-- Net income of $3.9 million or $0.13 per share basic and diluted on
total net revenues of $15.3 million. Excluding the effect of unrealized
gain on derivatives, unrealized loss on trading securities, amortization of
the fair value of charters acquired and loss on vessel sales the net income
for the period would have been $2.0 million, or $0.07 per share.
-- Adjusted EBITDA was $6.2 million. Please refer to a subsequent section
of the Press Release for a reconciliation of adjusted EBITDA to net income.
-- An average of 15.7 vessels were owned and operated during the first
quarter of 2009 earning an average time charter equivalent rate of $12,684
per day.
-- Declared a quarterly dividend of $0.10 per share for the first quarter
of 2009 payable on June 17, 2009 to shareholders of record on June 5, 2009.
This is the fifteenth consecutive quarterly dividend declared.
Aristides Pittas, Chairman and CEO of Euroseas, commented: "The first
quarter of 2009 continued to be challenging on the chartering front,
especially for our containership vessels; however, it was also a period
during which attractive opportunities for investment started emerging. As
announced already, we have partly renewed our drybulk fleet by purchasing
two drybulk vessels of approximately 11-12 years old and selling two of our
25-year old drybulk vessels. We continue pursuing further investment
opportunities given our strong cash position at the end of the quarter.
With a low overall leverage -- we have more cash than debt outstanding --
we have been able to secure conventional bank financing to partly finance
our investment program.
"Despite the recent upturn in the drybulk market, we expect to face a
volatile and generally depressed market environment over the next two
years. We have covered practically 100% of our drybulk fleet for 2009 and
80% for 2010 via either time charter contracts or Freight Forward Agreement
('FFA') contracts. Our containerships are facing significant challenges in
securing employment contracts after the expiration of their present
charters and it has proven economical to temporarily lay-up three of our
vessels rather than employ them at unprofitable low levels.
"In contrast to many other shipping companies, our Board confirmed its
intention to continue paying healthy dividends to our shareholders
throughout the market cycles in parallel with our expansion program, as far
as practically possible. In that respect we have maintained our quarterly
dividend at $0.10 per share which represents a yield of about 7.1% on the
basis of our stock price on May 7, 2009."
Tasos Aslidis, Chief Financial Officer of Euroseas, commented: "The results
of the first quarter of 2009 reflect the lower level of the charter
markets. Our results were positively influenced by other non-cash gains on
interest rate derivatives and FFAs.
"Total daily vessel operating expenses, including management fees and
general and administration expenses, during the first quarter of 2009
reflect a decrease of about 6.0% on a per vessel per day basis compared to
the first quarter of 2008, which partly reflects that two of our vessels
were laid-up during the first quarter of 2009 (one for the entire quarter
and another for part of March 2009) and, thus, incurred significantly lower
daily costs. We believe that we continue to maintain one of the lowest
operating cost structures amongst the public shipping companies which, we
believe, is one of our competitive advantages. It is worth noting that
during the first quarter of 2009, we continued achieving decreases in our
daily operating costs for the third quarter in a row. Needless to say that
we will continue to focus on controlling and reducing our costs while
ensuring safe operations.
"As of March 31, 2009, our outstanding debt is about $62.8 million versus
restricted and unrestricted cash of about $64.9 million. In April 2009, we
drew an additional loan of $10 million to partly finance our latest
acquisition, M/V Eleni P. Our scheduled debt repayments over the next 12
months -- including the new debt -- amount to about $13.0 million, a number
low enough to provide us with operational cash flow comfort. We estimate
that our cash flow breakeven for the next 12 months is between $9,500 and
$10,000 per vessel per day excluding dividend payments but inclusive of
debt repayments."
