FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of February 2007
NORDIC AMERICAN TANKER SHIPPING LIMITED
(Translation of registrant's name into English)
LOM Building
27 Reid Street
Hamilton, HM 11
Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [__]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)7: ___
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [__] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): ________.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto as Exhibit 1 is a press release issued by Nordic
American Tanker Shipping Limited on February 14, 2007 announcing its dividends
and earnings in respect of the fourth quarter 2006.
Exhibit 1
[GRAPHIC OMITTED]
Nordic American Tanker Shipping Ltd. (NYSE:NAT) -
Announces Dividend and Earnings in Respect of the 4th Quarter of 2006
Hamilton, Bermuda, February 14th, 2007
Nordic American Tanker Shipping Limited (the "Company") today announced its
results for the 4th quarter of 2006. In spite of the mild weather in the Western
Hemisphere and being lower than the spot market in the 3rd quarter of 2006, the
market for our suezmax fleet was still strong during the 4th quarter of 2006.
The Company has now declared a dividend for 37 consecutive quarters. For the
last four quarters, including the dividend to be paid in respect of the 4th
quarter of 2006, a total of $4.97 has been declared in dividends, which
represents 14.9% of the average daily share price over the same period. The
market for our vessels so far in 2007 is well above the level achieved in the
4th quarter of 2006.
Highlights:
-----------
o The Board of Directors has declared a dividend of $1.00 per share in
respect of the 4th quarter of 2006.
o The dividend is expected to be paid on or about March 1st, 2007 to
shareholders of record as of February 22nd, 2007.
o Delivery of the three newly-acquired vessels did not occur until November
and December, while the newly-issued shares from our follow-on offering
were outstanding as of October 11th. As a result of this timing difference,
our dividend and earnings per share were impacted negatively in respect of
the fourth quarter of 2006. The one time dilutive effect of this timing
difference is approximately $0.17 per share.
o After taking into account a one time non-cash charge of $3.3 million ($0.14
per share) associated with the follow-on offering in October 2006, net
income for the 4th quarter of 2006 was $0.52 per share based on the average
number of shares outstanding during the period.
o The Company closed a follow-on offering on October 11, which provided net
proceeds to the Company of $173.1 million based on an offering price of
$32.00 per share. The weighted average number of shares outstanding during
the 4th quarter of 2006 was 26,276,292. As of February 14, 2007, there are
26,914,088 shares issued and outstanding, the same share count as at the
end of 2006.
o At the end of the year our fleet consisted of 12 modern double hull suezmax
tankers.
o Following a minor incident, one vessel underwent repair in drydock during
the 4th quarter of 2006, resulting in a total of approximately 20 days
offhire during the period.
Dividends per Share, Earnings per Share and Financial Information:
------------------------------------------------------------------
Operating cash flow(1) was $26.6 million for the 4th quarter of 2006 compared to
$32.8 million for the 4th quarter of 2005. Operating cash flow was $29.7 million
for the 3rd quarter of 2006.
The Board has declared a dividend of $1.00 per share in respect of the 4th
quarter of 2006. This compares with a dividend of $1.88 per share in respect of
the 4th quarter of 2005, which was the highest dividend ever paid by the
Company. The dividend in respect of the 3rd quarter of 2006 was $1.32 per share.
After a one time non-cash charge(2) of $3.3 million associated with the
follow-on offering in October 2006, net income for the 4th quarter of 2006 was
$13.7 million, or $0.52 per share (EPS). This compares to a net income of $25.1
million or $1.51 per share for the very strong 4th quarter of 2005. In the 3rd
quarter of 2006, net income was $20.3 million, or $0.97 per share.
Earnings per share for the whole year of 2006 were $3.14 compared to $3.03 for
the year 2005. Dividends per share in respect of 2006 were $4.97 compared to
$4.47 per share for the year 2005.
