ATHENS, Greece, Feb. 20, 2008 (PRIME NEWSWIRE) -- Paragon Shipping Inc. (Nasdaq:PRGN), a global shipping transportation company specializing in dry bulk cargoes, announced today its results for the three months and year ended December 31, 2007. The Company's results reflect the impact of its successfully completed public offering of 10,997,539 common shares (including the underwriters' partial exercise of their over allotment option), as previously announced.
For the three months ended December 31, 2007, the Company reported net income of $7.7 million and earnings per share basic and diluted were $0.31 and $0.29, compared to net income of $0.5 million and $0.14 earnings per share basic and diluted, for the three months ended December 31, 2006.
For the full year 2007, the Company reported net income of $4.9 million and earnings per share basic and diluted were $0.12 and $0.11, compared to 2006 net income of $0.5 million and $0.14 earnings per share basic and diluted.
The Company's results for the three months and year ended December 31, 2007 include non-cash expenses of $0.3 million, or ($0.01) per basic and diluted share, and $20.2 million, or ($1.23) per basic and ($1.16) per diluted share, respectively. The non-cash expenses were related to the non-cash compensation expense resulting from the conversion of the Company's outstanding Class B common shares into Class A common shares at the time of the Company's public offering and to the amortization up to December 31, 2007, of the compensation cost recognized for the 569,500 options and a total of 105,500 restricted common shares to executive officers, directors and employees.
Other non-cash items include below market time charters attached to vessels acquired which are amortized over the remaining period of the time charter as an increase to time charter revenue, and unrealized loss from interest rate swaps. These other non-cash items contributed an aggregate of $5.1 million to net income, or $0.20 to earnings per share basic and $0.19 to earnings per share diluted for the three months ended December 31, 2007. For the year ended December 31, 2007, these items contributed $7.2 million to net income, or $0.43 and $0.41 per share, to the earnings per share basic and diluted, respectively.
Fourth Quarter 2007 Financial Results:
Time charter revenue for the fourth quarter of 2007 was $30.4 million compared to $4.9 million in the fourth quarter in 2006. The Company reported net income of $7.7 million, or $0.31 and $0.29 per basic and diluted share in the fourth quarter of 2007, calculated on 25,334,026 weighted average number of shares, basic and on 26,330,136 weighted average number of shares, diluted outstanding for the period and reflecting the impact of the non-cash items discussed above. In the fourth quarter of 2006 net income was $0.5 million, or $0.14 per basic and diluted share, calculated on 1,441,887 and 1,442,639 weighted average number of shares basic and diluted, respectively.
EBITDA was $18.0 million for the 2007 fourth quarter compared to $2.1 million for the fourth quarter in 2006. This was calculated by adding to net income of $7.7 million for the three months period ended December 31, 2007, net interest expense and depreciation that in the aggregate amounted to $10.3 million for the three months period ended December 31, 2007. Please see table at the back of this release for a reconciliation of net income to EBITDA.
The Company operated an average of 9.68 vessels during the fourth quarter of 2007, earning an average time charter equivalent rate of $35,284 per day compared to an average of 2.01 vessels during the fourth quarter of 2006, earning an average time charter equivalent rate of $25,460 per day. Total adjusted operating expenses in the fourth quarter of 2007 were $8.6 million, or approximately $9,670 per day, including vessel operating expenses and general and administrative expenses, but excluding $0.3 million of share-based compensation. In the fourth quarter of 2006, total adjusted operating expenses were $0.9 million, or approximately $4,663 per day, including vessel operating expenses and general and administrative expenses, but excluding $1.5 million of share-based compensation.
Dividend Declared
Based on the financial results for the fourth quarter of 2007, on February 12, 2008 the Board of Directors of the Company declared a quarterly dividend of $0.4375 per share, payable on February 28, 2008 to shareholders of record as of February 19, 2008. Dividends declared based on 2007 results amounted to $2.35 per share, which includes a special dividend of $0.60 per share prior to the completion of the Company's initial public offering on August 15, 2007.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, "We are pleased to announce to our shareholders another quarter of strong operational and financial results. During the quarter, our markets remained robust and we continued to execute on our strategic plan, further expanding our fleet through the delivery of two 2006-built Panamax drybulk carriers, and bringing our fleet total to 11 vessels with an aggregate capacity of 706,358 dwt. We also executed on our strategic chartering program. We have now locked in 93% of our voyage revenue days for 2008 and look forward with confidence to a strong year. In addition we fulfilled our commitment to our shareholders, declaring our fourth consecutive quarterly dividend of $0.4375 per share."
