
Star Cosmo       Supramax      52,247     2005   
Star Delta       Supramax      52,434     2000   
Star Epsilon     Supramax      52,402     2001   
Star Gamma       Supramax      53,098     2002   
Star Kappa       Supramax      52,055     2001   
Star Omicron     Supramax      53,489     2005   
Star Theta       Supramax      52,425     2003   
Star Zeta        Supramax      52,994     2003   
                                                 
Total               14       1,475,005           

 
Third Quarter 2012 and 2011 Results
 For the quarter ended September
30, 2012, total voyage revenues amounted to $18.3 million compared to
$26.2 million for the quarter ended September 30, 2011, a reduction
of 30%. This decrease was mainly due to lower charter rates for some
of our vessels due to the decline in the dry bulk charter market. In
addition, voyage revenues for the quarter ended September 30, 2012
included a deduction of $1.6 million associated with the amortization
of fair value of above market acquired time charters, attached to
vessels acquired in the quarter ended September 30, 2011, which time
charters are amortized over the remaining period of the time
charters. For the quarter ended September 30, 2011 this deduction was
$0.8 million. Voyage revenues were also negatively affected by the
main engine damage of the Star Polaris, which resulted to an off hire
period of 92 days and a loss of revenue of $1.5 million.  
For the quarter ended September 30, 2012, operating loss amounted to
$306.8 million compared to $2.2 million for the quarter ended
September 30, 2011. For the quarter ended September 30, 2012, net
loss amounted to $308.7 million, or a loss of $57.15 per basic and
diluted share, based on 5,400,827 shares, which is the weighted
average number of shares, basic and diluted, giving effect to the 1
to 15 reverse stock split effective October 15, 2012 ("reverse
split-adjusted basis"). Net loss for the quarter ended September 30,
2011 amounted to $3.0 million, or $0.59 loss per basic and diluted
share, based on 5,118,131 shares, which is the weighted average
numbers of basic and diluted shares on a reverse split-adjusted
basis. 
Net Income for the quarter ended September 30, 2012 includes the
following non-cash items: 


 
--  Impairment loss of $303.2 million, or $56.14 per basic and diluted
    share, related to the total fleet of our eight Supramax vessels and to
    one of our Capesize vessels, Star Sigma.
    
    
--  Amortization of fair value of above market acquired time charters of
    $1.6 million, or $0.30 per basic and diluted share, associated with
    time charters attached to vessels acquired in the third quarter of
    2011, including vessels Star Big and Star Mega, which time charters
    are amortized over the remaining period of the time charter as a
    decrease to net revenue.
    
    
--  Expenses of $0.1 million, or $0.013 per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the unvested restricted shares issued to directors and
    employees.

  
Excluding these non-cash items, net loss for the quarter ended
September 30, 2012 would amount to $3.8 million, or $0.70 loss per
basic and diluted share, based on 5,400,827 shares, which is the
weighted average number of basic and diluted shares, on a reverse
split-adjusted basis. 
Net Income for the quarter ended September 30, 2011 includes the
following non-cash items: 


 
--  Amortization of fair value of above market acquired time charters of
    $0.8 million, or $0.15 per basic and diluted share, associated with
    time charters attached to vessels acquired in the third quarter of
    2011, including vessels Star Big and Star Mega, which time charters
    are amortized over the remaining period of the time charter as a
    decrease to net revenue.
    
    
--  Expenses of $0.6 million, or $0.11 per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the restricted shares issued to directors and
    employees.
    
    
--  An unrealized loss of $0.1 million, or $0.02 per basic and diluted
    share, associated with the mark-to-market valuation of all the
    Company's derivatives.