Our stated policy concerning the calculation of dividend per share in a quarter
when an offering has taken place is set forth in footnote 3 later in this
release. (3)
For the 4th quarter of 2006, operating costs of our vessels and general and
administrative costs were largely according to our expectations. Across the
shipping industry there is an upward pressure on vessel operating costs - in
particular crewing costs, lubricating oil costs and repair and maintenance
costs.
The Company is not involved in freight or interest derivatives.
We currently estimate that our average cash breakeven for our fleet of twelve
vessels is approximately $9,500 per day per vessel. The breakeven rate is the
amount of average daily revenues for our vessels which would cover our vessel
operating expenses, voyage expenses, if any, cash general and administrative
expenses, interest expenses and other financial charges.
After the follow-on offering in October 2006 and the delivery of the three
vessels during the 4th quarter of 2006, our net debt is approximately $14.5
million per vessel. As of February 14, 2007, we have approximately $326 million
undrawn under our $500 million revolving credit facility with maturity in 2010.
There is no repayment obligation during the term of the facility, and the
Company pays interest only on drawn amounts, and a commitment fee for undrawn
amounts. Our strong balance sheet combined with our credit facility provides
room for expansion of the fleet.
After a minor incident which took place in late September, one of our vessels
was in drydock approximately 20 days during the 4th quarter of 2006. None of our
other vessels was in dry dock during the 4th quarter of 2006.
The table below shows the number of vessel revenue days over the last eight
quarters for all our vessels, reflecting the growth of the Company.
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Period 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06
---------------------------------------------------------------------------------------------------------------
Revenue days 371 549 576 697 720 808 817 919
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The market capitalization of the Company also reflects the growth of NAT.
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Period 2005 2006 Feb. 12,
2007
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Market Capitalization as of December 31, (in millions) $479.2 $918.7 $1,010.1
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For further details on our financial results, please see later in this release.
The Fleet:
----------
Eleven of the Company's twelve vessels are trading in the spot market or on spot
related terms, while one vessel remains employed on a long term fixed rate
charter.
The three vessels which we took over in November and December of 2006 produced
111 revenue days in the 4th quarter of 2006. During the 1st quarter of 2007, we
have 12 vessels in operation - increasing the revenue days compared with
previous quarters.
At the end of 2004 the Company had four vessels; at the end of 2005 the Company
had eight vessels; and at the turn of the year 2006/2007 the Company had twelve
vessels.
Vessel Dwt * Employment
------ ----- ----------
Gulf Scandic 151,475 Long term fixed charter
Nordic Hawk 151,475 Spot related terms
Nordic Hunter 151,400 Spot related terms
Nordic Voyager 149,591 Spot
Nordic Fighter 153,328 Spot
Nordic Freedom 163,455 Spot
Nordic Discovery 153,328 Spot
Nordic Saturn 157,332 Spot
Nordic Jupiter 157,411 Spot
Nordic Cosmos 159,998 Spot
Nordic Moon 159,999 Spot
Nordic Apollo 159,999 Spot
Total 1,868,791
* Scantling draft is the maximum draft at which a vessel complies with the
governing strength requirements of classification societies
Performing a scheduled 10-year special survey, one vessel was out of service 22
days as from mid-January this year.
The Market:
The average spot market rates, according to the Imarex Tanker Index, were
$39,727 per day for modern suezmax tankers during the 4th quarter of 2006
compared with $64,002 per day for the 4th quarter of 2005. While lower than the
3rd quarter of 2006 the market during the 4th quarter of 2006 was still healthy
for our vessels - a situation that has continued into 2007. The average Imarex
Tanker Index was $43,574 per day from January 1 to and including February 12th,
2007. Short-term spot rates are notoriously difficult to predict. We expect that
they may continue to fluctuate significantly.
