Ultrapetrol Reports Financial Results for Second Quarter and FirstHalf 2007

First Half 2007 Revenues Increase to $100.9 Million, a 31% Rise Over 2006 NASSAU, Bahamas, Aug. 14, 2007 (PRIME NEWSWIRE) -- Ultrapetrol (Bahamas) Limited (Nasdaq:ULTR), an industrial transportation company serving marine transportation needs in four core markets (River Business, Offshore Supply Business, Ocean Business and Passenger Business), today announced financial results for the second quarter and first half ended June 30, 2007. First Half 2007 Highlights: * First half 2007 revenues of $100.9 million were 31% higher than first half 2006 revenues of $77.2 million. * First half 2007 EBITDA was $32.8 million, 17% higher than first six months of 2006 EBITDA of $28.0 million. * First half 2007 EBITDA includes a result of $3.1 million of non-cash mark-to-market net loss on Forward Freight Agreement ("FFA") hedges. Excluding this item, first half 2007 EBITDA would be $35.9 million, $7.9 million or 28% higher than the comparable EBITDA for first half 2006. * Net income for first half 2007 was $2.9 million or earnings per share of $0.10 compared to $5.3 million or earnings per share of $0.34 in the first six months of 2006. The Company's first half 2007 net income includes various items that are not included in the published estimates of the Company's financial results by certain securities analysts. Such items and their effects on first half 2007 reported results are as follows: -- An unrealized non-cash mark-to-market net loss on FFA hedges of $3.1 million, or $0.10 per share. -- A deferred income tax charge of $2.4 million, or $0.08 per share, from unrealized foreign currency exchange rate gains on U.S. Dollar denominated debt of our Brazilian subsidiary in the Offshore Supply Business. * The net income for the first half 2007, excluding the effect of both above items, would be $8.4 million, or $0.28 per share. Total revenues for the first half and second quarter 2007 were $100.9 million and $55.4 million, respectively, compared with $77.2 million and $46.9 million, respectively, in the same periods of 2006. Net income for the first half and second quarter 2007 were $2.9 million or $0.10 per share and $0.9 million or $0.03 per share, respectively, compared with $5.3 million or $0.34 per share and $6.9 million or $0.45 per share, respectively, during the same periods in 2006. The 2007 results include a loss of $3.1 million or $0.10 per share of non-cash mark-to-market net loss on FFA hedges and a deferred income tax charge of $2.4 million, or $0.08 per share, from unrealized foreign currency exchange rate gains on U.S. Dollar denominated debt of our Brazilian subsidiary in the Offshore Supply Business. "In the first half and second quarter of 2007 we continue to push forward with our growth strategy, said Felipe Menendez, Ultrapetrol's President and Chief Executive Officer. "We have experienced continuous growth in our River, Offshore Supply and Ocean Businesses, which have shown stronger revenues and EBITDA than in the equivalent periods of 2006. We remain focused on our investments in these sectors as we secure profitable employment for our fleets in the future." Business Segment Highlights River The Company experienced a 27% increase in volume of cargo loaded in the first half of 2007 as compared to the equivalent period of 2006 thus confirming the trend for volume growth experienced in the first quarter 2007. The River Segment EBITDA was $11.3 million in the first half of 2007 or 26% higher than the $9.0 million experienced in the first half of 2006. The Company has signed long-term agreements with several customers to secure growth in volumes going forward. Particularly relevant is a seven-year agreement to carry a minimum of 6.4 million tons and a maximum of 12.4 million tons with a new iron ore producing company that commenced operations in 2006. This new agreement to carry up to 12.4 million tons of iron ore - the largest such contract in our history - and other smaller long term agreements we have concluded really lock in the future growth in the river system with our fleet". Added Mr. Menendez "These agreements are consistent with our policy not to substantially increase freight rates but to gain efficiency through volume. With these agreements, we are more than participating in the volume growth on the river; we are growing our future market share as well." Consistent with the expected growth in volumes the Company has added 33 barges and one pushboat in the last month and expects to add more capacity in the future through the purchase of additional second-hand equipment, the production from its own new shipyard and the barge expansion plans