  
Excluding these non-cash items, net loss for the quarter ended
September 30, 2011 would amount to $1.5 million, or $0.3 loss per
basic and diluted share, based on 5,118,131 shares, which is the
weighted average number of basic and diluted shares, on a reverse
split-adjusted basis. 
Adjusted EBITDA for the quarters ended September 30, 2012 and 2011
excluding the above items was $7.6 million and $11.9 million,
respectively. A reconciliation of EBITDA and adjusted EBITDA to net
cash provided by cash flows from operating activities is set forth
below. 
We owned and operated an average of 14.0 and 12.5 vessels during the
quarters ended September 30, 2012 and 2011, respectively, which
earned an average Time Charter Equivalent, or TCE, rate of $15,201
per day and $18,817 per day, respectively. We refer you to the
information under the heading "Summary of Selected Data" later in
this earnings release for information regarding our calculation of
TCE rates. 
For the quarter ended September 30, 2012, voyage expenses decreased
by $2.5 million to $3.4 million compared to $5.9 million for the
quarter ended September 30, 2011. The decrease is mainly due to
voyage expenses of $4.5 million related to chartering-in a third
party vessel to serve a shipment under a Contract of Affreightment
(COA) recorded in the third quarter of 2011. There was no
corresponding expense during the same period in 2012. During the
three months ended September 30, 2012, one of our vessels was under a
voyage charter agreement, which resulted in an increase in voyage
expenses of $2.1 million due to the fact that the Company was
obligated to pay for bunkers. None of our vessels were under voyage
charter agreements that required the Company to pay for bunkers
during the three months ended September 30, 2011. 
For the quarter ended September 30, 2012, vessel operating expenses
totaled $6.3 million compared to $6.5 million for the same period of
2011. The decrease is mainly due to improvements in our operational
efficiency which resulted in a decrease in daily operating expenses
per vessel to $4,878 for the quarter ended September 30, 2012
compared to $5,682 for the same period in 2011. 
For the quarter ended September 30, 2012 dry-docking expenses totaled
$2.0 million compared to $0.2 million for the same period in 2011.
The amount of $2.0 million for the quarter ended September 30, 2012
consists of $1.7 million attributable to the dry-docking of one of
our Capesize vessels, Star Mega, which underwent a dry-docking survey
in late June 2012, and, the remaining amount is attributable to the
dry-docking of one of our Supramax vessels, Star Cosmo, which
underwent a dry-docking survey in late September 2012. 
Even though we had an increase in the number of vessels that operated
during the three month period ended September 30, 2012 compared to
the same period in 2011, depreciation expense decreased to $9.5
million for the quarter ended September 30, 2012 compared to $12.7
million for the quarter ended September 30, 2011. Decrease in
depreciation expense is mainly due to reduced depreciable value of
our oldest Capesize vessel, Star Sigma, after the related impairment
loss was recognized as of December 31, 2011 and due to the sale of
the other oldest Capesize vessel, Star Ypsilon, in March 2012. 
General and administrative expenses during the quarter ended
September 30, 2012 decreased to $2.0 million compared to $3.0 million
during the quarter ended September 30, 2011. This decrease is mainly
due to lower stock based compensation expenses of $0.5 million in the
third quarter of 2012 compared to the same period in 2011 and due to
the fact that general and administrative expenses for the quarter
ended September 30, 2011, included a non- recurring severance payment
of $0.7 million to the former Chief Financial Officer (CFO), who
resigned as our CFO and from our Board of Directors on August 31,
2011, which was payable pursuant to the terms of his employment and
consultancy agreement. Our general and administrative expenses
decreased during the quarter ended September 30, 2012 compared to the
same period in 2011 even though our number of employees increased
during the period as a result of the growth of our fleet.  
During the quarter ended September 30, 2012, we recorded an
impairment loss of $303.2 million in the book value of our eight
Supramax vessels and one of our oldest Capesize vessels, Star Sigma
in order the carrying values of the respective vessels to reflect
their fair market values. 
Other operational gain amounting to $1.9 million during the quarter
ended September 30, 2012, includes non-recurring revenue of $1.4
million, which represented a settlement of a commercial claim and a
gain of $0.5 million regarding a hull and machinery claim. Other
operational gain totaled to $0.2 million during the nine months ended
September 30, 2011 related to a hull and machinery claim.  
In September 2010, the Company has signed an agreement to sell a 45%
interest in the future proceeds related to the settlement of certain
commercial claims. As a result, in connection to the settlement
amount of $1.4 million described in other operational gain above,
during the quarter ended September 30, 2012, the Company incurred an
expense of $0.7 million described in other operational loss. During
the quarter ended September 30, 2011, no other operational loss was
recorded. 
Nine months ended September 30, 2012 and 2011 Results 
For the nine months ended September 30, 2012, total voyage revenues
amounted to $68.0 million compared to $78.4 million for the same
period of 2011. This decrease was mainly due to lower charter rates
for some of the vessels during 2012 compared to the same period of
2011. In addition, the Company for the nine months ended September
30, 2012 recorded lower revenue of $4.8 million associated with the
amortization of fair value of above market acquired time charters
attached to vessels acquired, compared to $0.6 million of lower
revenue recorded for the nine months ended September 30, 2011. For
the nine months ended September 30, 2012, voyage revenues were also
affected by the Star Polaris' grounding and damage of main engine,
which resulted in an off hire period of 142 days and $2.3 million in
lost revenues. Operating loss amounted to $307.3 million for the nine
months ended September 30, 2012 compared to an operating income of
$2.9 million for the same period of 2011. Net loss for the nine
months ended September 30, 2012 amounted to $313.1 million
representing $58.09 loss per basic and diluted share based on
5,390,553 shares, which is the weighted average number of shares,
basic and diluted, on a reverse split-adjusted basis. Net income for
the nine months ended September 30, 2011 amounted to $0.4 million
representing $0.08 earnings per basic and diluted share calculated on
4,525,501 and 4,528,822 weighted average number of shares, basic and
diluted, respectively, on a reverse split-adjusted basis. 
Net loss for the nine months ended September 30, 2012, includes the
following non-cash items:  


 
--  Impairment loss of $303.2 million, or $56.25 per basic and diluted
    share, related to one of our Capesize vessels, Star Sigma, and the
    total fleet of our eight Supramax vessels.
    
