Star Bulk Carriers Corp. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2013

Star Bulk Carriers Corp. Reports Financial Results for the Third Quarter and 
Nine Months Ended September 30, 2013 
ATHENS, GREECE -- (Marketwired) -- 11/26/13 --  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, 2013. 
Adjusted Net income for the third quarter of 2013 was $2.3 million
compared to an adjusted net loss of $3.8 million during the same
quarter in 2012. 
Adjusted Net income for the nine months ended September 30, 2013 was
$7.6 million compared to an adjusted net loss of $0.6 million during
the same period of the previous year. 
Financial Highlights 


 
                                                                            
                                                                            
(Expressed in                                                               
 thousands of                                                               
 U.S. dollars,                                                              
except for daily                                                            
 rates and per       3 months       3 months       9 months      9 months   
 share data)          ended          ended          ended         ended     
                  September 30,  September 30,  September 30, September 30, 
                       2013           2012           2013          2012     
                  -------------  -------------  ------------- ------------- 
Total Revenues    $      17,727  $      18,417  $      53,545 $      68,224 
EBITDA (1)        $       5,380  $    (297,289) $      19,122 $    (278,549)
Adjusted EBITDA                                                             
 (1)              $       7,809  $       7,629  $      24,944 $      34,020 
Net (loss)/income $        (168) $    (308,677) $       1,796 $    (313,137)
Adjusted Net                                                                
 income / (loss)  $       2,261  $      (3,759) $       7,618 $        (568)
(Loss) / earnings                                                           
 per share basic                                                            
 and diluted      $       (0.01) $      (57.15) $        0.19 $      (58.09)
Adjusted                                                                    
 earnings/ (loss)                                                           
 per share basic                                                            
 and diluted      $        0.13  $       (0.70) $        0.82 $       (0.11)
Average Number of                                                           
 Vessels                   13.0           14.0           13.4          14.2 
Time Charter                                                                
 Equivalent Rate                                                            
 (TCE)            $      14,652  $      15,201  $      14,414 $      15,560 
Average OPEX per                                                            
 day per vessel   $       5,675  $   4,878 (3)  $       5,622 $       5,239 
Net Cash G&A                                                                
 Expenses per                                                               
 vessel (2)       $       1,338  $       1,432  $       1,439 $       1,445 

 
(1) Please see the section of this release entitled EBITDA and
Adjusted EBITDA Reconciliation for a reconciliation of EBITDA and
Adjusted EBITDA to Net Cash Provided by Operating Activities, which
is the most directly comparable financial measure calculated and
presented in accordance with generally accepted accounting principles
in the United States ("U.S. GAAP").
 (2) Net Cash G&A Expenses per
vessel is calculated by deducting from General and administrative
expenses (net of stock based compensation expense) Management Fee
Income and then dividing with ownership days.
 (3) The low level of
Average OPEX per day per vessel for the third quarter of 2012 was
affected by the main engine failure of Star Polaris, which resulted
to an off hire period of 92 days. 
Spyros Capralos, President and Chief Executive Officer of Star Bulk,
commented: "It is with great pleasure to see the rapid transformation
of Star Bulk, to continue for another quarter. On October 7th we
successfully completed a follow on offering of 8,050,000 of our
common shares, raising approximately $70.8 million, which
demonstrated the increasing confidence and support of our Company by
investors. Along with our backstopped rights issue completed in July
2013, we have raised a total of approximately $150 million, providing
us with the capital needed to implement our growth strategy. 
We continue to execute our strategy to expand and upgrade our fleet
at a low point in the shipping cycle. During the quarter we increased
our newbuilding program to 9 vessels, and on November 18, 2013 we
announced the acquisition of 2 modern Ultramaxes, to be named Star
Challenger and Star Fighter, for a total purchase consideration of
$58.1 million, with expected deliveries in early December 2013 and
January 2014 respectively. As of today, we have ordered or acquired a
total of 11 modern and high quality vessels at historically low
prices, and we remain committed to successfully implement our
contracted fleet expansion and renewal program. In addition, we
extended our ship management services to 5 additional third party
vessels, bringing our operational fleet to 24 vessels currently, 15
owned and 9 managed. 
On the operational side, we are pleased to report positive results
for another quarter, as our Adjusted Net Income was $2.3 million for
the quarter ended September 30, 2013 compared to an Adjusted Net Loss
of $3.8 million for the third quarter of 2012. Going forward, we
expect to further improve our operational performance, through our
on-going cost containment efforts, and through the economies of scale
from the management of a larger fleet. 
Lastly, the recent improvement in freight rates demonstrates the
upside potential in the dry bulk industry. Moving past the last
years' abnormal fleet supply growth, we believe that the positive
demand fundamentals will be better reflected in freight rates and
vessel values, supporting a market recovery to historical levels.
Once Star has completed its current expansion phase, we expect the
larger and more competitive asset base to substantially increase the
company's cash flow. In this context, the company will examine in the
coming years the most appropriate ways to return capital to
shareholders that have entrusted us to capitalize on the current
opportunity in the dry bulk market." 
Simos Spyrou, Chief Financial Officer of Star Bulk, commented: "We
are pleased to report another profitable quarter on an adjusted
basis. The financial results of this quarter are inclusive of the
scheduled dry docking of 2 of our vessels, namely Star Aurora and
Star Theta, along with the associated expenditure of $1.6 million. 
For the 3rd quarter of 2013, our net daily G&A expenses excluding
non-cash items, stood at $1,338 per vessel, 7% lower than the same
period last year. This is due to the expansion of our third party
managed fleet to a total of 9 dry bulk vessels during this quarter,
while we expect to experience the full positive impact from this
activity going forward, mainly through economies of scale and cost
synergies. 
Following two successful equity capital raises, our cash stands today
at $107.8 million. Our total debt stands at $190.7 million, bringing
our net debt to $82.9 million. Furthermore, we have already paid a
total amount of $72.9 million in the form of advances for the 11
vessels on order or acquired. The above figures are inclusive of the
$5.8 million down payment we have made in relation to the acquisition
of Star Challenger and Star Fighter announced on November 18, 2013,
representing the 10% of their aggregate purchase consideration. 
We are currently in active discussions with leading financial
institutions to secure commercial debt financing for these vessels.
We estimate that our total equity CAPEX requirements for the 9
newbuilding and the 2 second hand vessels from today until the end of
2014 will be approximately $26 million." 
Owned Fleet Profile (As of November 26, 2013) 