First Quarter 2009 Results:
For the first quarter of 2009, the Company reported total net revenues of
$15.3 million representing a 53.4% decrease over total net revenues of
$32.8 million during the first quarter of 2008. The Company reported net
income for the period of $3.9 million as compared to net income of $13.6
million for the first quarter of 2008 representing a 71.1% decline. The
results for the first quarter of 2009 include a $1.7 million unrealized
gain on derivatives and investments as compared to $0.02 million unrealized
gain on investments for the same period of 2008. Depreciation expenses for
the first quarter of 2009 were $4.5 million compared to $7.3 million during
the same period of 2008. The decline was due to a change in estimates (see
below) and the sale of M/V Nikolaos P and M/V Ioanna P, which contributed
$2.0 million to the depreciation expenses in the first quarter of 2008,
partly balanced by the depreciation of three vessels purchased since March
31, 2008. On average, 15.7 vessels were owned and operated during the first
quarter of 2009 earning an average time charter equivalent rate of $12,684
per day compared to 15 vessels in the same period of 2008 earning on
average $25,723 per day. Two of the Company's containerships were laid-up
as of March 31, 2009 and a third one was laid-up in April 2009.
Adjusted EBITDA for the first quarter of 2009 was $6.2 million, a 67.1%
decrease from $18.7 million achieved during the first quarter of 2008.
Please see below for Adjusted EBITDA reconciliation to net income and cash
flow provided by operating activities.
Basic and diluted earnings per share for the first quarter of 2009 was
$0.13, calculated on 30,575,611 and 30,602,510 weighted average number of
shares outstanding, respectively, compared to basic and diluted earnings
per share of $0.45 for the first quarter of 2008, calculated on 30,321,553
and 30,379,994 weighted average number of shares outstanding, respectively.
Excluding the effect on the earnings for the quarter of the unrealized gain
on derivatives, unrealized loss on investments, amortization of the fair
value of time charter contracts acquired and loss from vessel sales, the
earnings per share for the quarter ended March 31, 2009 would have been
$0.07 per share basic and diluted, and, for the quarter ended March 31,
2008 would have been $0.38 per share basic and diluted. Usually, security
analysts do not include the above items in their published estimates of
earnings per share.
Change in accounting principle and change in estimates:
Beginning with the first quarter of 2009, the Company changed its
accounting policy of drydocking costs from the deferral method, under which
the Company amortized drydocking costs over the estimated period of benefit
between dry-dockings, to the direct expense method, under which the Company
expenses all drydocking costs as incurred. The Company believes that the
direct expense method is preferable as it eliminates the significant amount
of time and subjectivity involved in determining which costs and activities
related to drydocking qualify for the deferral method. When the accounting
principle was retrospectively applied, net income for the quarter ended
March 31, 2008 decreased by $1.5 million.
The Company reflected this change as a change in accounting principle from
an accepted accounting principle to a preferable accounting principle in
accordance with Statement of Financial Accounting Standards No. 154,
Accounting Changes and Error Corrections. The new accounting principle will
be applied retrospectively to all periods presented in earnings releases
and filings.
During the fourth quarter of 2008, the Company also changed its estimates
of the scrap price and useful life of its containerships to better reflect
the present market environment, industry practice and intended use. The
effect of these changes increased net income for the period ended March 31,
2009 by $1.6 million.
