DryShips Inc. Reports Financial and Operating Results for the Third Quarter 2017

ATHENS, GREECE--(Marketwired - Nov 21, 2017) - DryShips Inc. (NASDAQ: DRYS), or DryShips or the Company, a diversified owner of ocean going cargo vessels, today announced its unaudited financial and operating results for the quarter ended September 30, 2017.

Updated Key Information as of November 20, 2017

• Cash and cash equivalents: approximately $25.9 million (or $0.25 per share)
  
  

• Book value of vessels, including advances: approximately $786.5 million (or $7.54 per share)
  
  

• Debt outstanding balance: approximately $185.5 million (or $1.78 per share)
  
  

• Number of Shares Outstanding: 104,274,708
  
  

Recent Developments

• Credit Facility with Sierra Investments Inc.
  
  Following the closing of the previously announced, $100.0 million private placement and $100.0 million rights offering, on October 25, 2017, the Company's credit facility with Sierra Investments Inc., an entity affiliated with Mr. George Economou, the Company's Chairman and Chief Executive Officer, with an outstanding balance of approximately $73.8 million, was refinanced with a new loan facility secured by assets, and which has a loan to value ratio of 50%, a tenor of 5 years, no amortization and a margin of LIBOR plus 4.5%. No arrangement fees or otherwise were charged in connection with the refinancing.
  
  

• Appointment of new director
  
  Mr. George Kokkodis was appointed to the Board of the Company as of November 21, 2017. From 2009 to January 2015, Mr. Kokkodis has been an Independent Business Introducer and Independent Client Advisor of financial investments at BNP Paribas (Suisse) SA, where he was a Senior Private Banker from 2003 to 2009 and the Head of the Greek Private Banking Desk at BNP Paribas London from 1999 to 2003. From 1998 to 1999, Mr. Kokkodis served as Vice President of Private Banking at Merrill Lynch International Bank, London UK and, from 1996 to 1998 held the same position at Merrill Lynch Bank Suisse S.A. Prior to that, Mr. Kokkodis was Vice President of Private Banking at Bankers Trust International PLC, London UK from 1993 to 1996. Mr. Kokkodis holds a Bachelor of Science in Aeronautical Engineering from the Imperial College of Science and Technology and a Master of Science in Aeronautical Engineering from the University of Glasgow. Mr. Kokkodis was a member of the board of directors of MIG Real Estate from April 2011 to September 2015. Mr. Kokkodis was a member of the board of directors of Ocean Rig UDW Inc. from September 2015 to November 2017.
  
  Following the appointment of Mr. Kokkodis, the Company's Board of Directors is now comprised of six directors, four of whom are considered independent under the NASDAQ rules.
  
  

Fleet List

The table below describes the Company's fleet as of November 20, 2017, including vessels the Company has agreed to acquire:

		Year				Gross rate		Redelivery
		Built		DWT		Per day		Earliest		Latest
Drybulk fleet
Panamax:
Bargara		2002		74,832		Spot		N/A		N/A
Capitola		2001		74,816		Spot		N/A		N/A
Catalina		2005		74,432		Spot		N/A		N/A
Ecola		2001		73,391		Spot		N/A		N/A
Levanto		2001		73,925		Spot		N/A		N/A
Ligari		2004		75,583		Spot		N/A		N/A
Maganari		2001		75,941		Spot		N/A		N/A
Majorca		2005		74,477		Spot		N/A		N/A
Marbella		2000		72,561		Spot		N/A		N/A
Mendocino		2002		76,623		Spot		N/A		N/A
Rapallo		2009		75,123		Spot		N/A		N/A
Raraka		2012		76,037		Spot		N/A		N/A
Redondo		2000		74,716		Spot		N/A		N/A
Newcastlemax:
Bacon		2013		205,170		T/C Index Linked		Aug-18		Jan-19
Judd		2015		205,796		$9,350		Dec-17		Apr-18
Marini		2014		205,854		$19,400		Feb-18		May-18
Morandi		2013		205,854		T/C Index Linked		Feb-18		May-18
Kamsarmax:
Castellani		2014		82,129		Spot		N/A		N/A
Kelly		2017		81,300		Spot		N/A		N/A
Matisse		2014		81,128		Spot		N/A		N/A
Nasaka		2014		81,918		Spot		N/A		N/A
Valadon		2014		81,198		Spot		N/A		N/A
Tanker fleet
Very Large Crude Carrier:
Shiraga		2011		320,105		Spot		N/A		N/A
Suezmax:
Samsara		2017		159,855		$18,000 Base rate plus profit share		Mar.-22		May-25
Aframax:
Balla		2017		113,293		Spot		N/A		N/A
Stamos		2012		115,666		Spot		N/A		N/A
Gas Carrier fleet
Very Large Gas Carriers:
Anderida		2017		51,850		$30,000		Jun.-22		Jun.-25
Aisling		2017		51,850		$30,000		Sep.-22		Sep.-25
Mont Fort		2017		51,850		$28,833		Nov.-27		Nov.-27
Mont Gele (1)		2018		51,850		$28,833		Jan.-28		Jan.-28
(1) Expected to be delivered in January 2018.
Offshore Supply fleet
Platform Supply Vessels:
Crescendo		2012		1,457		Laid up		N/A		N/A
Colorado		2012		1,430		Laid up		N/A		N/A
Oil Spill Recovery Vessels:
Indigo		2013		1,401		Laid up		N/A		N/A
Jacaranda		2012		1,360		Laid up		N/A		N/A
Emblem		2012		1,363		Laid up		N/A		N/A
Jubilee		2012		1,317		Laid up		N/A		N/A