previously announced. Offshore Supply Ultrapetrol took delivery of its fifth vessel in May 2007 and has confirmed the orders for the additional two PSVs in India, with a total of four vessels to be constructed at this yard. It also hopes to be able to confirm the orders for two more vessels (and an option for another two vessels) to be built in China for delivery starting in the second half of 2009. This order is subject (among other things) to the confirmation by the yard that azimuth thrusters can be obtained in time to match the scheduled deliveries. The Offshore Supply Segment generated an EBITDA of $10.2 million in the first half of 2007, or 122% higher than the $4.6 million generated in the equivalent period of 2006. Ocean The Ocean Segment generated an EBITDA of $11.2 million in the first half of 2007, including a non-cash mark-to-market net loss on FFA hedges of $3.1 million. Total EBITDA for this segment, excluding this effect, would be $14.3 million, compared to the EBITDA of our Ocean Segment in the first half of 2006 of $11.9 million, which represents a 20% improvement. We have completed the double hull conversion of our vessels Miranda I and Amadeo and the latter is expected to enter service in South America by the end of August 2007 while the Miranda I already entered back service for her charterers in June 28, 2007. We have also signed a Memorandum of Agreement to sell our Mt Princess Marina which we expect to deliver to her buyers in September 2007. The net proceeds of the sale should be $18.1 million, which should produce a net result for the Company of approximately $10.0 million to be recorded in our third quarter results in 2007. In the second quarter of 2007 the Ocean Segment produced an EBITDA of $4.0 million which, excluding the effect of the non-cash mark-to-market net loss on FFA hedges, would have been of $7.1 million compared with $6.6 million on the second quarter 2006. During the second quarter of 2007, the Miranda I was out of service for 87 days due to her scheduled double hull conversion, which reduced our revenues in the quarter by approximately $1.1 million. Passenger Our Passenger Business experienced a $1.1 million and a $0.3 million negative EBITDA in the first half and second quarter of 2007, respectively, compared with a $2.3 million and a $2.4 million positive EBITDA, respectively, in the same periods of 2006. The negative variance of $3.4 million for the first six months of 2007 results partially ($0.6 million) from the fact that the New Flamenco started its contracted operations in Spain in May this year, compared to a March start date in 2006. However, the contractual revenues per passenger for 2007 are higher than their equivalent in 2006, which should compensate the difference in revenues of this contractual employment in the third and fourth quarters of 2007. The balance of the second quarter negative variance ($2.8 million) resulted from the Blue Monarch, which experienced lower revenues than had been anticipated in the second quarter, as a result of lower occupancy levels and higher fuel costs. While occupancy levels have improved substantially in July and August, it is expected that the Blue Monarch's first year of operation in the Aegean market will not produce positive results. However, Ultrapetrol has taken significant steps towards substantially improving occupancy levels through anticipated agreements with major tour operators for 2008. Ultrapetrol believes that the disclosed non-Generally Accepted Accounting Principles ("GAAP") measures such as EBITDA, and any adjustments thereto, when presented in conjunction with comparable GAAP measures, are useful for investors to use in evaluating the performance of the company. These non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP results to non-GAAP results is presented in the tables that accompany this press release. Investment Community Conference Call Ultrapetrol will host a conference call for investors and analysts on Tuesday, August 14, 2007, at 11:00 a.m. ET. Interested parties may participate in the live conference call by dialing 1-888-399-7388 (toll-free U.S.) or +1-210-234-0004 (outside of the U.S.); passcode: ULTR. Please register at least 10 minutes before the conference call begins. A simultaneous audio webcast of the call also will be available in the Investor Relations section of Ultrapetrol's Web site, www.ultrapetrol.net. A replay of the call will be available for one week via telephone and on Ultrapetrol's Web site starting approximately one hour after the call ends. The replay can be accessed at 1-800-283-4984 (toll-free U.S.) or +1-203-369-3794 (outside of the U.S.); passcode: ULTR. About Ultrapetrol