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
Year
Name Type Dwt TEU Built Employment TCE Rate ($/day)
------------ -------- ------ ----- ---------- ---------------
Dry Bulk
Vessels
------------ -------- ------ ----- ---------- ---------------
TC 'til
ELENI P Panamax 72,119 1997 May-10 $15,350
------------ -------- ------ ----- ---------- ---------------
Baumarine
IRINI (*) Panamax 69,734 1988 Pool
------------ -------- ------ ----- ---------- ---------------
ARISTIDES TC 'til
N.P. Panamax 69,268 1993 Jan-10 $12,350
------------ -------- ------ ----- ---------- ---------------
Bulk-
MONICA P handling
(**) Handymax 46,667 1998 Pool
------------ -------- ------ ----- ---------- ---------------
GREGOS Handysize 38,691 1984 Spot
------------ -------- ------ ----- ---------- ---------------
Total Dry
Bulk
Vessels 5 296,479
------------ -------- ------ ----- ---------- ---------------
Multipurpose
Dry Cargo
Vessels
------------ -------- ------ ----- ---------- ---------------
$9,500 'til
Dec-10,
TC 'til $9,000 'til
TASMAN TRADER 1 22,568 950 1990 Mar-12 Mar-12
------------ -------- ------ ----- ---------- ---------------
Container
Carriers
------------ -------- ------ ----- ---------- ---------------
$16,800 'til
Aug-11
TC 'til $18,735 'til
Aug-11 Aug-12
(3 annual $19,240 'til
options Aug-13
MAERSK 'til $19,750 'til
NOUMEA Intermediate 34,677 2,556 2001 Aug-14) Aug-14
------------ -------- ------ ----- ---------- ---------------
TIGER TC 'til
BRIDGE Intermediate 31,627 2,228 1990 Mar-10 $7,500
------------ -------- ------ ----- ---------- ---------------
ARTEMIS Intermediate 29,693 2,098 1987 Laid-up
------------ -------- ------ ----- ---------- ---------------
DESPINA P Handy size 33,667 1,932 1990 Laid-up
------------ -------- ------ ----- ---------- ---------------
JONATHAN P
(ex-OEL
INTEGRITY) Handy size 33,667 1,932 1990 Laid-up
------------ -------- ------ ----- ---------- ---------------
TC 'til
Oct-09
OEL 'til $12,000
TRANSWORLD Oct-10 $10,000
(ex-CLAN (owner’s (owner's
GLADIATOR) Handy size 30,007 1,742 1992 option) option)
------------ -------- ------ ----- ---------- ---------------
TC 'til
YM XINGANG I Handy size 23,596 1,599 1993 Jul-09 $26,650
------------ -------- ------ ----- ---------- ---------------
TC 'til
MANOLIS P Handy size 20,346 1,452 1995 Oct-09 $15,800
------------ -------- ------ ----- ---------- ---------------
NINOS
(ex-YM TC 'til
QINGDAO I) Feeder 18,253 1,169 1990 Apr-10 $8,060
------------ -------- ------ ----- ---------- ---------------
TC 'til
Dec-09 $4,100 'til
(option Jun-09
'til $3,850 'til
KUO HSIUNG Feeder 18,154 1,169 1993 Jun-10) Jun-10
------------ -------- ------ ----- ---------- ---------------
Total
Container
Carriers 10 273,687 17,877
------------ -------- ------ ----- ---------- ---------------
Fleet Grand
Total 16 592,734 18,827
------------ -------- ------ ----- ---------- ---------------
(*) "IRINI" is employed in the Baumarine spot pool that is managed by
Klaveness, a major global charterer in the dry bulk area.
(**) "Monica P" is employed in the Bulkhandling spot pool that is also
managed by Klaveness.
Summary Fleet Data:
3 months, 3 months,
ended ended
March 31, March 31,
2008 2009
--------- ---------
FLEET DATA
Average number of vessels (1) 15.00 15.70
Calendar days for fleet (2) 1365.0 1413.0
Scheduled off-hire days incl. laid-up (3) 63.0 106.0
Available days for fleet (3) 1302.0 1307.0
Commercial off-hire days (4) 7.7 84.2
Operational off-hire days (5) 1.5 13.1
Voyage days for fleet (6) 1292.8 1209.7
Fleet utilization (7) 99.3% 92.6%
Fleet utilization, commercial (8) 99.4% 93.6%
Fleet utilization, operational (9) 99.9% 98.9%
AVERAGE DAILY RESULTS
Time charter equivalent rate (10) 25,723 12,684
Vessel operating expenses (11) 5,584 5,198
General and administrative expenses (12) 763 773
Total vessel operating expenses (13) 6,347 5,971
--------- ---------
(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 vessel was a part of our fleet during the period divided
by the number of calendar days in that period.
(2) Calendar days. We define calendar days as the total number of days in a
period during which each vessel in our fleet was in our possession
including off-hire days associated with major repairs, drydockings or
special or intermediate surveys or days of vessels in lay-up. Calendar days
are an indicator of the size of our fleet over a period and affect both the
amount of revenues and the amount of expenses that we record during that
period.