    
--  Amortization of fair value of above market acquired time charters of
    $4.8 million, or $0.88 per basic and diluted share, associated with
    time charters attached to vessels acquired in the third quarter of
    2011, which are amortized over the remaining period of the time
    charter as a decrease to voyage revenue.
    
    
--  Expenses of $1.5 million, or $0.27 per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the unvested restricted shares issued to directors and
    employees.
    
    
--  Loss on sale of vessel of $3.2 million, or $0.59 per basic and diluted
    share, in connection with the sale of vessel Star Ypsilon that took
    place in first quarter of 2012.
    
    
--  An unrealized gain of $0.1 million, or $0.02 per basic and diluted
    share, associated with the mark-to-market valuation of the Company's
    derivatives.

  
Excluding these non-cash items, net loss for the nine months ended
September 30, 2012 would amount to $0.6 million, or $0.11 loss per
basic and diluted share, based on 5,390,553 shares, which is the
weighted average number of basic and diluted shares, on a reverse
split-adjusted basis. 
Net income for the nine months ended September 30, 2011 includes the
following non-cash items:  


 
--  An increase of revenue of $0.5 million, or $0.1 per basic and diluted
    share, representing write-off of remaining balance of deferred revenue
    related to the fair value of below market acquired time charters
    attached to vessels acquired, due to early redelivery of vessel Star
    Cosmo by its charterers, of which $0.2 million is included under
    Voyage revenues and $0.3 million is included under Gain on time
    charter agreement termination.
    
    
--  Amortization of fair value of above market acquired time charters of
    $0.8 million, or $0.17 per basic and diluted share, associated with
    time charters attached to vessels acquired in the third quarter of
    2011, including vessels Star Big and Star Mega, which time charters
    are amortized over the remaining period of the time charter as
    decrease to voyage revenues.
    
    
--  Expenses of $1.2 million, or $0.27 per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the unvested restricted shares issued to directors and
    employees
    
    
--  An unrealized loss of $0.2 million, or $0.04 per basic and diluted
    share, associated with the mark-to-market valuation of the Company's
    derivatives.