Ultrapetrol is an industrial transportation company serving the marine transportation needs of its clients in the markets on which it focuses. It serves the shipping markets for grain, forest products, minerals, crude oil, petroleum and refined petroleum products, as well as the offshore oil platform supply market and the leisure passenger cruise market, with its extensive and diverse fleet of vessels. These include river barges and push boats, platform supply vessels, tankers, oil-bulk-ore vessels and passenger ships. More information on the company can be found at www.ultrapetrol.net. Forward-Looking Language 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, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include future operating or financial results; pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including dry docking and insurance costs; general market conditions and trends, including charter rates, vessel values, and factors affecting vessel supply and demand; our ability to obtain additional financing; our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities; our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or vessels' useful lives; our dependence upon the abilities and efforts of our management team; changes in governmental rules and regulations or actions taken by regulatory authorities; adverse weather conditions that can affect production of the goods we transport and navigability of the river system; the highly competitive nature of the oceangoing transportation industry; the loss of one or more key customers; fluctuations in foreign exchange rates and devaluations; potential liability from future litigation; 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 following tables set forth Ultrapetrol's summary unaudited condensed consolidated financial information and other operating data. You should carefully read the company's audited consolidated financial statements, and the information set forth in Ultrapetrol's 2006 Annual Report on Form 20-F, as filed with the Securities and Exchange Commission under "Management's discussion and analysis of financial condition and results of operations" for additional financial information about the Company. Ultrapetrol derived its summary unaudited condensed consolidated statement of income data for the six months ended June 30, 2007 and 2006 and for the second quarter ended June 30, 2007 and 2006, from its unaudited consolidated financial statements filed on Form 6-K. Please refer to the footnotes to Ultrapetrol's unaudited condensed consolidated financial statements for a discussion of the basis on which the Company's consolidated financial statements are presented. Condensed Consolidated Balance Sheets (Stated in thousands of U.S. dollars, except par value and share amounts) At June 30, At 2007 December 31, (Unaudited) 2006 -------- -------- ASSETS CURRENT ASSETS Cash and cash equivalents $103,401 $ 20,648 Accounts receivable, net of allowance for doubtful accounts of $284 and $709 in 2007 and 2006, respectively 13,353 17,333 Receivables from related parties 2,778 3,322 Marine and river operating supplies 2,755 3,020 Prepaid expenses 5,742 2,530 Other receivables 9,259 7,917 -------- -------- Total current assets 137,288 54,770 -------- -------- NONCURRENT ASSETS Other receivables 5,549 6,368 Receivables from related parties 1,995 2,280 Restricted cash 9,847 1,088 Vessels and equipment, net 400,527 333,191 Dry dock 9,991 9,673 Investment in affiliates 2,578 2,285 Intangible assets 3,355 3,748 Goodwill 5,015 5,015 Other assets 5,857 6,014 Deferred tax assets 2,233 1,947 -------- -------- Total noncurrent assets 446,947 371,609 -------- -------- Total assets $584,235 $426,379 ======== ======== LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 22,604 $ 13,491 Payable to related parties -- 420 Accrued interest 1,924 1,691 Current portion of long-term financial debt 7,108 4,700 Other payables 6,050 2,469 -------- -------- Total current liabilities 37,686 22,771 -------- -------- NONCURRENT LIABILITIES Long-term debt 180,000 180,000 Financial debt, net of current portion 79,206 34,294 Deferred tax liability 9,262 6,544 Other payables -- 250 -------- -------- Total noncurrent liabilities 268,468 221,088 -------- -------- Total liabilities 306,154 243,859 -------- -------- MINORITY INTEREST 3,325 3,091 -------- -------- SHAREHOLDERS' EQUITY Common stock, $.01 par value: 100,000,000 authorized shares; 33,443,030 and 28,346,952 shares issued and outstanding in 2007 and 2006, respectively 334 283 Additional paid-in capital 265,785 173,826 Accumulated earnings (losses) 8,138 5,231 Accumulated other comprehensive income (loss) 499 89 -------- -------- Total