 
                                                                            
                                                                            
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 Challenger *           Ultramax          61,462                    2012
Star Fighter *              Ultramax          61,462                    2013
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                             15       1,413,526                        

 
* In November, 2013, we entered into two agreements to acquire from
two unaffiliated third parties, two 61,462 dwt Ultramax vessels,
Supra Challenger I and Supra Challenger II, renamed to Star
Challenger and Star Fighter, for approximately $58.1 million in
aggregate. These vessels are expected to be delivered to Star Bulk in
early December 2013 and January 2014 respectively.  


 
                                                                            
Newbuildings                                                                
--------------------                                                        
Vessel Name                     Type             DWT  Expected Delivery Date
-------------------- --------------- --------------- -----------------------
Hull 1342               Newcastlemax         208,000         First Half 2016
Hull 1343               Newcastlemax         208,000         First Half 2016
Hull NE 198             Newcastlemax         209,000      First Quarter 2016
Hull 1338                   Capesize         180,000     Fourth quarter 2015
Hull 1339                   Capesize         180,000      First Quarter 2016
Hull NE 196                 Ultramax          61,000     Fourth Quarter 2015
Hull NE 197                 Ultramax          61,000     Fourth Quarter 2015
Hull 5040                   Ultramax          60,000     Second Quarter 2015
Hull 5043                   Ultramax          60,000      Third Quarter 2015
                                                                            
Total                              9       1,227,000                        

 
Third Party Vessels Under Management (As of November 26, 2013) 


 
                                                                            
                                                                            
Drybulk Vessels                                                             
-------------------                                                         
Vessel Name                Type                DWT            Year Built    
------------------- ------------------ ------------------ ------------------
Big Bang                      Capesize            180,181               2007
Big Fish                      Capesize            177,643               2004
Obelix                        Capesize            181,433               2011
Pantagruel                    Capesize            174,109               2004
Marto                          Panamax             74,732               2001
Renascentia                    Panamax             74,470               1999
Maiden Voyage                 Supramax             58,722               2012
Serenity I                    Supramax             55,742               2006
Strange Attractor             Supramax             53,688               2006
                                                                            
Total                                9          1,030,720                   

 
Third Quarter 2013 and 2012 Results (*) 
For the third quarter of 2013, total voyage revenues amounted to
$17.3 million compared to $18.3 million for the third quarter of
2012. This decrease was mainly attributed to the lower charter rates
for some of our vessels and to the lower average number of vessels
during the third quarter of 2013 compared to the third quarter of
2012, due to the sale of the Star Sigma in March 2013. Revenues from
the management of third party vessels amounted to $0.5 million in the
third quarter of 2013, versus $0.1 million in the third quarter of
2012, a 541% increase, due to the increase in the number of third
party vessels under our management. 
For the third quarter of 2013, operating income amounted to $1.4
million compared to operating loss of $306.8 million for the third
quarter of 2012. Net loss for the third quarter of 2013 amounted to
$0.2 million or a loss of $0.01 per basic and diluted share, based on
16,807,757 shares, which is the weighted average number of basic and
diluted shares. Net loss for the third quarter of 2012 amounted to a
loss of $308.7 million, or a loss of $57.15 per share calculated on
5,400,827 shares, which was the weighted average number of basic and
diluted shares. 
Net loss for the third quarter of 2013 includes the following
non-cash items: 


 
--  Amortization of fair value of above market acquired time charters of
    $1.6 million, or $0.10 per basic and diluted share, associated with
    time charters attached to vessels acquired in the third quarter of
    2011, namely the Star Big and the Star Mega, which time charters are
    amortized over the remaining period of the time charter as a decrease
    to voyage revenues.
--  Expenses of $0.4 million, or $0.03, per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the shares issued to directors and employees.
--  Unrealized loss of $0.4 million, or $0.02 per basic and diluted share,
    in connection with the mark to market valuation of the Company's
    derivatives.

