FreeSeas Reports Third Quarter And Nine Month 2010 Financial Results

PIRAEUS, Greece, Nov. 11, 2010 (GLOBE NEWSWIRE) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEZ) ("FreeSeas" or the "Company"), a transporter of dry-bulk cargoes through the ownership and operation of a fleet of Handysize and Handymax vessels, announced today financial results for its third quarter and nine-month period ended September 30, 2010.

Third Quarter 2010 Highlights

• Reported adjusted net income of $0.6 million, or $0.10 basic and diluted earnings per share. Including various non-recurring items, the Company reported a net loss of $9.5 million or $1.51 basic and diluted loss per share. A table reconciling adjusted net income to net income can be found in footnote (1) to this release. All per-share amounts have been adjusted to reflect the Company's 1-for-5 reverse stock split effective October 1, 2010.
• Entered into shipbuilding contracts with a quality Chinese shipyard for the construction of two Handysize dry bulk vessels of approximately 33,600 dwt each for an aggregate purchase price of approximately $48.8 million. The vessels are scheduled for delivery in the second and third quarters of 2012.
• The Company entered into a commitment letter for pre-delivery and post-delivery debt financing up to an amount of $32.4 million from a leading international bank for the financing of the two newbuilding orders.
• Classified the M/V Free Hero, a 1995-built 24,318 dwt Handysize dry bulk vessel, as held for sale as the Company intends to sell it. As a result, posted a non-cash vessel impairment loss of $9.6 million.
• M/V Free Destiny, a 1982-built 25,240 dwt Handysize dry bulk vessel was delivered to its new owners and the Company posted a gain on sale of $0.8 million.

Comments from Management

Mr. Ion Varouxakis, Chairman and CEO, stated, "During the third quarter, we proceeded with the renewal of our fleet by selling the M/V Free Destiny, our oldest vessel, and placing two newbuilding orders at a reputable Chinese shipyard with deliveries expected during 2012. Moving forward, we intend to reshuffle our fleet to release equity, which will be applied to our fleet renewal program. The successful arrangement of pre- and post-delivery financing for our newbuilding orders at favorable financing terms is a testament of our strong relationship with leading financial institutions. We continue to be optimistic about the outlook of the Handysize/Handymax segment reflecting the continuous slippage and cancellation of newbuilding orders, consistent scrapping activity and increasing demand from destinations such as Africa and the Americas. This will result in increased ton-mile transportation requirements from ports with low infrastructure favoring versatile Handy vessels. We believe that we are well positioned to renew our fleet by leveraging on our balance sheet."