shareholders' equity 274,756 179,429 -------- -------- Total liabilities, minority interest and shareholders' equity $584,235 $426,379 ======== ======== Condensed Consolidated Statement of Income (Unaudited) (Stated in thousands of U.S. dollars, except share and per share data) Six months ended June 30, 2007 compared to the six months ended June 30, 2006 and second quarter ended June 30, 2007 compared to the second quarter ended June 30, 2006. The following table sets forth certain unaudited historical income statement data for the periods indicated above derived from our unaudited condensed consolidated statements of income expressed in thousands of dollars. Second Quarter Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Revenues Attributable to River Business $ 23,497 $ 21,349 $ 45,025 $ 36,939 Attributable to Offshore Supply Business 10,674 6,972 19,070 10,413 Attributable to Ocean Business 12,760 11,053 25,513 20,441 Attributable to Passenger Business 8,495 7,539 11,244 9,363 Total 55,426 46,913 100,852 77,156 Voyage expenses Attributable to River Business (9,628) (8,480) (18,270) (15,931) Attributable to Offshore Supply Business (424) (519) (622) (3,161) Attributable to Ocean Business (166) (103) (495) (422) Attributable to Passenger Business (2,945) (1,303) (3,704) (1,704) Total (13,163) (10,405) (23,091) (21,218) Running cost Attributable to River Business (6,142) (5,285) (11,681) (9,263) Attributable to Offshore Supply Business (3,184) (1,073) (5,808) (1,831) Attributable to Ocean Business (3,539) (3,700) (7,394) (6,874) Attributable to Passenger Business (5,536) (3,764) (8,164) (4,999) Total (18,401) (13,822) (33,047) (22,967) Amortization of dry dock & intangible assets (1,992) (2,317) (4,100) (4,381) Depreciation of vessels and equipment (6,413) (5,189) (12,359) (8,606) Management fees and administrative and commercial expenses (5,375) (3,302) (9,868) (5,540) Other operating income 2 0 65 0 Operating profit 10,084 11,878 18,452 14,444 Financial expense (4,577) (4,820) (9,674) (9,669) Financial income 1,083 55 1,273 273 Net income (loss) on FFAs (3,073) 0 (3,073) 0 Investment in affiliates 124 196 293 724 Other income (expense) (126) 2 (255) 62 Total other expenses (6,569) (4,567) (11,436) (8,610) Income before income taxes and minority interest 3,515 7,311 7,016 5,834 Income taxes (2,388) (29) (3,786) (79) Minority interest (184) (359) (323) (445) Net income for the period $ 943 $ 6,923 $ 2,907 $ 5,310 Basic net income per share $ 0.03 $ 0.45 $ 0.10 $ 0.34 Diluted net income per share $ 0.03 $ 0.44 $ 0.10 $ 0.34 Basic weighted average number of shares 32,076,862 15,500,000 30,027,169 15,500,000 Diluted weighted average number of shares 32,426,164 15,555,475 30,376,471 15,555,475 Condensed Consolidated Statements Of Cash Flows (Unaudited) (Stated in thousands of US Dollars) For the six-month periods ended June 30, -------------------- 2007 2006 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,907 $ 5,310 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of vessels and equipment 12,359 8,606 Amortization of dry docking 3,707 4,185 Expenditure for dry docking (4,025) (736) Net loss on FFAs 3,073 -- Amortization of intangible assets 393 196 Share-based compensation 916 -- Note issuance expenses amortization 536 534 Minority interest in equity of subsidiaries 323 445 Net loss (gain) from investment in affiliates (293) (724) Allowance for doubtful accounts 182 337 Changes in assets and liabilities net of effects from purchase of Otto Candies in 2007 and UP Offshore (Bahamas) and Ravenscroft in 2006: Decrease (increase) in assets: Accounts receivable 3,877 (5,072) Receivable from related parties 829 (654) Marine and river operating supplies 265 (484) Prepaid expenses (3,197) (1,585) Other receivables (617) (1,686) Other 267 (259) Increase (decrease) in liabilities: Accounts payable 5,868 5,224 Payable to related parties (420) (770) Other 5,251 (790) -------- -------- Net cash provided by operating activities 32,201 12,077 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of vessels and equipment (64,863) (16,250) Purchase of Otto Candies companies, net of cash acquired (13,772) -- Funding collateral of FFAs (8,725) -- Decrease in loans to related parties -- 11,391 Other -- 206 -------- -------- Net cash (used in) investing activities (87,360) (4,653) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Payments of long-term financial debt (28,627) (5,009) Proceeds from common shares' public offering, net of issuance costs 91,094 -- Proceeds from long-term financial debt 75,947 -- Other (502) (1,771) -------- -------- Net cash provided by (used in) financing activities 137,912 (6,780) -------- -------- Net