  
Excluding these non-cash items, net income for the third quarter of
2013 would amount to $2.3 million, or $0.13 per basic and diluted
share, based on 16,807,757 shares, which is the weighted average
number of basic and diluted shares. 
Net loss for the third quarter of 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, namely the Star Big and the Star Mega, which are amortized over
    the remaining period of the time charter as a decrease to voyage
    revenues.
--  Expenses of $0.1 million, or $0.01 per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the shares issued to directors and employees.

  
Excluding these non-cash items, net loss for the third quarter of 2012
would amount to a loss of $3.8 million, or a $0.70 per basic and
diluted share, based on 5,400,827 shares, which was the weighted
average number of basic and diluted shares. 
Adjusted EBITDA for the third quarter of 2013 and 2012, excluding the
above items, was $7.8 million and $7.6 million, respectively. A
reconciliation of EBITDA and adjusted EBITDA to net cash provided by
cash flows from operating activities is set forth below under the
heading EBITDA and Adjusted EBITDA Reconciliation. 
We owned and operated an average of 13.0 and 14.0 vessels during the
third quarter of 2013 and 2012, respectively, which earned an average
Time Charter Equivalent, or TCE, rate of $14,652 per day and $15,201
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 third quarter of 2013, voyage expenses decreased by $1.0
million to $2.4 million compared to $3.4 million for the third
quarter of 2012. Under voyage charter agreements, we are responsible
for all voyage costs, as opposed to time charter agreements where
these are paid by the charterer.  
Operating expenses and dry-docking expenses for the third quarter of
2013 and 2012 totaled to $8.4 million and $8.3 million,
respectively.Depreciation expense decreased to $4.0 million for the
third quarter of 2013, compared to $9.5 million for the third quarter
of 2012. The decrease was due to: 
a) the impairment losses recognized as of September 30, 2012, in
connection with our oldest Capesize vessel, the Star Sigma, and the
entire fleet of our eight Supramax vessels, which resulted in a
further reduction in the net book value for the respective vessels. 
b) the lower average number of vessels of 13.0 during the third
quarter of 2013 compared to 14.0 during the third quarter of 2013,
due to the sale of the Star Sigma in March 2013. 
General and administrative expenses during the third quarter of 2013
increased to $2.5 million compared to $2.0 million during the third
quarter of 2012. This increase was due to higher stock based
compensation expense by $0.4 million in third quarter of 2013
compared to the same period in 2012. In 2012, $1.3 million of stock
based compensation expense negatively impacted the results of the
first quarter of the year. In addition the average number of
employees was increased during the third quarter of 2013 compared to
the same period in 2012, due to increase in average number of third
party vessels under management from 1 vessel in third quarter of 2012
to 5.1 vessels in third quarter of 2013. The management fee income
earned during the third quarter of 2013 and 2012 was $0.5 million and
$0.1 million, respectively. Net General and Administrative expenses
(General and Administrative Expenses netted for non-cash items and
for Management Fee Income) per vessel stand at $1,338 per day,
reduced by 7% versus same quarter last year.  
During the third quarter of 2012, we recorded an impairment loss of
$303.2 million in the book value of our oldest Capesize vessel, Star
Sigma, and the whole fleet of our eight Supramax vessels, in order
for the carrying values of the respective vessels to reflect their
fair market values. 
For the third quarter of 2013, other operational gain amounted to
$1.6 million and mainly consisted of non-recurring revenues of $0.3
million and $0.8 million which represented the payment of the
installments due to us, under settlement agreements for three
commercial claims and a gain of $0.6 million regarding a hull and
machinery claim. For the third quarter of 2012, other operational
gain totaled to $1.9 million and included an amount of $1.4 million,
which represented a settlement of a commercial claim, and an amount
of $0.5 million regarding a gain from hull and machinery claim. 
In September 2010, we 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 $0.8
million described in other operational gain above, during the third
quarter of 2013, we incurred an expense of $0.3 million which is
included under other operational loss. For the third quarter of 2012,
other operational loss totaled $0.7 million, representing the expense
incurred by us towards a third party, pursuant to the terms of the
same agreement as described above. The expense of $0.7 million was
incurred in connection to the settlement of a commercial claim in the
amount of $1.4 million described above in other operational gain. 
In June 2013, we entered into two interest rate swap agreements to
fix forward our floating interest rate liabilities for the $70.0
million bilateral term loan facility with Credit Agricole CIB for the
vessels Star Polaris and Star Borealis. The non-cash loss from the
mark to market valuation of these swap agreements for the third
quarter of 2013, amounted to $0.4 million. Loss on derivative
instruments for the third quarter of 2012 amounted to $0.02 million. 
For the third quarter of 2013 and 2012, interest and finance costs
totaled $1.7 million and $1.9 million, respectively. The decrease is
mainly attributable to lower average outstanding debt during the
third quarter of 2013 amounting to $195.8 million compared to $236.6
million for the third quarter of 2012, which was off-set by an
increase in weighted average interest rates in third quarter of 2013
due to the amendment of our loan agreements, reached in December of
2012.  
(*) Amounts relating to variations in period -- on -- period
comparisons shown in this section are derived from the actual numbers
in our books and records 
Nine months ended September 30, 2013 and 2012 Results (*) 
For the nine months ended September 30, 2013, total voyage revenues
amounted to $52.6 million compared to $68.0 million for the same
period of 2012. This decrease was mainly attributed to the lower
charter rates for some of our vessels due to the decline in the dry
bulk charter market, the lower number of voyage charters performed by
us during the nine months ended September 30, 2013 compared to the
same period of 2012 (which also led to reduced voyage expenses) and
the lower average number of vessels during the nine months ended
September 30, 2013 compared to the same period in 2012, due to the
sale of the Star Sigma in March 2013. 
Revenues from the management of third party vessels amounted to $0.9
million for the nine months ended September 30, 2013, versus $0.2
million during the same period last year, a 338% increase, due to the
increase in the number of third party vessels under our management. 
For the nine months ended September 30, 2013, operating income
amounted to $7.1 million compared to operating loss of $307.3 for the
same period of 2012. Net income for the nine months ended September
30, 2013, amounted to $1.8 million, or $0.19 per basic and diluted
share, based on 9,254,316 and 9,273,410 weighted average number of
shares, respectively. Net loss for the nine months ended September
30, 2012, amounted to $313.1 million, or a loss of $58.09 per share
calculated on 5,390,553 shares, which was the weighted average number
of basic and diluted shares. 
Net income for the nine months ended September 30, 2013, includes the
following non-cash items:  