Mr. Bodouroglou concluded, "Looking forward, we believe Paragon is well positioned to take advantage of a strong drybulk market, with secular market growth drivers and little exposure to the U.S. economy. The medium-to-longer term drivers of our industry remained unchanged, and during the coming months we will be in a position to take advantage of the high demand levels we've been seeing in the market as we seek to establish new time chartering contracts for some of our assets. Our present liquidity position and strong balance sheet, in addition to our locked-in revenue for 2008, will allow us to expand our fleet further while maintaining our commitment to enhancing shareholder value."
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping has chartered its vessels for periods ranging from 1 to 3 years. As a result, the Company has currently fixed 93% and 50% of its available fleet days in 2008 and 2009, respectively. This represents expected contracted revenue from these charter agreements of 2007, $127.5 million and $70.0 million for 2008 and 2009, respectively. Although these charter payments are based on contractual charter rates, the contracts are subject to performance, and reflect an estimate of off-hire days for periodic or scheduled maintenance.
Recent Fleet Developments
During the fourth quarter of 2007, the Company took delivery of two vessels it contracted to acquire with borrowings under its credit facilities. With the addition of these vessels, the Company's fleet now consists of seven Panamax drybulk carriers, three Handymax drybulk carriers and one Supramax drybulk carrier, with an aggregate capacity of approximately 706,358 dwt.
The Company took delivery on November 21, 2007 of the Coral Seas, a 74,477 dwt 2006-built Panamax vessel. The Coral Seas has been chartered to Bunge S.A. pursuant to a time charter with a period of approximately 23 to 25 months at the charterer's option, at a rate of $54,000 per day, which commenced immediately upon the delivery of the vessel to the Company.
The Company also took delivery of the Golden Seas, a 74,475 dwt 2006-built Panamax vessel, on December 10, 2007. The Golden Seas has been chartered to Bunge S.A. pursuant to a time charter with a period of approximately 11 to 13 months at the charterer's option, at the rate of $64,000 per day, which commenced immediately upon delivery of the vessel.
Cash Flows
For the year ended December 31, 2007, the Company generated net cash from operating activities of $42.8 million compared to $1.6 million in the period from inception (April 26, 2006) to December 31, 2006. For the year ended December 31, 2007 net cash used in investing activities was $426.5 million and cash from financing activities was $382.7 million. For the period from inception (April 26, 2006) to December 31, 2006 net cash used in investing activities was $155.4 million and cash from financing activities was $186.1 million.
Year ended December 31, 2007 Financial Results:
Time charter revenue for the year ended December 31, 2007 was $76.7 million compared to $4.9 million in the period from inception (April 26, 2006) to December 31, 2006. The Company reported in 2007 net income of $4.9 million, or $0.12 earnings per share, basic and $0.11 earnings per share, diluted calculated on 16,495,980 weighted average number of shares, basic and 17,438,463 weighted average number of shares, diluted outstanding for the year and reflecting the impact of the non-cash expenses and other non-cash items amounting in aggregate to $13.0 million, discussed above. In 2006 net income was $0.5 million, or $0.14 per basic and diluted share, calculated on 1,441,887 and 1,442,639 weighted average number of shares basic and diluted, respectively.
EBITDA was $31.4 million for the year ended December 31, 2007 compared to $2.1 million for the period from inception (April 26, 2006) to December 31, 2006. This was calculated by adding to net income of $4.9 million for the year ended December 31, 2007, net interest expense and depreciation that in aggregate amounted to $26.5 million for the year ended December 31, 2007. Please see table at the back of this release for a reconciliation of net income to EBITDA.
The Company operated an average of 7.18 vessels during 2007, earning an average time charter equivalent rate of $28,563 per day compared to an average of 0.74 vessels during the period from inception (April 26, 2006) to December 31, 2006, earning an average time charter equivalent rate of $25,460 per day. Total adjusted operating expenses for 2007 were $18.3 million, or approximately $6,969 per day, including vessel operating expenses and general and administrative expenses, but excluding $20.2 million of share-based compensation. In 2006, total adjusted operating expenses were $0.9 million, or approximately $4,663 per day, including vessel operating expenses and general and administrative expenses, but excluding $1.5 million of share-based compensation.