The world's suezmax fleet stood at 346 vessels at the end of the 4th quarter of
2006, compared to 324 vessels at the end of the 4th quarter of 2005. Twenty-two
new vessels were delivered during 2006 while no vessels were scrapped. The total
suezmax order book stood at 123 vessels at the end of the December 2006. At the
same time, 72 vessels were single hull, which are expected to be phased out from
the tanker trade by 2010. Out of the 72 single hull suezmax vessel shipping
companies worldwide have decided to convert 17 vessels into purposes other than
employment in the tanker sector. (Source: Fearnresearch).
Generally, single hull tankers are facing challenges in the market place as the
customers prioritize double hull tonnage. We believe that this development is
advantageous for our Company, which owns double hull tankers only.
Going forward, deliveries of new tankers from shipyards over the next few years
can be estimated with a high degree of certainty. The shipyards are expected to
operate at more or less full capacity with their present orderbooks, and new
orders placed for suezmax tankers are typically for delivery in 2010 or later.
The level of the tanker market ahead is above all dependent on the development
of the world economy.
Shareholders' Rights Plan
-------------------------
The Board of Directors has adopted a shareholder rights plan designed to enable
the Company to protect shareholder interests in the event that an unsolicited
attempt is made for a business combination with or takeover of the Company. The
Company believes that the shareholder rights plan should enhance the Board's
negotiating power on behalf of shareholders in the event of a coercive offer or
proposal. The Company is not currently aware of any such offers or proposals,
and is adopting the plan as a matter of prudent corporate governance. Several
other listed shipping companies have this kind of arrangement in place.
The terms of the shareholder rights plan are set forth in a filing that the
Company has made with the Securities and Exchange Commission this morning.
Rights under the plan are expected to be issued to shareholders of record as of
the close of business on February 27, 2007.
Strategy going forward:
-----------------------
The operations of the Company are based on its unique and successful operating
model which combines a transparent and predictable full dividend payout policy
with high spot market exposure and a strong balance sheet. Focus is also on a
cost effective management of the Company, both in regard to the operating
expenses of the vessels and general & administrative expenses, in order to
maintain a low cash break-even level for operations.
The Company's exposure to the spot market is based on our analysis showing that
the spot market over time can be expected to produce higher revenues on average
than the time charter market. With a strong balance sheet, a full dividend
payout policy can be maintained without accumulating cash reserves on the
balance sheet. A certain amount of term charter coverage is being contemplated
from time to time.
The main objective of the Company is to maximize its total return(4) for
shareholders via a transparent, predictable and simple strategic platform. In
our communication with the stock market we encourage investors wishing to have
tanker exposure to assess our operating model and to invest in our Company.
Growth continues to be an inherent part of the operating model and further
expansion can be expected. The expansion of the Company is bolstering its
earnings and dividend capacity per share.
* * * * *
-------------------------
(1) Operating cash flow is a non-GAAP financial term often used by investors to
measure financial performance of shipping companies. Operating cash flow
represents income from vessel operations before depreciation and non-cash
administrative charges. Please see page 8 for a reconciliation of this
non-GAAP measure as used in this release to the most directly comparable
GAAP financial measure.
(2) The Management Agreement formerly provided that the Manager would receive
1.25% of any gross charterhire paid to us. In order to further align the
Manager's interests with those of the Company, the Manager agreed with us
to amend the Management Agreement to eliminate this payment, and we have
issued to the Manager restricted common shares equal to 2% of our
outstanding common shares. Any time additional common shares are issued,
the Manager will receive additional restricted common shares to maintain
the number of common shares issued to the Manager at 2% of our total
outstanding common shares. These restricted shares are non-transferable for
three years from issuance.
(3) Our policy is to declare quarterly dividends to shareholders, substantially
equal to our net operating cash flow during the previous quarter after
reserves as the Board of Directors may from time to time determine are
required, taking into account contingent liabilities, the terms of our
Credit Facility, our other cash needs and the requirements of Bermuda law.