 
--  Amortization of fair value of above market acquired time charters of
    $4.8 million, or $0.51 per basic and diluted share, associated with
    time charters attached to vessels acquired in the third quarter of
    2011, namely the Star Big and the Star Mega, which time charters are
    amortized over the remaining period of the time charter as a decrease
    to voyage revenues.
--  Expenses of $1.0 million, or $0.11 per basic and diluted share,
    relating to the amortization of stock based compensation recognized in
    connection with the shares issued to directors and employees.
--  Unrealized gain of $0.1 million, or $0.01 per basic and diluted share,
    in connection with the mark to market valuation of the Company's
    derivatives.
--  Loss on sale of vessel of $0.1 million or $0.01 per basic and diluted
    share in connection with the sale of the Star Sigma, that concluded in
    March of 2013.

  
Excluding these non-cash items, net income for the nine months ended
September 30, 2013 would amount to $7.6 million, or $0.82 per basic
and diluted share, respectively, based on 9,254,316 and 9,273,410
weighted average number of shares, respectively. 
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 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
    $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, namely the Star Big and the Star Mega, which time charters are
    amortized over the remaining period of the time charter as a decrease
    to voyage revenues.
--  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 shares issued to directors and employees.
--  Unrealized gain of $0.1 million, or $0.02 per basic and diluted share,
    in connection with the mark to market valuation of the Company's
    derivatives.
--  Loss on sale of vessel of $3.2 million or $0.59 per basic and diluted
    share in connection with the sale of the Star Ypsilon, in February of
    2012.