(3) Available days. We define available days as the total number of days in
a period during which each vessel in our fleet was in our possession net of
scheduled off-hire days including days of vessels laid-up; the scheduled
off-hire days including laid-up are days associated with scheduled repairs,
drydockings or special or intermediate surveys or days of vessels in
lay-up. The shipping industry uses available days to measure the number of
days in a period during which vessels were available to generate revenues.
(4) Commercial off-hire days. We define commercial off-hire days as days
waiting to find employment.
(5) Operational off-hire days. We define operational off-hire days as days
associated with unscheduled repairs or other off-hire time related to the
operation of the vessels,
(6) Voyage days. We define voyage days as the total number of days in a
period during which each vessel in our fleet was in our possession net of
commercial and operational off-hire days. The shipping industry uses voyage
days to measure the number of days in a period during which vessels
actually generate revenues.
(7) Fleet utilization. We calculate fleet utilization by dividing the
number of our voyage days during a period by the number of our available
days during that period. The shipping industry uses fleet utilization to
measure a company's efficiency in finding suitable employment for its
vessels and minimizing the amount of days that its vessels are off-hire for
reasons such as unscheduled repairs or days waiting to find employment.
(8) Fleet utilization, commercial. We calculate commercial fleet
utilization by dividing our available days net of commercial off-hire days
during a period by our available days during that period.
(9) Fleet utilization, operational. We calculate operational fleet
utilization by dividing our voyage days during a period by our available
days net of commercial off-hire days during that period.
(10) 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 voyage 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, which would otherwise be paid by the charterer under a time charter
contract, 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.
(11) Daily vessel operating expenses, which includes crew costs,
provisions, deck and engine stores, lubricating oil, insurance, maintenance
and repairs and management fees are calculated by dividing vessel operating
expenses by fleet calendar days for the relevant time period.
(12) Daily general and administrative expense is calculated by dividing
general and administrative expense by fleet calendar days for the relevant
time period.
(13) Total vessel operating expenses, or TVOE, is a measure 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.
Conference Call and Webcast:
Tomorrow, Friday, May 22, 2009 at 11:00 a.m. EDT, the company's management
will host a conference call to discuss the results.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1 866 819 7111 (from the US), 0800 953 0329
(from the UK) or +44 (0)1452 542 301 (international standard dial in).
Please quote "Euroseas."
In case of any problems with the above numbers, please dial 1 866 223 0615
(from the US), 0800 694 1503 (from the UK) or +44 (0)1452 586 513
(international standard dial in). Quote "Euroseas."
A recording of the conference call will be available until May 29, 2009 by
dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44
(0)1452 550 000 (international standard dial in). Access Code: 6973591#
Audio webcast - Slides Presentation:
There will be a live and then archived audio webcast of the conference
call, via the internet through the Euroseas website (www.euroseas.gr).
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast. A slide
presentation on the First Quarter 2009 results in PDF format will also be
available 30 minutes prior to the conference call and webcast accessible on
the company's website (www.euroseas.gr) on the webcast page. Participants
to the webcast can download the PDF presentation.
Euroseas Ltd.
Consolidated Condensed Statements of Income
(All amounts expressed in U.S. Dollars - except share amounts)
Three Three Three
Months Months Months
Ended Ended Ended
March 31, March 31, March 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 34,470,703 34,470,703 15,921,044
Commissions (1,648,768) (1,648,768) (611,878)
Net revenues 32,821,935 32,821,935 15,309,166
Operating expenses
Voyage expenses 1,215,291 1,215,291 577,341
Vessel operating expenses 6,310,840 6,310,840 6,161,466
Drydocking expenses - 2,217,808 -
Amortization and depreciation 7,969,697 7,275,364 4,501,150
Management fees 1,311,180 1,311,180 1,182,756
Other general and administrative
expenses 1,041,249 1,041,249 1,092,133
Charter termination fees - - (103,577)
Net loss from sale of vessels - - 86,533
Total operating expenses 17,848,257 19,371,732 13,497,802
Operating income 14,973,678 13,450,203 1,811,364
Other income/(expenses)
Interest and finance cost (1,022,994) (1,022,994) (323,724)
Change in fair value of derivatives - - 2,063,884
Unrealized gain (loss) on trading
securities 17,042 17,042 (104,575)
Foreign exchange (loss) gain (21,826) (21,826) 29,593
Interest income 1,136,797 1,136,797 468,730
Dividend income 90,151 90,151 -
Other income/(expenses), net 199,170 199,170 2,133,908
----------- ----------- -----------
Net income 15,172,848 13,649,373 3,945,272
----------- ----------- -----------
Earnings, per share, basic 0.50 0.45 0.13
Weighted average number of shares,
basic 30,321,553 30,321,553 30,575,611
----------- ----------- -----------
Earnings, per share, diluted 0.50 0.45 0.13
----------- ----------- -----------
Weighted average number of shares,
diluted 30,379,994 30,379,994 30,602,510
----------- ----------- -----------
Euroseas Ltd.
Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars - except share amounts)
December December March 31,
31, 2008 31, 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
ASSETS
Current Assets:
Cash and cash equivalents 73,851,191 73,851,191 56,264,911
Trade accounts receivable 1,233,895 1,233,895 1,342,160
Other receivables, net 1,439,628 1,439,628 954,955
Due from related company 4,678,750 4,678,750 1,400,694
Inventories 2,011,973 2,011,973 2,128,570
Restricted cash 2,181,264 2,181,264 2,658,647
Vessels held for sale 6,067,020 6,067,020 -
Trading securities 771,727 771,727 667,152
Derivatives 61,670 61,670 877,483
Prepaid expenses 241,102 241,102 360,995
Total current assets 92,538,220 92,538,220 66,655,567
Fixed assets:
Vessels, net 231,963,606 231,963,606 263,951,442
Advances for vessel acquisition 1,821,798 1,821,798 -
Long-term assets:
Restricted cash 4,800,000 4,800,000 5,974,250
Deferred charges, net 7,771,342 373,702 411,647
Derivatives 68,038 68,038 656,960
Fair value of above market time
charter acquired 1,653,422 1,653,422 915,649
Total long-term assets 248,078,206 240,680,567 271,909,948
----------- ----------- -----------
Total assets 340,616,426 333,218,786 338,565,515
----------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt, current portion 12,450,000 12,450,000 12,750,000
Trade accounts payable 2,283,488 2,283,488 2,545,245
Accrued expenses 1,206,466 1,206,466 1,250,421
Accrued dividends 116,750 116,750 140,250
Deferred revenue 4,533,601 4,533,601 3,038,277
Derivatives 827,210 827,210 1,067,188
Total current liabilities 21,417,515 21,417,515 20,791,381
Long-term liabilities:
Long term debt, net of current
portion 43,565,000 43,565,000 50,065,000
Derivatives 2,700,028 2,700,028 2,015,242
Fair value of below market time
charter acquired 8,704,811 8,704,811 7,729,172
Total long-term liabilities 54,969,839 54,969,839 59,809,414
Total liabilities 76,387,354 76,387,354 80,600,795
Shareholders' equity:
Common stock (par value $0.03,
100,000,000 shares authorized,
30,575,611 and 30,575,611 issued and
outstanding)
917,269 917,269 917,269
Preferred shares (par
value $0.01, 20,000,000 shares
authorized, no shares issued and
outstanding)
Additional paid-in capital 234,567,670 234,567,670 234,836,747
Retained earnings 28,744,133 21,346,492 22,210,704
Total shareholders' equity 264,229,072 256,831,432 257,964,720
----------- ----------- -----------
Total liabilities and shareholders'
equity 340,616,426 333,218,786 338,565,515
----------- ----------- -----------
Euroseas Ltd.