Conference Call and Webcast:
The Company's management will host a conference call to discuss the results on Thursday, February 21, 2008 at 9:00 a.m. Eastern Time.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: + 1 866 288 9315 (from the U.S.), + 44 (0) 800 3769 250 (from the UK), or + 30 211 180 2000 (all other callers). The access code for the call is "909".
A telephonic replay of the conference call will be available for 90 days by dialing + 1 866 288 9317 (from the U.S.), + 44 (0) 800 901 2906 (from the UK) or + 30 210 94 60 929 (all other callers). The access code for the replay is "909#".
Slides and audio webcast:
There will also be a live webcast of the conference call and accompanying slide presentation on the Paragon Shipping Inc. website (www.paragonship.com). Please allow 15 minutes prior to the call to visit the site and download and install any necessary audio software. The webcast will be archived on this site for one year.
About Paragon Shipping Inc.
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation of drybulk cargoes. The Company's current fleet consists of eleven vessels with a total carrying capacity of 706,358 dwt. For further information, please visit the Company's website at www.paragonship.com.
Cautionary Statement Regarding Forward-Looking Statement
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," "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.
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 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 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 factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Updated Fleet List:
The following table represents our fleet as of February 20, 2008.
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Name Type Dwt Year Built
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Panamax
-------
---------------------------------------------------------------------
Deep Seas Panamax 72,891 1999
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Calm Seas Panamax 74,047 1999
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Kind Seas Panamax 72,493 1999
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Pearl Seas Panamax 74,483 2006
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Diamond Seas Panamax 74,274 2001
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Coral Seas Panamax 74,477 2006
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Golden Seas Panamax 74,475 2006
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Total Panamax 7 517,140
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Handymax
--------
---------------------------------------------------------------------
Blue Seas Handymax 45,654 1995
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Clean Seas Handymax 46,640 1995
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Crystal Seas Handymax 43,222 1995
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Total Handymax 3 135,516
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Supramax
--------
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Sapphire Seas Supramax 53,702 2005
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Total Supramax 1 53,702
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Grand Total 11 706,358
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Summary Fleet Data:
---------------------------------------------------------------------
Fourth Quarter Ended Fourth Quarter Ended
December 31, 2006 December 31, 2007
---------------------------------------------------------------------
FLEET DATA
---------------------------------------------------------------------
Average number of vessels(1) 2.01 9.68
---------------------------------------------------------------------
Available days for fleet(2) 185 819
---------------------------------------------------------------------
Calendar days for fleet(3) 185 891
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Fleet utilization(4) 100% 92%
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AVERAGE DAILY RESULTS
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Time charter equivalent(5) 25,460 35,284
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Vessel operating expenses(6) 3,026 5,637
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General and administrative
expenses(7) Adjusted 1,637 4,033
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Total vessel operating
expenses(8) Adjusted 4,663 9,670
---------------------------------------------------------------------
---------------------------------------------------------------------
Period From Inception Year Ended
(April 26, 2006) to December 31, 2007
December 31, 2006
---------------------------------------------------------------------
FLEET DATA
---------------------------------------------------------------------
Average number of vessels(1) 0.74 7.18
---------------------------------------------------------------------
Available days for fleet(2) 185 2,550
---------------------------------------------------------------------
Calendar days for fleet(3) 185 2,622
---------------------------------------------------------------------
Fleet utilization(4) 100% 97%
---------------------------------------------------------------------
---------------------------------------------------------------------
AVERAGE DAILY RESULTS
---------------------------------------------------------------------
Time charter equivalent(5) 25,460 28,563
---------------------------------------------------------------------
Vessel operating expenses(6) 3,026 4,376
---------------------------------------------------------------------
General and administrative
expenses(7) Adjusted 1,637 2,593
---------------------------------------------------------------------
Total vessel operating
expenses(8) Adjusted 4,663 6,969
---------------------------------------------------------------------
(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 calendar days each fleet was a part of our
fleet during the period divided by the number of calendar days in
the period.