Drybulk Carrier, Tanker and Gas Carrier Segments Summary Operating Data (unaudited)
(Dollars in thousands, except average daily results)
Drybulk		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2017		2016		2017
Average number of vessels(1)		19.7		21.8		20.9		16.8
Total voyage days for vessels(2)		1,353		2,002		5,183		4,582
Total calendar days for vessels(3)		1,809		2,002		5,722		4,582
Fleet utilization(4)		74.8%		100.0%		90.6%		100.0%
Time charter equivalent(5)		$3,442		$8,557		$3,238		$7,323
Vessel operating expenses (daily)(6)		$4,926		$6,085		$4,839		$5,917

Tanker		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2017		2016		2017
Average number of vessels(1)		-		4.0		-		2.0
Total voyage days for vessels(2)		-		368		-		543
Total calendar days for vessels(3)		-		368		-		543
Fleet utilization(4)		-		100.0%		-		100.0%
Time charter equivalent(5)		-		$10,932		-		$10,650
Vessel operating expenses (daily)(6)		-		$7,763		-		$11,013

Gas Carrier		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2017		2016		2017
Average number of vessels(1)		-		1.2		-		0.4
Total voyage days for vessels(2)		-		111		-		114
Total calendar days for vessels(3)		-		111		-		114
Fleet utilization(4)		-		100.0%		-		100.0%
Time charter equivalent(5)		-		$28,216		-		$27,860
Vessel operating expenses (daily)(6)		-		$15,678		-		$22,447

(1) Average number of vessels is the number of vessels that constituted the Company's fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of the Company's fleet during the period divided by the number of calendar days in that period.

(2) Total voyage days for fleet are the total days the vessels were in the Company's possession for the relevant period net of dry-docking and laid-up days.

(3) Calendar days are the total number of days the vessels were in the Company's possession for the relevant period including dry-docking days and laid-up days.

(4) Fleet utilization is the percentage of time that the Company's vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. The Company's method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) 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 and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from the Company's vessels, the most directly comparable U.S. GAAP measure, because it assists the Company's management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also 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. Please see below for a reconciliation of TCE rates to voyage revenues.

(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days net of laid-up days for the relevant time period.

Drybulk Carrier, Tanker and Gas Carrier Segments Summary Operating Data (unaudited) - continued
(In thousands of U.S. dollars, except for TCE rate, which is expressed in Dollars, and voyage days)
Drybulk		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2017				2016				2017
Voyage revenues		$	6,809			$	19,203			$	22,032			$	39,916
Voyage expenses			(2,152	)			(2,072	)			(5,251	)			(6,364	)
Time charter equivalent revenues		$	4,657			$	17,131			$	16,781			$	33,552
Total voyage days for fleet			1,353				2,002				5,183				4,582
Time charter equivalent (TCE)		$	3,442			$	8,557			$	3,238			$	7,323

Tanker		Three Months Ended September 30,							Nine Months Ended September 30,
		2016			2017				2016			2017
Voyage revenues		$	-		$	7,466			$	-		$	11,072
Voyage expenses			-			(3,443	)			-			(5,289	)
Time charter equivalent revenues		$	-		$	4,023			$	-		$	5,783
Total voyage days for fleet			-			368				-			543
Time charter equivalent (TCE)		$	-		$	10,932			$	-		$	10,650

Gas Carrier		Three Months Ended September 30,							Nine Months Ended September 30,
		2016			2017				2016			2017
Voyage revenues		$	-		$	3,266			$	-		$	3,316
Voyage expenses			-			(134	)			-			(140	)
Time charter equivalent revenues		$	-		$	3,132			$	-		$	3,176
Total voyage days for fleet			-			111				-			114
Time charter equivalent (TCE)		$	-		$	28,216			$	-		$	27,860