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
Three Three Three
Months Months Months
Ended March Ended March Ended March
31, 31, 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
----------- ----------- -----------
Cash flows from operating
activities:
Net income 15,172,848 13,649,373 3,945,272
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation of vessels 7,275,364 7,275,364 4,501,150
Amortization of deferred charges 716,869 22,536 22,056
Amortization of fair value of time
charters (2,111,646) (2,111,646) (237,866)
Loss on sale of vessels - - 86,533
Share-based compensation 367,740 367,740 269,076
Unrealized gain on derivatives - - (1,849,543)
Purchase of trading securities (265,182) (265,182) -
Unrealized (gain) loss on trading
securities (17,042) (17,042) 104,575
Changes in operating assets and
liabilities 1,615,602 3,833,410 (408,888)
----------- ----------- -----------
Net cash provided by operating
activities 22,754,553 22,754,553 6,432,365
----------- ----------- -----------
Cash flows from investing
activities:
Purchase of vessels including
improvements - - (34,667,188)
Change in restricted cash (854,029) (854,029) 985,617
Proceeds from sale of vessels - - 5,980,487
----------- ----------- -----------
Net cash (used in) investing
activities (854,029) (854,029) (27,701,084)
----------- ----------- -----------
Cash flows from financing
activities:
Issuance of share capital 5,000 5,000 -
Net proceeds from shares issued 1,795,004 1,795,004 -
Dividends paid (9,128,334) (9,128,334) (3,057,561)
Offering expenses paid (110,340) (110,340) -
Loan arrangements fees paid - - (60,000)
Proceeds from long-term debt - - 10,000,000
Repayment of long-term debts (5,870,000) (5,870,000) (3,200,000)
----------- ----------- -----------
Net cash provided by (used in)
financing activities (13,308,670) (13,308,670) 3,682,439
----------- ----------- -----------
Net (decrease) increase in cash and
cash equivalents 8,591,854 8,591,854 (17,586,280)
Cash and cash equivalents at
beginning of period 104,135,320 104,135,320 73,851,191
----------- ----------- -----------
Cash and cash equivalents at end of
period 112,727,174 112,727,174 56,264,911
----------- ----------- -----------
Euroseas Ltd.
Reconciliation of Adjusted EBITDA to
Net Income and Cash Flow Provided By Operating Activities
(All amounts expressed in U.S. Dollars)
Three Months Three Months Three Months
Ended Ended Ended
March 31, March 31, March 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
------------ ------------ ------------
Net income 15,172,848 13,649,373 3,945,272
------------ ------------ ------------
Interest and finance costs, net
(incl. interest income) (113,803) (113,803) (145,006)
------------ ------------ ------------
Depreciation and amortization 7,969,697 7,275,364 4,501,150
------------ ------------ ------------
Gain on derivatives - - (1,902,172)
------------ ------------ ------------
Amortization of deferred revenue
of below market time charter
acquired (2,849,419) (2,849,419) (975,639)
------------ ------------ ------------
Amortization of deferred revenue
of above market time charter
acquired 737,773 737,773 737,773
------------ ------------ ------------
Adjusted EBITDA 20,917,096 18,699,288 6,161,378
============ ============ ============
Three Months Three Months Three Months
Ended Ended Ended
March 31, March 31, March 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
------------ ------------ ------------
Net cash flow provided by
operating activities 22,754,553 22,754,553 6,432,365
------------ ------------ ------------
Changes in operating assets /
liabilities (1,615,602) (3,833,410) 408,888
------------ ------------ ------------
Loss from sale of vessels - - (86,533)
------------ ------------ ------------
Gain on derivatives (realized) - - (52,628)
------------ ------------ ------------
Gain (loss) on trading
securities, net 17,042 17,042 (104,575)
------------ ------------ ------------
Investment in trading
securities, net 265,182 265,182 -
------------ ------------ ------------
Share-based compensation (367,740) (367,740) (269,076)
------------ ------------ ------------
Interest, net (136,339) (136,339) (167,063)
------------ ------------ ------------
Adjusted EBITDA 20,917,096 18,699,288 6,161,378
============ ============ ============
EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings before
interest, income taxes, depreciation, amortization, gain in derivatives and
amortization of deferred revenues from above or below market time charters
acquired. 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 our 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 we assess our financial performance and liquidity
position and because we believe that it presents useful information to
investors regarding a company's ability to service and/or incur
indebtedness. The Company's definition of Adjusted EBITDA may not be the
same as that used by other companies in the shipping or other industries.