  
Excluding these non-cash items, net income for the nine months ended
September 30, 2011 would amount to $2.1 million, or $0.46 earnings
per basic and diluted share, based on 4,525,501 and 4,528,822
weighted average numbers of shares, basic and diluted, respectively,
on a reverse split-adjusted basis. 
Adjusted EBITDA for the nine months ended September 30, 2012 and 2011
was $34.0 million and $41.2 million, respectively. A reconciliation
of EBITDA and adjusted EBITDA to net cash provided by cash flows from
operating activities is set forth below. 
We owned and operated an average of 14.2 and 11.5 vessels during the
nine month period ended September 30, 2012 and 2011, respectively,
earning an average TCE rate of $15,560 and $20,166 per day,
respectively. We refer you to the information under the heading
"Summary of Selected Data" later in this earnings release for further
information regarding our calculation of TCE rates. 
Voyage expenses amounted to $17.5 million for the nine month period
ended September 30, 2012 compared to $17.0 million for the nine month
period ended September 30, 2011. The expense for chartering-in third
party vessels to serve shipments under a COA amounted to $4.1 million
and $14.4 million for the nine month period ended September 30, 2012
and 2011, respectively. Excluding these expenses for chartering-in
third party vessels, the increase in voyage expenses is mainly due to
the fact that during the nine month period ended September 30, 2012
our vessels were under six voyage charter agreements, pursuant which
voyage expenses were paid by the Company, while during the same
period in 2011 none of our vessels were under voyage charter
agreement. The revenues earned from the voyage charter agreements
during the nine month period ended September 30, 2012 was $18.1
million.  
For the nine months ended September 30, 2012 vessel operating
expenses totaled $20.5 million compared to $17.2 million for the same
period of 2011. The increase is mainly due to the fact that the
average number of vessels increased to 14.2 during the nine months
ended September 30, 2012 compared to 11.5 during the same period in
2011. Daily operating expenses decreased to $5,239 for the nine month
period ended September 30, 2012 compared to $5,478 for the same
period in 2011. This decrease is mainly attributable to improvements
in our operational efficiency. 
For the nine months ended September 30, 2012 and 2011 our dry-docking
expenses were $3.0 million and $1.6 million, respectively. The
increase is mainly due to the fact that in the nine months ended
September 30, 2012 we had one Supramax vessel and one Capesize vessel
that underwent dry docking surveys, compared to two Supramax vessels
that underwent periodic dry-docking survey in the same period in
2011. 
Even though we had an increase in the number of vessels that operated
during nine months ended September 30, 2012 compared to the same
period of 2011, depreciation expense decreased to $28.7 million for
the nine months ended September 30, 2012 compared to $36.7 million
for the nine months ended September 30, 2011. Decrease in
depreciation expense is mainly due to reduced net book values of our
two oldest Capesize vessels Star Sigma and Star Ypsilon, after the
related impairment losses were recognized as of December 31, 2011. 
General and administrative expenses totaled $7.3 million during the
nine month period ended September 30, 2012 compared to $10.0 million
during the nine month period ended September 30, 2011, respectively.
The decrease in general and administrative expenses in nine month
period ended September 30, 2012 is mainly due to the non-recurring
severance payment to the Company's former Chief Executive Officer and
President and to the Company's former Chief Financial Officer, which
was payable pursuant to the terms of their employment and consultancy
agreements with the Company, totaling to $2.8 million. Our general
and administrative expenses decreased during the quarter ended
September 30, 2012 compared to the same period in 2011 even though
our number of employees increased during the period as a result of
the growth of our fleet. 
During the nine months ended September 30, 2012, we recorded an
impairment loss of $303.2 million in the book value one of our oldest
Capesize vessels, Star Sigma, and the whole fleet of our eight
Supramax vessels, in order the carrying values of the respective
vessels to reflect their fair market values. 
Gain on time charter agreement termination totaled $6.5 million for
the nine months ended September 30, 2012, representing a cash payment
of $5.73 million and fuel oil valued at $0.72 million which was
received as compensation for the early redelivery of vessel Star
Sigma from its previous charterer. Gain on time charter agreement
amounting $1.8 million for the nine months ended September 30, 2011
consisted of $1.2 million cash compensation in connection with the
early redelivery of the Star Omicron by its previous charterer and
$0.6 non-cash gain in connection with early redelivery of the Star
Cosmo, by its previous charterer. The non-cash gain relates to the
write off of both the unamortized fair value of below market acquired
time charter on the respective vessels' redelivery date and the
deferred revenue from the terminated time charter contract.  
Other operational gain amounting to $2.0 million during the nine
months ended September 30, 2012, mainly consists of non-recurring
revenue of $1.4 million, which represents a settlement of a
commercial claim and a gain of $0.7 million regarding a hull and
machinery claim. Other operational gain totaled to $9.3 million
during the nine months ended September 30, 2011 consisted of $9.0
million received from the settlement of a commercial claim and a gain
of $0.3 million regarding a hull and machinery claim.  
Other operational loss amounted to $0.7 million during the nine
months ended September 30, 2012 representing the cash payment made by
the Company to a third party pursuant to the terms of the agreement
that was signed in September of 2010, to sell a 45% interest in the
future proceeds related to the settlement of certain commercial
claims. The expense of $0.7 million was incurred in connection to the
settlement amount of $1.4 million described in other operational gain
above. Other operational loss totaled $4.1 million during the nine
months ended September 30, 2011, due to the payment made by the
Company to a third party pursuant to the terms of the same agreement
as described above. The payment of $4.1 million was made in
connection to the settlement of a commercial claim in the amount of
$9.0 million described in other operational gain.  
Loss on sale of vessel of $3.2 million represents a loss on sale of