DryShips Inc.
Financial Statements
Unaudited Condensed Consolidated Statements of Operations
(Expressed in Thousands of U.S. Dollars except for share and per share data)		Three Months Ended September 30,								Nine Months Ended September 30,
		2016				2017				2016				2017
REVENUES:
Voyage revenues		$	12,086			$	29,934			$	42,284			$	58,123
			12,086				29,934				42,284				58,123
EXPENSES:
Voyage expenses			2,366				5,767				6,364				12,396
Vessel operating expenses			9,041				17,141				36,554				40,375
Depreciation			872				5,530				2,595				8,632
Vessels impairment, loss on sales and other			(4,109	)			-				41,836				300
General and administrative expenses			7,352				7,843				25,375				23,638
Other, net			279				241				(482	)			681
Operating loss			(3,715	)			(6,588	)			(69,958	)			(27,899	)
OTHER INCOME / (EXPENSES):
Interest and finance costs, net of interest income			(1,705	)			(3,604	)			(7,051	)			(8,313	)
Loss on private placement			-				(7,600	)			-				(7,600	)
Other, net			173				(190	)			(2,707	)			(521	)
Total other expenses, net			(1,532	)			(11,394	)			(9,758	)			(16,434	)
Net loss			(5,247	)			(17,982	)			(79,716	)			(44,333	)
Equity in losses of Ocean Rig			-				-				(41,454	)			-
Net loss attributable to DryShips Inc.		$	(5,247	)		$	(17,982	)		$	(121,170	)		$	(44,333	)
Net loss attributable to DryShips Inc. common stockholders			(5,795	)			(15,177	)			(121,774	)			(41,528	)
Loss per common share, basic and diluted (1)		$	(60,364.58	)		$	(0.42	)		$	(1,739,628.57	)		$	(3.36	)
Weighted average number of shares, basic and diluted (1)			96				36,186,606				70				12,356,150

(1) Share and per share data for 2016 give effect to a cumulative 1-for-7,840 reverse stock split between January 23, 2017 and July 21, 2017.

DryShips Inc.
Unaudited Condensed Consolidated Balance Sheets
(Expressed in Thousands of U.S. Dollars)			December 31, 2016			September 30, 2017
ASSETS
	Cash, cash equivalents, including restricted cash (current and non-current)		$	76,774		$	52,676
	Other current and non-current assets			21,406			80,227
	Advances for vessels under construction			-			47,758
	Vessels, net			95,550			682,223
	Total assets			193,730			862,884
LIABILITIES AND STOCKHOLDERS' EQUITY
	Total debt			133,428			240,630
	Total other liabilities			10,528			14,785
	Total stockholders' equity			49,774			607,469
	Total liabilities and stockholders' equity		$	193,730		$	862,884

Adjusted EBITDA Reconciliation

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, vessel and investment impairments and certain other non-cash items as described below and gains or losses on interest rate swaps. Adjusted 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 the Company's calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company measures its operations. Adjusted EBITDA is also used by the Company's lenders as a credit metric and the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.

The following table reconciles net loss to Adjusted EBITDA:
(Dollars in thousands)		Three Months Ended September 30, 2016				Three Months Ended September 30, 2017				Nine Months Ended September 30, 2016				Nine Months Ended September 30, 2017
Net loss attributable to DryShips Inc.		$	(5,247	)		$	(17,982	)		$	(121,170	)		$	(44,333	)
Add: Net interest expense			1,705				3,604				7,051				8,313
Add: Depreciation			872				5,530				2,595				8,632
Add: Dry-dockings and class survey costs			14				-				181				-
Add: Impairments losses on sales and other			(4,109	)			-				41,836				300
Add: Loss on private placement			-				7,600				-				7,600
Add: Income taxes			2				61				21				81
Add: Gain on interest rate swaps			(1,112	)			-				(403	)			-
Add: Equity in losses of affiliate			-				-				41,454				-
Adjusted EBITDA		$	(7,875	)		$	(1,187	)		$	(28,435	)		$	(19,407	)

About DryShips Inc.

The Company is a diversified owner of ocean going cargo vessels that operate worldwide. The Company owns a fleet of 36 vessels comprising of (i) 13 Panamax drybulk vessels; (ii) 4 Newcastlemax drybulk vessels; (iii) 5 Kamsarmax drybulk vessels; (iv) 1 Very Large Crude Carrier; (v) 2 Aframax tankers; (vi) 1 Suezmax tanker; (vii) 4 Very Large Gas Carriers, 1 of which is expected to be delivered in January 2018; and (viii) 6 offshore support vessels, including 2 platform supply and 4 oil spill recovery vessels.

DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."

Visit the Company's website at www.dryships.com

Forward-Looking Statement

Matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. 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 such safe harbor legislation.

Forward-looking statements reflect the Company's current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's 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.

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 factors related to the strength of world economies and currencies, general market conditions, including changes in charter rates, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company's inability to procure acquisition financing, default by one or more charterers of the Company's ships, changes in demand for drybulk or LPG commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company's voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Company's relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F, as amended.