  
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 was the
weighted average number of basic and diluted shares. 
Adjusted EBITDA for the nine months ended September 30, 2013 and
2012, excluding the above items, was $24.9 million and $34.0 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 13.4 and 14.2 vessels during the
nine months ended September 30, 2013 and 2012, respectively, earning
an average TCE rate of $14,414 and $15,560 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 decreased to $6.9 million for the nine months ended
September 30, 2013, compared to $17.5 million for the same period in
2012. The decrease is attributable to: 
a) voyage expenses of $4.1 million related to chartering-in third
party vessels to serve shipments under a Contract of Affreightment
(COA) recorded during the nine months ended September 30, 2012, while
there were no corresponding expenses during same period of 2013. The
respective revenues earned from the COA during the nine months ended
September 30, 2012, was $3.4 million. 
 b) the decreased level of
spot market activity during the nine months ended September 30, 2013
compared to the same period of 2012. Under voyage charter agreements
all voyage costs are borne and paid by us, as opposed to time charter
agreements where they are paid by the charterer. The revenues earned
from the voyage charter agreements during the nine months ended
September 30, 2013 and 2012, were $8.1 million and $14.7 million,
respectively, after excluding COAs.  
For the nine months ended September 30, 2013 and 2012, vessel
operating expenses totaled to $20.5 million.  
For the nine months ended September 30, 2013, dry-docking expenses
totaled $2.2 million compared to $3.0 million for the same period of
2012. During both periods, we had one Capesize vessel and one
Supramax vessel that underwent periodic dry-docking surveys.  
Depreciation expense decreased to $12.0 million for the nine months
ended September 30, 2013, compared to $28.7 million for the same
period of 2012. The decrease was due to: 
a) the impairment losses recognized as of September 30, 2012, in
connection with our oldest Capesize vessel, the Star Sigma, and the
entire fleet of our eight Supramax vessels, which resulted in a
further reduction in the net book value for the respective vessels. 
b) the lower average number of vessels of 13.4 during the nine months
ended September 30, 2013 compared to 14.2 during the nine months
ended September 30, 2012. 
For the nine months ended September 30, 2013, general and
administrative expenses totaled $7.2 million compared to $7.3 million
for the same period in 2012. If we exclude the stock based
compensation expense for the nine months ended September 30, 2013 and
2012, which amounted to $1.0 million and $1.5, respectively, the
general and administrative expenses would be slightly increased due
to the higher number of employees during the nine months ended
September 30, 2013, compared to the same period in 2012, as a result
of the growth of our managed fleet. The management fee income earned
during the nine months ended September 30, 2013 and 2012, was $0.9
million and $0.2 million, respectively. 
During the nine months ended September 30, 2012, we recorded an
impairment loss of $303.2 million in the book value of our oldest
Capesize vessel, Star Sigma, and the whole fleet of our eight
Supramax vessels, in order for the carrying values of the respective
vessels to reflect their fair market values.  
Gain on time charter agreement termination totaled $6.45 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 received as
compensation for the early redelivery of vessel the Star Sigma by its
previous charterer. No gain on time charter agreement was recorded
during the nine months ended September 30, 2013. 
Other operational gain amounted to $3.3 million during the nine
months ended September 30, 2013 and mainly consisted of non-recurring
revenues of $0.3 million and $2.0 which represented the payment of
installments due to us under settlement agreements for three
commercial claims and a gain of $1.0 million regarding a hull and
machinery claim. Other operational gain amounting to $2.0 million
during the nine months ended September 30, 2012, mainly consisted 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 loss amounted to $0.9 million during the nine
months ended September 30, 2013 representing the cash payment due by
us 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 $0.9 million was incurred in connection to the settlement
amount of $2.0 million described in other operational gain above.
Other operational loss totaled $0.7 million during the nine months
ended September 30, 2012, due to the payment made by us to a third
party pursuant to the terms of the same agreement as described above.
The payment of $0.7 million was made in connection to the settlement
of a commercial claim in the amount of $1.4 million described in
other operational gain.  
For the nine months ended September 30, 2013, loss on sale of vessel
of $0.1 million represents a loss on sale of the vessel Star Sigma
that concluded in March of 2013. The vessel was delivered to her new
owners on April 10, 2013. For the nine months ended September 30,
2012, loss on sale of vessel of $3.2 million represented a loss on
sale of the vessel Star Ypsilon that concluded in February of 2012.  
In June 2013, we entered into two interest rate swap agreements. The
valuation of these as of September 30, 2013, resulted into a non-cash
gain amounting to $0.06 million for the nine months ended September
30, 2013. Gain on derivative instruments for the nine months ended
September 30, 2012, amounted to $0.04 million. 
Interest and finance costs for the nine months ended September 30,
2013, were $5.5 million, while for the nine months ended September
30, 2012, were $6.0 million. The decrease in our interest expenses
was mainly due to decrease in average outstanding debt during the
nine months ended September 30, 2013, amounting to $203.0 million
compared to $246.4 million for the same period in 2012, which was
off-set by an increase in weighted average interest rates for the
nine months ended September 30, 2013, due to the amendment of our
loan agreements, reached in December of 2012. 
(*) Amounts relating to variations in period -- on -- period
comparisons shown in this section are derived from the actual numbers
in our books and records 
Liquidity and Capital Resources 
Cash Flows
 Net cash provided by operating activities for the nine
months ended September 30, 2013 and 2012, was $22.4 million and $19.5
million, respectively. For the nine months ended September 30, 2013,
we earned a daily TCE rate of $14,414 compared to a daily TCE rate of
$15,560 for the nine months ended September 30, 2012.  
Net cash used in investing activities for the nine months ended
September 30, 2013, was $9.9 million. Net cash provided by investing
activities for the nine months ended September 30, 2012, was $14.1
million. For the nine months ended September 30, 2013 net cash used
in investing activities consisted of $29.8 million paid for advances
for two of our newbuilding vessels and other fixed assets, $8.3
million representing proceeds from sale of the vessel Star Sigma
which concluded in March 2013 and under which the vessel was
delivered to her new owner on April 10, 2013, a decrease of $7.6
million in restricted cash and insurance proceeds amounting to $4.0
million. Net cash provided by investing activities for the nine
months ended September 30, 2012, consisted of the proceeds from sale
of the vessel 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 offset by $0.1 million regarding additions to
vessels cost and other fixed assets. 
Net cash provided by financing activities for the nine months ended
September 30, 2013, was $48.0 million. Net cash used in financing
activities for the nine months ended September 30, 2012, was $36.5
million. For the nine months ended September 30, 2013, net cash
provided by financing activities consisted of loan installment
payments amounting to $29.7 million and payment of financing fees
amounting to $0.3 million, proceeds from the rights offering
amounting to $80.1 million less offering expenses of $2.1 million.
For the nine months ended September 30, 2012, net cash used in
financing activities consisted of loan instalment payments amounting
to $32.0 million, cash dividend payments of $3.6 million and $0.9
million paid for the repurchase of 61,730 shares under the terms of
the Company's share re-purchase plan, which expired on December 31,
2012. 
Recent Developments 
On October 7, 2013, we offered 8,050,000 common shares, in an
underwritten public offering price of $8.80 per share less
underwriters' discount. All of the shares in the offering were sold
by us, which resulted in gross proceeds of approximately $70.8
million. The proceeds are expected to be primarily used for the
acquisition of the Company's newbuilding vessels and general
corporate purposes. 
On November 18, 2013, we announced that we have entered into
agreements to acquire from two unaffiliated third parties, two 61,462
dwt Ultramax vessels, Supra Challenger I and Supra Challenger II,
built 2012 and 2013, respectively, for a total consideration of $58.1
million. The vessels renamed to "Star Challenger" and "Star Fighter",
are expected to be delivered to Star Bulk in early December 2013 and
by January 15th, 2014 respectively. 
Summary of Selected Data 