the vessel Star Ypsilon during the nine-month period ended September
30, 2012. There was no sale of vessels during the nine- month period
ended September 30, 2011. 
(*) Amounts relating to variations in period-on-period comparisons
shown in this section are derived from the actual numbers in the
Company's books and records. 
Liquidity and Capital Resources 
Cash Flows
 Net cash provided by operating activities for the nine
months ended September 30, 2012 and 2011, was $19.5 million and $35.6
million, respectively. Cash flows generated by the operation of our
fleet decreased mainly due to lower average TCE rates, (see "Summary
of Selected Data" below) as a result of the decline in the prevailing
freight rate environment. For the nine months ended September 30,
2012 the Company earned a daily TCE rate of $15,560 compared to a
daily TCE rate of $20,166 for the nine months ended September 30,
2011. 
Net cash provided by investing activities for the nine months ended
September 30, 2012 was $14.1 million. Net cash used in investing
activities for the nine months ended September 30, 2011 was $108.9
million. For the nine months ended September 30, 2012 net cash
provided by investing activities consisted of the proceeds from sale
of the Star Ypsilon amounting to $8.0 million, a net decrease of $2.2
million in restricted cash, insurance proceeds amounting to $4.0
million, and $0.1 million relating to additions to office equipment.
Net cash used in investing activities for the nine months ended
September 30, 2011, consisted of $29.3 million related to the
acquisition of second hand Capesize vessels Star Big and Star Mega
plus a cash consideration of $23.1 million paid for the acquisition
of the above fair market charter rates attached to these two vessels,
plus $33.3 million related to the delivery of our newbuilding vessel
Star Borealis, plus installments amounting to $22.5 million related
to our newbuilding vessel Star Polaris and a net increase of $1.8
million in restricted cash offset by insurance proceeds amounting to
$1.1 million. 
Net cash used in financing activities for the nine months ended
September 30, 2012 was $36.5 million. Net cash provided by financing
activities for the nine months ended September 30, 2011 was $76.8
million. For the nine months ended September 30, 2012, net cash used
in financing activities consisted of loan installment payments
amounting to $32.0 million, cash dividend payments of $3.6 million,
and $0.9 million paid for the repurchase of 925,957 shares under the
terms of the existing share re-purchase plan. For the nine months
ended September 30, 2011, net cash provided by financing activities
consisted of loan proceeds amounting to $85.5 million in a relation
to the acquisition of the second hand vessels Star Big and Star Mega
as well as progress installment payments for our new building vessels
Star Borealis and Star Polaris and proceeds from the public offering
amounting to $28.7 million, offset by, cash dividend payments of
$10.4 million, financing fees amounting to $0.9 million, and loan
installment payments amounting to $26.1 million. 
Impairment loss
 As a result of the decline in charter rates and
vessel values during the last four years and because market
expectations for future rates are low and vessel values are unlikely
to increase to the high levels of 2008 in the foreseeable future, we
performed an impairment test using the value in use method as of
September 30, 2012. We determined undiscounted projected net
operating cash flows for each vessel and compared it to the vessel's
carrying value. In developing our estimates of future cash flows, we
made assumptions about future charter rates, ship operating expenses
and the estimated remaining useful lives of the vessels. These
assumptions are based on current market conditions, historical trends
as well as future expectations The projected net operating cash flows
were determined by considering the charter revenues from existing
time charters for the fixed vessel days and an estimated daily time
charter equivalent for the unfixed days over the estimated remaining
economic life of each vessel, net of brokerage commissions, expected
outflows for scheduled vessels' maintenance (dry-docking and special
surveys) and vessels' operating expenses. Estimates of revenue are
based on the current FFA rates for as long as they are available and
historical average rates of similar size vessels for the period
thereafter. As result of this analysis, we determined that the
carrying amount of the total fleet of our eight Supramax vessels and
one of our oldest Capesize vessels, Star Sigma, were not recoverable
as of September 30, 2012 and thus we recognized a loss amounting to
$303.2 million. This impairment loss does not represent a cash
expense and it does not affect the Company's cash flow. 
Financing Update
 As of September 30, 2012, we were not in compliance
with several financial and security coverage ratio covenants in our
loan agreements. As a result, the Company may be required to prepay
indebtedness, provide additional collateral, or obtain waivers to the
respective terms of the facilities. The Company is currently in
advanced discussions with its lenders to address the issues. If we
are not able to reach a mutually acceptable resolution with our
lenders, our total indebtedness may be reclassified as current and
our lenders may accelerate our indebtedness and foreclose their liens
on our vessels, which would impair our ability to continue to conduct
our business. 
In order to preserve our existing liquidity position while we discuss
certain modifications with our lenders, the Board of Directors has
decided to suspend the payment of dividend, on the Company's common
stock until a mutually agreeable solution can be reached with our
lenders and the general freight rate environment improves. 
Recent Developments
 Effective as of the opening of trading on
October 15, 2012, the Company affected a one-for-fifteen reverse
stock split of its common shares. The reverse stock split was
approved by shareholders at the Company's 2012 Annual General Meeting
of Shareholders held on September 7, 2012. The reverse stock split
reduced the number of the Company's common shares from 81,012,403 to
5,400,810 and affected all issued and outstanding common shares. No
fractional shares were issued in connection to the reverse split.
Shareholders who would otherwise hold a fractional share of the
Company's common stock received a cash payment in lieu of such
fractional share. The share and per share information for all periods
presented in this press release has been adjusted to reflect the
reverse stock split. 
Summary of Selected Data 