(2) Available days for the fleet are the total calendar days the
vessels were in our possession for the relevant period after
subtracting for off hire days with major repairs, drydocks or
special or intermediate surveys.
(3) Calendar days are the total days we possessed the vessels in our
fleet for the relevant period including off hire days associated
with major repairs, drydockings or special or intermediate
surveys.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating available days and is determined
by dividing available 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. Our method
of calculating TCE is consistent with industry standards and is
determined by dividing revenue generated from charters net of
voyage expenses by available days for the relevant time period.
Voyage expenses primarily consist of port, canal and fuel costs
that are unique to a particular voyage, as well as commissions.
TCE 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 voyage charters, time charters and bareboat charters)
under which the vessels may be employed between the periods.
(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 for the relevant time period.
(7) Daily general and administrative expenses is calculated by
dividing general and administrative expense by fleet calendar
days for the relevant time period. Non-cash expenses relating to
the conversion of the Company's Class B common shares into
Class A common shares and to the amortization of the share based
compensation cost for options and restricted shares have been
excluded.
(8) Total vessel operating expenses, or TVOE, is a measurement of our
total expenses associated with operating our vessels. TVOE is the
sum of vessel operating expenses and general and administrative
expenses. Daily TVOE is calculated by dividing TVOE by fleet
calendar days for the relevant time period. Non-cash expenses
relating to the conversion of the Company's Class B common shares
into Class A common shares and to the amortization of the share
based compensation cost for options and restricted shares have
been excluded.
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
---------------------------------------------------------------------
Fourth Quarter Ended Fourth Quarter Ended
December 31, 2006 December 31, 2007
---------------------------------------------------------------------
Time Charter Revenues 4,949,426 30,380,104
---------------------------------------------------------------------
Less Voyage Expenses 18,970 224,829
---------------------------------------------------------------------
Less Commission 220,266 1,257,484
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses 4,710,190 28,897,791
---------------------------------------------------------------------
Total available days 185 819
---------------------------------------------------------------------
Time Charter Equivalent 25,460 35,284
---------------------------------------------------------------------
---------------------------------------------------------------------
Period From Inception Year Ended
(April 26, 2006) December 31, 2007
to December 31, 2006
---------------------------------------------------------------------
Time Charter Revenues 4,949,426 76,657,595
---------------------------------------------------------------------
Less Voyage Expenses 18,970 348,452
---------------------------------------------------------------------
Less Commission 220,266 3,472,468
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses 4,710,190 72,836,675
---------------------------------------------------------------------
Total available days 185 2,550
---------------------------------------------------------------------
Time Charter Equivalent 25,460 28,563
---------------------------------------------------------------------
PARAGON SHIPPING INC.
Condensed Statement of Cash Flows
(Expressed in United States Dollars)
---------------------------------------------------------------------
Period From Inception Year Ended
(April 26, 2006) to December 31, 2007
December 31, 2006
---------------------------------------------------------------------
Cash and cash equivalents,
beginning of year 0 32,331,848
---------------------------------------------------------------------
Provided by (used in):
---------------------------------------------------------------------
Operating Activities 1,621,892 42,769,314
---------------------------------------------------------------------
Investing Activities (155,355,447) (426,493,679)
---------------------------------------------------------------------
Financing Activities 186,065,403 382,721,154
---------------------------------------------------------------------
Net increase (decrease) in
cash and cash equivalents 32,331,848 (1,003,211)
---------------------------------------------------------------------
Cash and cash equivalents,
end of period 32,331,848 31,328,637
---------------------------------------------------------------------
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
---------------------------------------------------------------------
Fourth Quarter Ended Fourth Quarter Ended
December 31, 2006 December 31, 2007
---------------------------------------------------------------------
Net Income 464,631 7,749,512
---------------------------------------------------------------------
Plus Net Interest expense 547,389 3,623,723
---------------------------------------------------------------------
Plus Depreciation 1,066,527 6,593,579
---------------------------------------------------------------------
Plus Amortization -- --
---------------------------------------------------------------------
EBITDA 2,078,547 17,966,814
---------------------------------------------------------------------
---------------------------------------------------------------------
Period From Inception Year Ended
(April 26, 2006) to December 31, 2007
December 31, 2006
---------------------------------------------------------------------
Net Income 461,764 4,903,736
---------------------------------------------------------------------
Plus Net Interest expense 547,389 9,331,667
---------------------------------------------------------------------
Plus Depreciation 1,066,527 17,204,304
---------------------------------------------------------------------
Plus Amortization -- --
---------------------------------------------------------------------
EBITDA 2,075,680 31,439,707
---------------------------------------------------------------------
(1) Paragon Shipping Inc. considers EBITDA to represent net income
plus net interest expense and depreciation and amortization. The
Company's management uses EBITDA as a performance measure. The
Company believes that EBITDA is useful to investors, because the
shipping industry is capital intensive and may involve
significant financing costs. EBITDA is not an item recognized by
GAAP and should not be considered as an alternative to net
income, operating income or any other indicator of a Company's
operating performance required by GAAP. The Company's definition
of EBITDA may not be the same as that used by other companies in
the shipping or other industries.