 
                                                                            
                                                                            
(TCE rates expressed in U.S.                                                
dollars)                                                                    
                                         3 months ended      3 months ended 
                                     September 30, 2013  September 30, 2012 
                                     ------------------  ------------------ 
Average number of vessels (1)                      13.0                14.0 
Number of vessels (2)                                13                  14 
Average age of operational fleet (in                                        
 years) (3)                                        10.7                10.6 
Ownership days (4)                                1,196               1,288 
Available days (5)                                1,142               1,157 
Voyage days for fleet (6)                         1,126               1,087 
Fleet utilization (7)                              98.6%               93.9%
Average per-day TCE rate (8)         $           14,652  $           15,201 
Average per day OPEX per vessel (9)  $            5,675  $            4,878 
Average Net Cash G&A expenses per                                           
 vessel (10)                         $            1,338  $            1,432 
                                                                            
                                                                            
                                                                            
                                                                            
                                         9 months ended      9 months ended 
                                     September 30, 2013  September 30, 2012 
                                     ------------------  ------------------ 
Average number of vessels (1)                      13.4                14.2 
Number of vessels (2)                                13                  14 
Average age of operational fleet (in                                        
 years) (3)                                        10.7                10.6 
Ownership days (4)                                3,650               3,904 
Available days (5)                                3,596               3,704 
Voyage 
days for fleet (6)                         3,504               3,556 
Fleet utilization (7)                              97.4%               96.0%
Average per-day TCE rate (8)         $           14,414  $           15,560 
Average per day OPEX per vessel (9)  $            5,622  $            5,239 
Average Net Cash G&A expenses per                                           
 vessel (10)                         $            1,439  $            1,445 

 
(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)
As of the last day of the periods reported 
 (3) Average age of
operational fleet is calculated as at September 30, 2013 and 2012,
respectively.
 (4) Ownership days are the total calendar days each
vessel in the fleet was owned by the Company for the relevant period. 
(5) 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. 
 (6)
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). 
 (7) Fleet utilization is
calculated by dividing voyage days by available days for the relevant
period. 
 (8) 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.
 Average per day OPEX per vessel is
calculated by dividing Vessel operating expenses by ownership days. 
(10) Net Cash G&A Expenses per vessel is calculated by deducting from
General and administrative expenses (net of stock based compensation
expense) Management Fee Income and then dividing with ownership days. 
Unaudited Consolidated Condensed Statements of Operations 


 
                                                                            
                                                                            
                                                                            