 
                                                                            
(TCE 
rates expressed in U.S. dollars)                                       
                                             3 months ended  3 months ended 
                                              September 30,   September 30, 
                                                       2012            2011 
                                             --------------  -------------- 
Average number of vessels (1)                          14.0            12.5 
                                             --------------  -------------- 
Number of vessels (as of the last day of the                                
 periods reported)                                       14              14 
                                             --------------  -------------- 
Average age of operational fleet (in years)                                 
 (2)                                                   10.6            11.0 
                                             --------------  -------------- 
Ownership days (3)                                    1,288           1,148 
                                             --------------  -------------- 
Available days (4)                                    1,157           1,122 
                                             --------------  -------------- 
Voyage days for fleet (5)                             1,087           1,117 
                                             --------------  -------------- 
Fleet utilization (6)                                  93.9%           99.6%
                                             --------------  -------------- 
Average per-day TCE rate (7)                 $       15,201  $       18,817 
                                             --------------  -------------- 
Average per day OPEX per vessel              $        4,878  $        5,682 
                                             --------------  -------------- 
                                                                            
                                                                            
                                             9 months ended  9 months ended 
                                              September 30,   September 30, 
                                                       2012            2011 
                                             --------------  -------------- 
Average number of vessels (1)                          14.2            11.5 
                                             --------------  -------------- 
Number of vessels (as of the last day of the                                
 periods reported)                                       14              14 
                                             --------------  -------------- 
Average age of operational fleet (in years)                                 
 (2)                                                   10.6            11.0 
                                             --------------  -------------- 
Ownership days (3)                                    3,904           3,139 
                                             --------------  -------------- 
Available days (4)                                    3,704           3,089 
                                             --------------  -------------- 
Voyage days for fleet (5)                             3,556           3,074 
                                             --------------  -------------- 
Fleet utilization (6)                                  96.0%           99.5%
                                             --------------  -------------- 
Average per-day TCE rate (7)                 $       15,560  $       20,166 
                                             --------------  -------------- 
Average per day OPEX per vessel              $        5,239  $        5,478 
                                             --------------  -------------- 

 
(1) Average number of vessels is the number of vessels that
constituted our fleet for the relevant period, as measured by the sum
of the number of days each vessel was a part of our fleet during the
period divided by the number of calendar days in that period.  
(2) Average age of operational fleet is calculated as at September
30, 2012 and 2011, respectively.  
(3) Ownership days are the total calendar days each vessel in the
fleet was owned by the Company for the relevant period.  
(4) Available days for the fleet are the ownership days after
subtracting for off-hire days with major repairs, dry-docking or
special or intermediate surveys or transfer of ownership.  
(5) Voyage days are the total days the vessels were in our possession
for the relevant period after subtracting all off-hire days incurred
for any reason (including off-hire for dry-docking, major repairs,
special or intermediate surveys).   
(6) Fleet utilization is calculated by dividing voyage days by
available days for the relevant period.  
(7) Represents the weighted average per-day TCE rates, of our entire
fleet. TCE rate is a measure of the average daily revenue performance
of a vessel on a per voyage basis. Our method of calculating TCE rate
is determined by dividing voyage revenues (net of voyage expenses and
amortization of fair value of above/below market acquired time
charter agreements) by voyage days for the relevant time period.
Voyage expenses primarily consist of port, canal and fuel costs that
are unique to a particular voyage, which would otherwise be paid by
the charterer under a time charter contract, as well as commissions.
TCE rate is a standard shipping industry performance measure used
primarily to compare period-to-period changes in a shipping company's
performance despite changes in the mix of charter types (i.e., spot
charters, time charters and bareboat charters) under which the
vessels may be employed between the periods. We included TCE
revenues, a non- GAAP measure, as it provides additional meaningful
information in conjunction with voyage revenues, the most directly
comparable GAAP measure, because it assists our management in making
decisions regarding the deployment and use of its vessels and in
evaluating their financial performance. 
Unaudited Consolidated Condensed Statement of Operations 


 
                                                                            
                              3 months    3 months    9 months    9 months  
(Expressed in thousands of      ended       ended       ended       ended   
 U.S. dollars except for      September   September   September   September 
 share and per share data)    30, 2012    30, 2011    30, 2012    30, 2011  
                             ----------  ----------  ----------  ---------- 
                                                                            
                                                                            
Revenues:                                                                   
Voyage Revenues                  18,346      26,186      68,016      78,356 
Management Fee Income                71          69         208          84 
                             ----------  ----------  ----------  ---------- 
                                 18,417      26,255      68,224      78,440 
Expenses:                                                                   
Voyage expenses                  (3,424)     (5,932)    (17,453)    (16,953)
Vessel operating expenses        (6,283)     (6,523)    (20,452)    (17,194)
Dry-docking expenses             (1,971)       (247)     (2,997)     (1,605)
Depreciation                     (9,535)    (12,675)    (28,732)    (36,684)
Management fees                       -           -           -         (54)
(Loss)/gain on derivative                                                   
 instruments                        (23)       (114)         41         (93)
General and administrative                                                  
 expenses                        (1,988)     (2,996)     (7,325)    (10,010)
Vessel impairment loss         (303,219)          -    (303,219)          - 
Gain on time charter                                                        
 agreement termination                -           -       6,454       1,806 
Other operational gain            1,891          21       2,031       9,261 
Other operational loss             (663)          -        (663)     (4,050)
Loss on sale of vessel              (26)          -      (3,190)          - 
                                                                            