Euroseas Ltd.
Reconciliation of Net Income Excluding the Effect from Unrealized Gain on
derivatives,
Unrealized Gain or Loss on trading securities, Amortization of the
Fair Value of Charters Acquired and Loss from Vessel Sale to Net Income
(All amounts expressed in U.S. Dollars - except share data and per share
amounts)
Three Months Three Months Three Months
Ended Ended Ended
March 31, March 31, March 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
------------- ------------- -------------
Net income 15,172,848 13,649,373 3,945,272
------------- ------------- -------------
Unrealized gain on
derivatives - - (1,849,544)
------------- ------------- -------------
Unrealized (gain) loss on
investments (17,042) (17,042) 104,575
------------- ------------- -------------
Amortization of deferred
revenue of below market time
charter acquired (2,849,419) (2,849,419) (975,639)
------------- ------------- -------------
Amortization of deferred
revenue of above market time
charter acquired 737,773 737,773 737,773
------------- ------------- -------------
Loss from sale of vessels - - 86,533
------------- ------------- -------------
Net Income excluding
unrealized gain on
derivatives, unrealized gain
or loss on trading
securities, amortization of
the fair value of charters
acquired and loss on vessel
sale 13,044,160 11,520,685 2,048,970
------------- ------------- -------------
Net Income per share
excluding unrealized gain on
derivatives, unrealized gain
or (loss) on trading
securities, amortization of
the fair value of charters
acquired and loss on vessel
sale, basic 0.43 0.38 0.07
------------- ------------- -------------
Weighted average number of
shares, basic 30,321,553 30,321,553 30,575,611
------------- ------------- -------------
Net Income per share
excluding unrealized gain on
derivatives, unrealized gain
or (loss) on trading
securities, amortization of
the fair value of charters
acquired and loss on vessel
sale, diluted 0.43 0.38 0.07
------------- ------------- -------------
Weighted average number of
shares, diluted 30,379,994 30,379,994 30,602,510
============= ============= =============
About Euroseas Ltd.
Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of
the Marshall Islands to consolidate the ship owning interests of the Pittas
family of Athens, Greece, which has been in the shipping business over the
past 136 years. Euroseas trades on the NASDAQ Global Select Market under
the ticker ESEA.
Euroseas operates in the dry cargo, drybulk and container shipping markets.
Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2000
certified affiliated ship management company, which is responsible for the
day-to-day commercial and technical management and operations of the
vessels. Euroseas employs its vessels on spot and period charters and
through pool arrangements.
The Company has a fleet of 16 vessels, including 3 Panamax drybulk
carriers, 1 Handymax and 1 Handysize drybulk carriers, 3 Intermediate
container ship, 5 Handysize container ships, 2 Feeder container ships and a
multipurpose dry cargo vessel. Euroseas` 5 drybulk carriers have a total
cargo capacity of 296,479 dwt, its 10 container ships have a cargo capacity
of 17,787 teu and its 1 multipurpose vessel has a cargo capacity of 22,568
dwt or 950 teu.
Forward-Looking Statement
This press release contains forward-looking statements (as defined in
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended) concerning future events
and the Company's growth strategy and measures to implement such strategy;
including expected vessel acquisitions and entering into further time
charters. Words such as "expects," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates," and variations of such words and
similar expressions are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. These statements involve
known and unknown risks and are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. Actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to changes in the demand for
dry bulk vessels and container ships, competitive factors in the market in
which the Company operates; risks associated with operations outside the
United States; and other factors listed from time to time in the Company's
filings with the Securities and Exchange Commission. The Company expressly
disclaims any obligations or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any
change in the Company's expectations with respect thereto or any change in
events, conditions or circumstances on which any statement is based.
Visit our website www.euroseas.gr
Contact Information: Company Contact Tasos Aslidis Chief Financial Officer Euroseas Ltd. 11 Canterbury Lane Watchung, NJ 07069 Tel. (908) 301-9091 E-mail: aha@euroseas.gr Investor Relations / Financial Media Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: euroseas@capitallink.com