    (Expressed in                                                           
  thousands of U.S.    3 months      3 months      9 months      9 months   
  dollars except for     ended         ended         ended         ended    
 share and per share   September     September     September     September  
        data)          30, 2013      30, 2012      30, 2013      30, 2012   
                     ------------  ------------  ------------  ------------ 
                                                                            
                                                                            
Revenues:                                                                   
Voyage Revenues            17,272        18,346        52,634        68,016 
Management Fee                                                              
 Income                       455            71           911           208 
                     ------------  ------------  ------------  ------------ 
Total revenues             17,727        18,417        53,545        68,224 
                     ------------  ------------  ------------  ------------ 
                                                                            
Expenses:                                                                   
Voyage expenses            (2,375)       (3,424)       (6,880)      (17,453)
Vessel operating                                                            
 expenses                  (6,787)       (6,283)      (20,519)      (20,452)
Dry-docking expenses       (1,605)       (1,971)       (2,177)       (2,997)
Depreciation               (3,957)       (9,535)      (12,027)      (28,732)
(Loss)/Gain on                                                              
 derivative                                                                 
 instruments                 (378)          (23)           60            41 
General and                                                                 
 administrative                                                             
 expenses                  (2,499)       (1,988)       (7,208)       (7,325)
Vessel impairment                                                           
 loss                           -      (303,219)            -      (303,219)
Gain on time charter                                                        
 agreement                                                                  
 termination                    -             -             -         6,454 
Other operational                                                           
 gain                       1,641         1,891         3,288         2,031 
Other operational                                                           
 loss                        (338)         (663)         (900)         (663)
Loss on sale of                                                             
 vessel                        (6)          (26)          (87)       (3,190)
                                                                            
                     ------------  ------------  ------------  ------------ 
Operating income /                                                          
 (loss)                     1,423      (306,824)        7,095      (307,281)
                     ------------  ------------  ------------  ------------ 
                                                                            
Interest and finance                                                        
 costs                     (1,711)       (1,905)       (5,505)       (6,047)
Interest and other                                                          
 income                       120            52           206           191 
                     ------------  ------------  ------------  ------------ 
Total other                                                                 
 expenses, net             (1,591)       (1,853)       (5,299)       (5,856)
                     ------------  ------------  ------------  ------------ 
                                                                            
                     ------------  ------------  ------------  ------------ 
Net income/ (loss)           (168)     (308,677)        1,796      (313,137)
                     ============  ============  ============  ============ 
                                                                            
Earnings/ (loss) per                                                        
 share, basic               (0.01)       (57.15)         0.19        (58.09)
                     ============  ============  =======
=====  ============ 
Earnings/ (loss) per                                                        
 share, diluted             (0.01)       (57.15)         0.19        (58.09)
                     ============  ============  ============  ============ 
Weighted average                                                            
 number of shares                                                           
 outstanding, basic    16,807,757     5,400,827     9,254,316     5,390,553 
                     ============  ============  ============  ============ 
Weighted average                                                            
 number of shares                                                           
 outstanding,                                                               
 diluted               16,807,757     5,400,827     9,273,410     5,390,553 
                     ============  ============  ============  ============ 

 
Unaudited Consolidated Condensed Balance Sheets 


 
                                                                            
                                                                            
                                                                            
                                                                            
(Expressed in thousands of U.S. dollars)                                    
                                                                            
ASSETS                                         September 30,   December 31, 
                                                    2013           2012     
                                              --------------- --------------
Cash and restricted cash                               75,296         22,276
Other current assets                                    8,216         15,687
                                              --------------- --------------
TOTAL CURRENT ASSETS                                   83,512         37,963
                                              =============== ==============
                                                                            
Advances for vessels under construction and                                 
 acquisition of vessels and other assets               28,632              -
Vessels and other fixed assets, net                   271,993        291,207
Restricted cash                                         9,370          9,570
Fair value of above market acquired time                                    
 charter                                                9,579         14,330
Other non-current assets                                1,288          1,636
                                              --------------- --------------
TOTAL ASSETS                                          404,374        354,706
                                              =============== ==============
                                                                            
Current portion of long-term debt                      17,766         28,766
Other current liabilities                              12,243         13,684
                                              --------------- --------------
TOTAL CURRENT LIABILITIES                              30,009         42,450
                                              =============== ==============
                                                                            
Long-term debt                                        176,658        195,348
Other non-current liabilities                             201            162
                                              --------------- --------------
TOTAL LIABILITIES                                     206,868        237,960
                                              =============== ==============
                                                                            
STOCKHOLDERS' EQUITY                                  197,506        116,746
                                                                            
                                              --------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            404,374        354,706
                                              =============== ==============

 
*As of September 30, 2013, we had $84,666 thousand in cash which
included $73,409 thousand free cash and $11,257 thousand restricted
cash. Restricted cash consisted of $4,257 thousand deposited in
pledged accounts and $7,000 thousand minimum liquidity required by
our loan agreements. 
Unaudited Cash Flow Data 