                             ----------  ----------  ----------  ---------- 
Operating (loss) / income      (306,824)     (2,211)   (307,281)      2,864 
                             ----------  ----------  ----------  ---------- 
                                                                            
Interest and finance costs       (1,905)     (1,086)     (6,047)     (3,127)
Interest and other income            52         301         191         647 
                             ----------  ----------  ----------  ---------- 
Total other expenses, net        (1,853)       (785)     (5,856)     (2,480)
                             ----------  ----------  ----------  ---------- 
                                                                            
                             ----------  ----------  ----------  ---------- 
Net (loss) / income            (308,677)     (2,996)   (313,137)        384 
                             ==========  ==========  ==========  ========== 
                                                                            
(Loss)/ earnings per share,                                                 
 basic*                          (57.15)      (0.59)     (58.09)       0.08 
                             ==========  ==========  ==========  ========== 
(Loss)/ earnings per share,                                                 
 diluted*                        (57.15)      (0.59)     (58.09)       0.08 
                             ==========  ==========  ==========  ========== 
Weighted average number of                                                  
 shares outstanding, basic    5,400,827   5,118,131   5,390,553   4,525,501 
                             ==========  ==========  ==========  ========== 
Weighted average number of                                                  
 shares outstanding, diluted  5,400,827   5,118,131   5,390,553   4,528,822 
                             ==========  ==========  ==========  ========== 
                                                                            
he computation of basic earnings per share is based on the weighted
average number of common shares outstanding during the period, as
adjusted to reflect the reverse stock split effective October 15,
2012

  
Unaudited Consolidated Condensed Balance Sheets                              
(Expressed in thousands of U.S. dollars)                                     
September 30,  December 31,
ASSETS                                                2012          2011     
------------- -------------
Cash and restricted cash(current and non-                                   
 current)                                               39,375        44,755
Other current assets                                    13,364        12,166
Fixed assets, net                                      295,520       638,532
Fair value of above market acquired time charter        15,931        20,699
Other non-current assets                                 1,401         1,776 
------------- -------------
TOTAL ASSETS                                           365,591       717,928 
============= ============= 
Total debt                                             234,114       266,140
Total other liabilities                                 13,419        17,575 
------------- -------------
TOTAL LIABILITIES                                      247,533       283,715 
STOCKHOLDERS' EQUITY                                   118,058       434,213 
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             365,591       717,928 
============= ============= 


 
Unaudited Cash Flow Data

  
9 months      9 months    
ended          ended     
September     September  
(Expressed in thousands of U.S. dollars)           30, 2012      30, 2011    
------------  ------------  
Net cash provided by operating activities              19,475        35,574  
Net cash provided by / (used in) investing                                  
 activities                                            14,061      (108,932) 
Net cash (used in) / provided by financing                       
activities                                           (36,518)       76,750  


 
EBITDA and adjusted EBITDA Reconciliation
 Star Bulk considers EBITDA
to represent net income before interest, income 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 United States generally accepted
accounting principles, ("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 liquidity position it is used by our lenders as a measure of our
compliance with certain loan covenants and because the Company
believes that it presents useful information to investors regarding
the Company's ability to service and/or incur indebtedness. 
 
The Company excluded amortization of the fair value of above/below
market acquired time charters associated with time charters attached
to vessels acquired, vessel impairment loss, loss on bad debts
non-cash gain or loss related to early time charter termination,
non-cash gain or loss related to sale of vessel, change in fair value
of derivatives and stock-based compensation expense recognized during
the period, to derive adjusted EBITDA. The Company excluded the above
non-cash items to derive adjusted EBITDA because the Company believes
that these non-cash items do not reflect the operational cash inflows
and outflows of the Company's fleet.
 