Paragon Shipping Inc.
Unaudited Consolidated Balance Sheets
As of December 31, 2006 and December 31, 2007
(Expressed in United States Dollars)
----------------------------------------------------------------------
December 31, December 31,
2006 2007
Assets
Current assets
Cash and cash equivalents 32,331,848 31,328,637
Trade receivables -- 354,154
Other receivables 876,537 287,546
Prepaid expenses -- 654,576
Inventories 201,659 801,373
----------------------------------------------------------------------
Total current assets 33,410,044 33,426,286
----------------------------------------------------------------------
Fixed assets
Office equipment, net of accumulated
depreciation 2,767 --
Advances for vessel acquisitions 2,963,391 --
Vessels at cost 152,554,289 633,378,703
Less: accumulated depreciation (1,066,527) (18,268,064)
----------------------------------------------------------------------
Total fixed assets 154,453,920 615,110,639
----------------------------------------------------------------------
Other assets 375,895 1,584,950
Restricted cash -- 8,010,000
Other long term receivables 1,340,602
----------------------------------------------------------------------
Total Assets 188,239,859 659,472,477
----------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable 650,064 2,487,291
Accrued expenses 1,099,918 5,494,431
Due to management company 1,741,872 1,642,805
Interest rate swap 117,965 --
Below market acquired time charters 123,750 --
Deferred income 516,056 3,176,938
Current portion of long-term debt -- 9,000,000
----------------------------------------------------------------------
Total current liabilities 4,249,625 21,801,465
----------------------------------------------------------------------
Long-term debt 77,437,500 309,000,000
Obligations for warrants 10,266,969 --
Other long-term payable -- 586,499
Interest rate swap -- 1,370,701
Below market acquired time charters -- 51,077,602
----------------------------------------------------------------------
Total long-term liabilities 87,704,469 362,034,802
----------------------------------------------------------------------
Total Liabilities 91,954,094 383,836,267
----------------------------------------------------------------------
Commitments and Contingencies
Shareholders' equity:
Preferred shares: $0.001 par value,
25,000,000 authorized, none issued, none
outstanding at December 31, 2006 and
December 31, 2007
Class A Common Shares, $0.001 par value;
120,000,000 authorized 11,497,656 issued
and outstanding at December 31, 2006
and 25,744,983 issued and outstanding
at December 31, 2007 11,498 25,745
Class B Common shares, $0.001 par value;
5,000,000 authorized, 2,003,288 issued and
outstanding at December 31, 2006 and none
issued and outstanding at December 31, 2007 2,003 --
Additional paid-in capital 98,738,185 304,408,972
Accumulated deficit (2,465,921) (28,798,507)
----------------------------------------------------------------------
Total shareholders' equity 96,285,765 275,636,210
----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity 188,239,859 659,472,477
----------------------------------------------------------------------
Paragon Shipping Inc.