 
                                                                            
                                                                            
                                             9 months ended  9 months ended 
                                              September 30,   September 30, 
(Expressed in thousands of U.S. dollars)          2013            2012      
                                             --------------  -------------- 
                                                                            
Net cash provided by operating activities            22,431          19,475 
                                                                            
Net cash (used in)/provided by investing                                    
 activities                                          (9,931)         14,061 
                                                                            
Net cash provided by/(used in) financing                                    
 activities                                          47,959         (36,518)

 
EBITDA and Adjusted EBITDA Reconciliation 
We consider 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, or U.S. GAAP, and our calculation of EBITDA
may not be comparable to that reported by other companies. EBITDA is
included herein because it is a basis upon which we assess our
liquidity position it is used by our lenders as a measure of our
compliance with certain loan covenants and because we believe that it
presents useful information to investors regarding our ability to
service and/or incur indebtedness. 
We excluded amortization of the fair value of above market acquired
time charters associated with time charters attached to vessels
acquired, vessel impairment loss, non-cash 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. We excluded the above non-cash items to derive adjusted
EBITDA because we believe that these non-cash items do not reflect
the operational cash inflows and outflows of our fleet. 
The following table reconciles net cash provided by operating
activities to EBITDA and adjusted EBITDA: 


 
                                                                            
                       3 months      3 months      9 months      9 months   
(Expressed in            ended         ended         ended         ended    
 thousands of U.S.     September     September     September     September  
 dollars               30, 2013      30, 2012      30, 2013      30, 2012   
                     ------------  -----------
-  ------------  ------------ 
Net cash provided by                                                        
 operating                                                                  
 activities                 7,469           121        22,431        19,475 
Net                                                                         
 (increase)/decrease                                                        
 in current assets           (114)        7,053        (4,539)        4,309 
Net (decrease)/                                                             
 increase in                                                                
 operating                                                                  
 liabilities,                                                               
 excluding current                                                          
 portion of long                                                            
 term debt                 (1,644)       (1,789)        1,170         4,157 
Amortization of fair                                                        
 value of above                                                             
 market acquired                                                            
 time charter                                                               
 agreements                (1,601)       (1,601)       (4,751)       (4,768)
Vessel impairment                                                           
 loss                           -      (303,219)            -      (303,219)
Other non-cash                                                              
 charges                      (10)          (32)          (39)          (83)
Amortization of                                                             
 deferred finance                                                           
 charges                     (116)         (118)         (408)         (375)
Stock - based                                                               
 compensation                (444)          (72)       (1,044)       (1,474)
Change in fair value                                                        
 of derivatives              (378)            -            60            82 
Total other                                                                 
 expenses, net              1,591         1,853         5,299         5,856 
Loss on sale of                                                             
 vessel                        (6)          (26)          (87)       (3,190)
Gain from Hull &                                                            
 Machinery claim              633           541         1,030           681 
                     ------------  ------------  ------------  ------------ 
EBITDA                      5,380      (297,289)       19,122      (278,549)
                     ============  ============  ============  ============ 
Less:                                                                       
                                                                            
Change in fair value                                                        
 of derivatives                 -             -           (60)          (82)
Plus:                                                                       
                                                                            
Amortization of fair                                                        
 value of above                                                             
 market acquired                                                            
 time charter                                                               
 agreements                 1,601         1,601         4,751         4,768 
Stock-based                                                                 
 compensation                 444            72         1,044         1,474 
Vessel impairment                                                           
 loss                           -       303,219             -       303,219 
Change in fair value                                                        
 of derivatives               378             -             -             - 
Loss on sale of                                                             
 vessel                         6            26            87         3,190 
                     ------------  ------------  ------------  ------------ 
Adjusted EBITDA             7,809         7,629        24,944        34,020 
                     ============  ============  ============  ============ 

 
Conference Call details:
 Our management team will host a conference
call to discuss our financial results today, November 26th at 11
a.m., Eastern 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 3rd,
2013. 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 fifteen dry
bulk carriers. The total fleet consists of five Capesize two Ultramax
and eight Supramax dry bulk vessels with a combined cargo carrying
capacity of 1,413,526 deadweight tons. The average age of our current
operating fleet is approximately 9.5 years. Additionally, we have
nine third party dry bulk vessels under our management, four
Capesize, two Panamax and three Supramax vessels with a combined
cargo carrying capacity of 1,030,720 deadweight tons. We have also
entered into agreements for the construction of nine fuel efficient
dry bulk vessels, three Newcastlemax vessels, two Capesize vessels
and four Ultramax vessels, with a combined cargo carrying capacity of
1,227,000 deadweight tons. All of the newbuilding vessels are
expected to be delivered during 2015 and 2016. 
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
Email: info@starbulk.com 
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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