However, if we declare a dividend in respect of a quarter in which an
equity issuance has taken place, we calculate the dividend per share as our
net operating cash flow for the quarter (after taking into account the
factors described above) divided by the weighted average number of shares
over that quarter. Net operating cash flow represents net income plus
depreciation and certain non-cash administrative charges. The dividend paid
is the calculated dividend per share multiplied by the number of shares
outstanding at the end of the quarter.
(4) The total return is based on the change in the price for our common shares
plus dividends reinvested in our common shares.
AMOUNTS IN USD '000
----------------------------------------------------------------------------------------------------------------
CONDENSED STATEMENTS Three Months Ended Twelve Months Ended
OF OPERATION -------------------------------------- ------------------------------
Dec 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31,
2006 2006 2005 2006 2005
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------------------------------------------
NET VOYAGE REVENUE 34,269 36,547 37,571 135,348 86,129
----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Vessel operating expenses (6,105) (5,706) (3,510) (21,102) (11,221)
Depreciation (8,456) (7,257) (5,796) (29,254) (17,529)
General and administrative costs (5,188)* (1,549) (1,617) (12,750)** (8,492)**
----------------------------------------------------------------------------------------------------------------
(19,749) (14,512) (10,923) (63,106) (37,242)
----------------------------------------------------------------------------------------------------------------
Income from vessel operation 14,520 22,035 26,648 72,242 48,887
----------------------------------------------------------------------------------------------------------------
OTHER ITEMS
Interest income 962 118 129 1,602 850
Interest expense (1,737) (1,831) (1,674) (6,451) (3,420)
----------------------------------------------------------------------------------------------------------------
(775) (1,713) (1,545) (4,849) (2,570)
----------------------------------------------------------------------------------------------------------------
NET INCOME 13,745 20,322 25,103 67,393 46,317
----------------------------------------------------------------------------------------------------------------
Earnings per average number of shares 0.52 0.97 1.51 3.14 3.03
Weighted average number of shares 26,276,292 21,046,400 16,644,496 21,476,196 15,263,622
Common shares outstanding 26,914,088 21,046,400 16,644,496 26,914,088 16,644,496
----------------------------------------------------------------------------------------------------------------
*) The G&A for the three months ended Dec. 31, 2006 include non-cash charges of $3 .6m which are charges related
to share based compensation and the 2004 Stock Option Plan.
**) The G&A for the twelve months ended Dec. 31, 2005 and Dec. 31, 2006 include non-cash charges of $5.0m and
$7.9m respectively which are charges related to share based compensation and the 2004 Stock Option Plan.
--------------------------------------------------------------------------------
CONDENSED BALANCE SHEETS Dec 31, Dec. 31,
2006 2005
(unaudited)
--------------------------------------------------------------------------------
Cash deposits 11,729 14,240
Account receivables 13,416 14,840
Other current assets 19,333 11,481
Vessels 752,478 463,933
Other long term assets 3,224 1,350
--------------------------------------------------------------------------------
Total Assets 800,180 505,844
--------------------------------------------------------------------------------
Accounts payable 3,006 1,562
Accrued liabilities 11,728 3,410
Long-term debt 173,500 130,000
Shareholders' equity 611,946 370,872
--------------------------------------------------------------------------------
Total liablilities and shareholders' equity 800,180 505,844
--------------------------------------------------------------------------------
NORDIC AMERICAN TANKER SHIPPING LIMITED
-----------------------------------------------------------------------------
CONDENSED STATEMENTS OF Twelve Months Ended
CASH FLOW ---------------------------
Dec 31, Dec. 31,
2006 2005
(unaudited)
-----------------------------------------------------------------------------
OPERATING ACTIVITIES
-----------------------------------------------------------------------------
Net cash from Operating Activitites 107,067 51,056
-----------------------------------------------------------------------------
FINANCING ACTIVITIES 287,904 161,967
Net proceeds from sale of Common Stock
Proceeds from use of Credit Facility 274,500 135,000
Repayment of debt (231,000) (5,000)
Loan facility costs (591) (1,075)
Dividends paid (122,591) (64,279)