Unaudited Consolidated Statement of Operations
For the three months period ended December 31, 2006 and December 31,
2007
(Expressed in United States Dollars)
---------------------------------------------------------------------
Three Months Three Months
Ended Ended
December 31, December 31,
2006 2007
Revenue
Time charter revenue 4,949,426 30,380,104
Less: commissions 220,266 1,257,484
---------------------------------------------------------------------
Net Revenue 4,729,160 29,122,620
---------------------------------------------------------------------
Expenses
Voyage expenses 18,970 224,829
Vessels operating expenses 559,855 5,022,440
Management fees charged by a related party 170,750 895,975
Depreciation 1,066,527 6,593,579
General and administrative expenses
(including share based compensation of
$1,476,717 for the three months ended
December 31, 2006 and $341,493 for the
three months ended December 31, 2007 1,779,562 3,934,612
---------------------------------------------------------------------
Operating Income 1,133,496 12,451,185
---------------------------------------------------------------------
Other Income (Expenses)
Interest and finance costs (951,798) (4,017,986)
Unrealized loss on interest rate swap (117,965) (1,028,161)
Interest income 404,409 394,263
Foreign currency losses (3,511) (49,789)
---------------------------------------------------------------------
Total Other Expenses, net (668,865) (4,701,673)
---------------------------------------------------------------------
Net Income 464,631 7,749,512
Income allocable to Class B common shares 256,169
---------------------------------------------------------------------
Income available to Class A common shares 208,462 7,749,512
=====================================================================
Earnings per Class A common share, basic $0.14 $0.31
Earnings per Class A common share, diluted $0.14 $0.29
Earnings per Class B common share, basic
and diluted $0.00 --
Weighted average number of Class A Common
Shares, basic 1,441,887 25,334,026
Weighted average number of Class A Common
Shares, diluted 1,442,639 26,330,136
Weighted average number of Class B common
shares, basic and diluted 1,842,381 --
Paragon Shipping Inc.
Unaudited Consolidated Statement of Operations
For the period from inception (April 26, 2006) to December 31, 2006
and for year ended December 31, 2007
(Expressed in United States Dollars)
--------------------------------------------------------------------
Period From
Inception
(April 26,
2006) to Year Ended
December 31, December 31,
2006 2007
Revenue
Time charter revenue 4,949,426 76,657,595
Less: commissions 220,266 3,472,468
--------------------------------------------------------------------
Net Revenue 4,729,160 73,185,127
--------------------------------------------------------------------
Expenses
Voyage expenses 18,970 348,452
Vessels operating expenses 559,855 11,474,480
Management fees charged by a related
party 170,750 2,076,678
Depreciation 1,066,527 17,204,304
General and administrative expenses
(including share based compensation of
$1,476,717 for the period from
inception (April 26, 2006) to December
31, 2006 and $20,212,149 for the year
ended December 31, 2007 1,782,429 27,010,327
--------------------------------------------------------------------
Operating Income 1,130,629 15,070,886
--------------------------------------------------------------------
Other Income (Expenses)
Interest and finance costs (951,798) (10,328,845)
Unrealized loss on interest rate swap (117,965) (1,252,736)
Interest income 404,409 997,178
Gain from the change in fair value of
warrants -- 493,962
Foreign currency losses (3,511) (76,709)
--------------------------------------------------------------------
Total Other Expenses, net (668,865) (10,167,150)
--------------------------------------------------------------------
Net Income 461,764 4,903,736
Income allocable to Class B common
shares 259,036 2,954,848
--------------------------------------------------------------------
Income available to Class A common
shares 202,728 1,948,888
====================================================================
Earnings per Class A common share, basic $0.14 $0.12
Earnings per Class A common share, diluted $0.14 $0.11
Earnings per Class B common share, basic
and diluted $0.00 --
Weighted average number of Class A Common
Shares, basic 1,441,887 16,495,980
Weighted average number of Class A Common
Shares, diluted 1,442,639 17,438,463
Weighted average number of Class B common
shares, basic and diluted 1,842,381 --
Paragon Shipping Inc.