increase in cash and cash equivalents 82,753 644 Cash and cash equivalents at the beginning of year $ 20,648 $ 7,914 -------- -------- Cash and cash equivalents at the end of period $103,401 $ 8,558 -------- -------- Supplemental Information The following table reconciles our EBITDA to our net income: ($000) Six Months Ended June 30, 2007 2006 Net Income (loss) $ 2,907 $ 5,310 Plus Financial expense 9,674 9,669 Income taxes 3,786 79 Depreciation and amortization 16,459 12,987 EBITDA (1) $32,826 $28,045 The following tables reconcile our EBITDA to our Operating profit (loss) for the six months ended June 30, 2007 and 2006, on a consolidated and a per segment basis: ($000) Six Months Ended June 30, 2007 Offshore River Supply Ocean Passenger TOTAL Segment operating profit (loss) $ 6,982 $ 8,534 $ 6,620 ($3,684) $ 18,452 Depreciation and amortization 4,610 1,994 7,292 2,563 16,459 Investment in affiliates/Minority interest 18 (338) 290 0 (30) Other, net(3) (284) 16 41 (28) (255) Net income (loss) on FFAs 0 0 (3,073) 0 (3,073) Segment EBITDA $11,326 $10,206 $11,170 ($1,149) $ 31,553 Items not included in segment EBITDA Financial income 1,273 Consolidated EBITDA(2) $ 32,826 Adjustments: Net income (loss) on FFAs (4) 3,073 3,073 Adjusted segment EBITDA $11,326 $10,206 $14,243 ($1,149) Adjusted Con- solidated EBITDA $ 35,899 ($000) Six Months Ended June 30, 2006 Offshore River Supply Ocean Passenger TOTAL Operating profit (loss) $ 5,426 $ 3,922 $ 3,955 $ 1,141 $ 14,444 Depreciation and amortization 3,913 652 7,297 1,125 12,987 Investment in affiliates/Minority interest (198) 50 427 0 279 Other, net(3) (138) 18 182 0 62 Segment EBITDA $ 9,003 $ 4,642 $11,861 $ 2,266 $ 27,772 Items not included in segment EBITDA Financial income 273 Consolidated EBITDA(2) $ 28,045 The following tables reconcile our EBITDA to our Operating profit (loss) for the second quarters ended June 30, 2007 and 2006, on a consolidated and a per segment basis: ($000) Second Quarter Ended June 30, 2007 Offshore River Supply Ocean Passenger TOTAL Operating profit (loss) $ 3,502 $ 4,925 $ 3,363 ($1,706) $ 10,084 Depreciation and amortization 2,325 1,090 3,554 1,436 8,405 Investment in affiliates/Minority interest 14 (200) 126 0 (60) Other, net(3) (131) 16 17 (28) (126) Net income (loss) on FFAs (3,073) (3,073) Segment EBITDA $ 5,710 $ 5,831 $ 3,987 ($298) $ 15,230 Items not included in segment EBITDA Financial income 1,083 Consolidated EBITDA(2) $ 16,313 ($000) Second Quarter Ended June 30, 2006 Offshore River Supply Ocean Passenger TOTAL Operating profit (loss) $ 4,085 $ 3,881 $ 2,624 $ 1,287 $ 11,877 Depreciation and amortization 1,985 652 3,807 1,062 7,506 Investment in affiliates/Minority interest (66) (279) 182 0 (163) Other, net(3) 0 18 (16) 0 2 Segment EBITDA $ 6,004 $ 4,272 $ 6,597 $ 2,349 $ 19,222 Items not included in segment EBITDA Financial income 54 Consolidated EBITDA(2) $ 19,276 (1) EBITDA consists of net income prior to deductions for interest expense and other financial gains and losses, income taxes, depreciation and amortization of dry dock expense and financial gain (loss) on extinguishment of debt. We believe that EBITDA is intended to exclude all items that affect results relating to financing activities. The gains and losses associated with extinguishment of debt are a direct financing item that affects our results, and therefore should not be included in EBITDA. We do not intend for EBITDA to represent cash flows from operations, as defined by GAAP (on the date of calculation), and should not be considered as an alternative to net income as an indicator of our operating performance or to cash flows from operations as a measure of liquidity. This definition of EBITDA may not be comparable to similarly titled measures disclosed by other companies. We have provided EBITDA in this filing because we believe it provides useful information to investors to measure our performance and evaluate our ability to incur and service indebtedness. (2) The reconciliation of our consolidated EBITDA to our Net income is set forth in the first table shown under section "Supplemental Information" in this filing. (3) Individually not significant. (4) At June 30, 2007 the fair market value of the FFAs, resulted in a liability to the Company of $2.9 million. The Company recorded an aggregate net unrealized loss of $3.1 million for the six-month period ended June 30, 2007, which is reflected on the Company's statement of income as Other income (expenses) - Net loss on FFAs for transactions involving FFAs, which has not been designated as hedges for accounting purposes. ULTR-F CONTACT: Media and Investor Inquiries The Abernathy MacGregor Group Charles Burgess 1-866-820-7033