-----------------------------------------------------------------------------
Net Cash provided by (used for) Financing 208,222 226,613
Activities
-----------------------------------------------------------------------------
INVESTING ACTIVITIES
Investment in Vessels (317,800) (294,161)
-----------------------------------------------------------------------------
Net cash used by investing activitites (317,800) (294,161)
-----------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents (2,511) (16,492)
Beginning Cash and Cash Equivalents 14,240 30,732
-----------------------------------------------------------------------------
Ending Cash and Cash Equivalents 11,729 14,240
-----------------------------------------------------------------------------
NORDIC AMERICAN TANKER SHIPPING LIMITED
Reconciliation of non-GAAP financial measures
(Amounts in USD '000)
Three Months Ended Twelve Months Ended
-------------------------------- --------------------------
Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31,
2006 2006 2005 2006 2005
-----------------------------------------------------------------------------------------------------------
Voyage revenue 45,142 44,599 47,623 175,520 117,110
Voyage expenses (10,873) (8,052) (10,052) (40,172) (30,981)
-----------------------------------------------------------------------------------------------------------
Net voyage revenue (1) 34,269 36,547 37,571 135,348 86,129
-----------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Three Months Ended
-----------------------------------------
Dec. 31, Sep.30, Dec. 31,
2006 2006 2005
-------------------------------------------------------------------------------------
Income from vessel operations 14,520 22,035 26,648
Depreciation 8,456 7,257 5,796
Share Based Compensation/ Stock Option Plan 3,691 393 440
-------------------------------------------------------------------------------------
Operating Cash Flow (2) 26,667 29,685 32,884
(1) Net voyage revenues represents voyage revenues less voyage expenses such as
bunker fuel, port fees, canal tolls and brokerage commissions. Net voyage
revenues is included because certain investors use this data to measure a
shipping company's financial performance. Net voyage revenues is not
required by accounting principles generally accepted in the United States
and should not be considered as an alternative to net income or any other
indicator of the Company's performance required by accounting principles
generally accepted in the United States.
(2) Operating cash flow represents income from vessel operations before
depreciation and non-cash administrative charges. Operating cash flow is
included because certain investors use this data to measure a shipping
company's financial performance. Operating cash flow is not required by
accounting principles generally accepted in the United States and should not
be considered as an alternative to net income or any other indicator of the
Company's performance required by accounting principles generally accepted
in the United States.
CAUTIONARY STATEMENT REGARDING 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," "intend," "estimate," "forecast," "project," "plan,"
"potential," "will," "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, 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. We undertake no obligation to update
any forward-looking statement, whether as a result of new information, future
events or otherwise.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, general market conditions, including
fluctuations in charter rates and vessel values, changes in demand in the tanker
market, as a result of changes in OPEC's petroleum production levels and world
wide oil consumption and storage, changes in our operating expenses, including
bunker prices, drydocking and insurance costs, the market for our 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
important factors described from time to time in the reports filed by the
Company with the Securities and Exchange Commission, including the prospectus
and related prospectus supplement, our Annual Report on Form 20-F, and our
reports on Form 6-K.
Contacts:
Scandic American Shipping Ltd
Manager for:
Nordic American Tanker Shipping Ltd.
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: nat@scandicamerican.com
-----------------------
Web-site: www.nat.bm
Rolf Amundsen, Investor Relations
Nordic American Tanker Shipping Ltd.
Tel: +1 800 601 9079 or + 47 908 26 906
Gary Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Herbjorn Hansson, Chairman & CEO
Nordic American Tanker Shipping Ltd.
Tel: +1 866 805 9504 or + 47 901 46 291
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NORDIC AMERICAN TANKER SHIPPING LIMITED
(registrant)
Dated: February 26, 2006 By: /s/ Herbjorn Hansson
--------------------
Herbjorn Hansson
Chairman, Chief Executive
Officer and President
SK 01318 0002 750879