Unaudited Consolidated Statement of Shareholders' Equity
For the year ended December 31, 2007
(Expressed in United States Dollars)
---------------------------------------------------------------------
Class A Shares Class B Shares
-------------- --------------
Number of Par Number Par
Shares Value of Shares Value
---------------------------------------------------------------------
Balance, January 1, 2007 11,497,656 11,498 2,003,288 2,003
Issuance of Class A Common
Shares, net of issuance
costs (unaudited) 11,497,539 11,498
Issuance of Class A Common
Shares, from the exercise
of warrants 660,000 660
Conversion of Class B
Common Shares into Class
A Common Shares 2,003,288 2,003 (2,003,288) (2,003)
Share based compensation
Issuance of restricted
Class A Common Shares 86,500 86
Obligation for warrants
Dividends paid
Net Income
---------------------------------------------------------------------
Balance, December 31, 2007 25,744,983 25,745 -- --
---------------------------------------------------------------------
Additional
Paid-in Accumulated
Capital deficit Total
---------------------------------------------------------------------
Balance, January 1, 2007 98,738,185 (2,465,921) 96,285,765
Issuance of Class A Common
Shares, net of issuance
costs (unaudited) 169,086,377 169,097,875
Issuance of Class A Common
Shares, from the exercise of
warrants 6,599,340 6,600,000
Conversion of Class B Common
Shares into Class A Common
Shares --
Share based compensation 20,212,149 20,212,149
Issuance of restricted Class A
Common Shares (86) --
Obligation for warrants 9,773,007 9,773,007
Dividends paid (31,236,322) (31,236,322)
Net Income 4,903,736 4,903,736
---------------------------------------------------------------------
Balance, December 31, 2007 304,408,972 (28,798,507) 275,636,210
---------------------------------------------------------------------
Paragon Shipping Inc.
Unaudited Consolidated Statement of Cash Flows
For the period from inception (April 26, 2006) to December 31, 2006
and for the year ended December 31, 2007
(Expressed in United States Dollars)
---------------------------------------------------------------------
Period From Year Ended
Inception December 31,
(April 26, 2006) 2006
to December 31,
2007
Cash Flows from Operating Activities
Net Income 461,764 4,903,736
Adjustments to reconcile net income to
net cash provided by operating
activities
Depreciation 1,066,527 17,204,304
Amortization of below market acquired
time charters (41,250) (8,423,492)
Amortization of financing costs 3,292 1,097,976
Share based compensation 1,476,717 20,212,149
Unrealized loss on interest rate swap 117,965 1,252,736
Gain from the change in fair value of
warrants -- (493,962)
Changes in assets and liabilities
Increase in trade receivables -- (354,154)
(Increase)/decrease in other
receivables (51,537) 588,991
Increase in prepaid expenses -- (654,576)
Increase in inventories (201,659) (599,714)
Increase in other assets (2,051) (4,132)
Increase in other long term
receivables -- (1,340,602)
(Decrease)/increase in trade accounts
payable (166,801) 1,837,227
Increase in accrued expenses 116,954 4,394,513
Decrease in due to management company (1,674,085) (99,067)
Increase in deferred income 516,056 2,660,882
Increase in other long-term payable -- 586,499
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Net cash from operating activities 1,621,892 42,769,314
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Cash flows from investing activities
Purchase of office equipment (2,767) --
Acquisition of vessels and capital
expenditures (152,389,289) (418,483,679)
Restricted cash (8,010,000)
Advances for vessel acquisition (2,963,391) --
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Net cash used in investing activities (155,355,447) (426,493,679)
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Cash flows from financing activities
Proceeds from long-term debt 125,937,500 348,812,500
Proceeds from short-term debt -- 289,336,091
Repayment of long-term debt (48,500,000) (108,250,000)
Repayment of short-term debt -- (289,336,091)
Payment of financing costs (377,136) (2,302,898)
Contribution of capital to Elegance and
Icon 21,694,942 --
Return of capital to shareholders of
Elegance and Icon (21,694,942) --
Proceeds from the issuance of units 113,120,186 --
Proceeds from the issuance of Class B
common shares 10,000 --
Proceeds from the issuance of Class A
common shares -- 181,960,710
Proceeds from the exercise of warrants -- 6,600,000
Class A common share offering costs (4,125,147) (12,862,836)
Dividends paid -- (31,236,322)
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Net cash from financing activities 186,065,403 382,721,154
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Net increase/(decrease) in cash and
cash equivalents 32,331,848 (1,003,211)
Cash and cash equivalents at the
beginning of the period -- 32,331,848
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Cash and cash equivalents at the end of
the period 32,331,848 31,328,637
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Supplemental disclosure of cash flow
information
Cash paid during the period for interest -- 7,470,805
Supplemental disclosure of non-cash
investing and financing activities
Commissions due for the acquisition of
the vessels 825,000 --
Commissions due to management company 825,000 --
Accrued offering costs 982,964 --
Offering costs payable 480,137 --
Deemed dividend 2,927,685 --