The following table reconciles net cash provided by operating
activities to EBITDA and adjusted EBITDA: 

  
3 months    3 months    9 months    9 months   
ended       ended       ended       ended   
(Expressed in thousands of    September   September   September   September 
 U.S. dollars                 30, 2012    30, 2011    30, 2012    30, 2011  
Net cash provided by                                                        
 operating activities               121      10,994      19,475      35,574 
Net increase in current                                                     
 assets                           7,053       3,880       4,309       5,891 
Net (decrease)/increase in                                                  
 operating liabilities,                                                     
 excluding current portion                                                  
 of long term debt               (1,789)     (3,684)      4,157      (2,739)
Amortization of fair value                                                  
 of above/below market                                                      
 acquired time charter                                                      
 agreements                      (1,601)       (765)     (4,768)       (313)
Vessel impairment loss         (303,219)          -    (303,219)          - 
Other non-cash charges              (32)        (13)        (83)        (18)
Amortization of deferred                                                    
 finance charges                   (118)        (64)       (375)       (221)
Stock - based compensation          (72)       (575)     (1,474)     (1,203)
Change in fair value of                                                     
 derivatives                          -        (114)         82        (163)
Total other expenses, net         1,853         785       5,856       2,480 
Loss on sale of vessel              (26)          -      (3,190)          - 
Gain from Hull & Machinery                                                  
 claim received                     541          20         681         260  
----------  ----------  ----------  ---------- 
EBITDA                         (297,289)     10,464    (278,549)     39,548  
==========  ==========  ==========  ========== 
Less:                                                                        
Change in fair value of                                                     
 derivatives                                      -         (82)          - 
Plus:                                                                        
Amortization of fair value                                                  
 of above/below market                                                      
 acquired time charter                                                      
 agreements                       1,601         765       4,768         313  
Stock-based compensation             72         575       1,474       1,203  
Vessel impairment loss          303,219           -     303,219           - 
Loss on sale of vessel               26                   3,190             
Change in fair value of                                                     
 derivatives                          -         114           -         163  
----------  ----------  ----------  ---------- 
Adjusted EBITDA                   7,629      11,918      34,020      41,227  
==========  ==========  ==========  ==========  


 
Conference Call details: 
 Star Bulk's management team will host a
conference call to discuss the Company's financial results today,
November 30 at 11 a.m., Eastern Standard Time (EST). 
 
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1(866) 819-7111 (from the
US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from
outside the US). Please quote "Star Bulk."
 
A replay of the conference call will be available until December 7,
2012. The United States replay number is 1(866) 247-4222; from the UK
0(800) 953-1533; the standard international replay number is (+44)
(0) 1452 550 000 and the access code required for the replay is:
3128607#. 
 
Slides and audio webcast: 
 There will also be a simultaneous live
webcast over the Internet, through the Star Bulk website
(www.starbulk.com). Participants to the live webcast should register
on the website approximately 10 minutes prior to the start of the
webcast.
 
About Star Bulk
 Star Bulk is a global shipping company providing
worldwide seaborne transportation solutions in the dry bulk sector.
Star Bulk's vessels transport major bulks, which include iron ore,
coal and grain and minor bulks which include bauxite, fertilizers and
steel products. Star Bulk was incorporated in the Marshall Islands on
December 13, 2006 and maintains executive offices in Athens, Greece.
Its common stock trades on the Nasdaq Global Market under the symbol
"SBLK". Currently, Star Bulk has an operating fleet of fourteen dry
bulk carriers. The total fleet consists of six Capesize and eight
Supramax dry bulk vessels with a combined cargo carrying capacity of
1,475,005 deadweight tons. The average age of our current operating
fleet is approximately 10.6 years. 
 
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," "anticipate," "intends,"
"estimate," "forecast," "project," "plan," "potential," "may,"
"should," "expect," "pending" 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, examination by the
Company's management of historical operating trends, data contained
in its records and other data available from third parties. Although
the Company believes that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to
predict and are beyond the Company's control, the Company cannot
assure you that it will achieve or accomplish these expectations,
beliefs or projections. 
 
In addition to these important factors, other important factors that,
in the Company's view, could cause actual results to differ
materially from those discussed in the forward-looking statements
include the strength of world economies and currencies, general
market conditions, including fluctuations in charter rates and vessel
values, changes in demand for dry bulk shipping capacity, changes in
the Company's operating expenses, including bunker prices, drydocking
and insurance costs, the market for the Company's vessels,
availability of financing and refinancing, changes in governmental
rules and regulations or actions taken by regulatory authorities,
potential liability from pending or future litigation, general
domestic and international political conditions, potential disruption
of shipping routes due to accidents or political events, vessels
breakdowns and instances of off-hires 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. The
information set forth herein speaks only as of the date hereof, and
the Company disclaims any intention or obligation to update any
forward-looking statements as a result of developments occurring
after the date of this communication.
 
 
 
Contacts: 
 
Company:
 
Simos Spyrou
CFO
Star Bulk Carriers Corp.
c/o Star Bulk Management Inc.
40 Ag. Konstantinou Av.
Maroussi 15124
Athens, Greece
www.starbulk.com
 
Investor Relations / Financial Media:
Nicolas Bornozis
President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: starbulk@capitallink.com
www.capitallink.com 


 
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