-- Net loss of $16.3 million or $0.53 loss per share basic and diluted on
total net revenues of $16.5 million. The results include a $9.0 million
loss from the sale of two vessels. Excluding the effect on the losses
for the quarter of the loss from the sale of the vessels as well as the
effect from the unrealized losses on derivatives and trading securities
and the amortization of the fair value of time charter contracts
acquired, the loss for the quarter ended December 31, 2009 would have
been $4.8 million or $0.15 loss per share basic and diluted.
-- Adjusted EBITDA was $0.4 million. Please refer to a subsequent section
of the Press Release for a reconciliation of adjusted EBITDA to net
loss.
-- An average of 16.7 vessels were operated during the fourth quarter of
2009 earning an average time charter equivalent rate of $13,892 per
day.
-- Declared a quarterly dividend of $0.05 per share for the fourth quarter
of 2009 payable on March 26, 2010 to shareholders of record on
March 17, 2010. This is the eighteenth consecutive quarterly dividend
declared.
Full Year 2009 Highlights:
-- Net loss of $15.6 million or $0.51 loss per share basic and diluted on
total net revenues of $63.8 million. The results include a $9.0 million
loss from the sale of two vessels. Excluding the effect on the losses
for the year of the loss from the sale of the two vessels as well as
the effect from the unrealized losses on derivatives and trading
securities and amortization of the fair value of time charter contracts
acquired the loss for the year ended December 31, 2009 would have been
$2.6 million or $0.09 loss per share basic and diluted.
-- Adjusted EBITDA was $17.4 million. Please refer to a subsequent section
of the Press Release for a reconciliation of adjusted EBITDA to net
loss.
-- An average of 16.3 vessels were operated during 2009 earning an average
time charter equivalent rate of $13,698 per day
-- Declared quarterly dividends for the first, second, third and fourth
quarters of 2009, aggregating $0.30 per share.
Aristides Pittas, Chairman and CEO of Euroseas commented: "2009 was a
difficult year for Euroseas, as for most shipping companies, as rates
declined dramatically compared to the summer and fall of 2008. And, while
drybulk rates rebounded by early spring of 2009, containership rates have
stayed at historically low levels since. In this challenging environment,
we have been fortunate to reap the benefits of our risk management program
which in 2008 enabled us to avoid investing in vessels at the peak of the
markets. As a result, the huge decline of the markets in 2009 found us with
a very strong balance sheet -- lots of cash and low leverage -- which
enabled us to not only withstand the low rate environment but use the
depressed markets as an opportunity to renew our fleet at a fraction of the
cost compared to 2008. In total, we bought 3 drybulk vessels of an average
age of about 11 years while we sold our 4 oldest vessels with an average
age of about 25 years (3 bulkers and 1 containership).
However, despite our successful fleet renewal, our results for the fourth
quarter 2009 and 2009 as a whole were affected by the state of the
containership market and by our decision early in 2009 to hedge our drybulk
exposure in the FFA markets.
Looking forward into 2010, we expect on the one hand the containership
market to remain at very low levels and on the other hand the drybulk
market to be quite volatile affected by an emerging markets -- primarily
Chinese-led -- recovery and quite a number of scheduled vessel deliveries.
As a result, we have currently covered 100% of our drybulk capacity for
2010 at profitable levels, including half of it hedged with FFA contracts,
and about 45% of our container available days although the latter at rates
that are just covering -- on average -- operating costs. At the same time,
we continue to look at the containership markets as a great opportunity to
invest in more modern vessels at historically low prices, and to that
effect we have been building our strategy over the last 6 months. The
closing of our agreement to form a new vehicle together with Eton Park and
Rhone Capital, two private investment firms, to exploit the opportunities
we currently see arising on a bigger scale has been somewhat delayed but we
remain confident that this deal will close within the first quarter of
2010.
Our Board confirmed its intention to continue paying dividends to our
shareholders throughout the market cycles in parallel with our expansion
program, as far as practically possible. In that respect we are happy to
have declared a quarterly dividend of $0.05 per share which represents an
annualized yield of about 5% on the basis of our stock price on February
26, 2010."
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results
of the full year of 2009 reflect significantly lower revenues compared to
2008 due to the lower average time charter equivalent rate our vessels have
achieved during the year. Our results for the fourth quarter 2009 were
also lower compared to the same period for 2008. Our results were also
negatively affected by the loss on the sale of two vessels in December
2009, m/v Artemis and m/v Gregos, settlement of certain interest rate swaps
and FFA contracts in 2009 and other non-cash losses on interest rate
derivatives, FFAs and declines in value of a small amount of securities
held.
Daily vessel operating expenses, including management fees, during 2009
reflect a decrease of about 16% on a per vessel per day basis compared to
2008. A little more than half of this decrease is due to the fact that
three of our vessels were laid-up during most of 2009. Even after adjusting
for this factor, we maintain one of the lowest operating cost structures
amongst the public shipping companies which, we believe, is one of our
competitive advantages and a significant part of our overall strategy. We
will continue to focus on controlling and reducing our costs while ensuring
safe operations.
We have been and are currently satisfying all our debt covenants. At the
end of 2009, our outstanding debt was about $71.5 million versus
unrestricted cash and cash in retention accounts of more than $48 million.
Our scheduled debt repayments in 2010 are about $14 million, a number low
enough to provide us with operational cash flow comfort. We estimate that
our cash flow breakeven for 2010 including debt repayments but excluding
dividend payments is around $10,000 per vessel per day."
Fourth Quarter 2009 Results:
For the fourth quarter of 2009, the Company reported total net revenues of
$16.5 million representing a 30.2% decrease over total net revenues of
$23.6 million during the fourth quarter of 2008. The Company reported a net
loss for the period of $16.3 million as compared to net loss of $22.2
million for the fourth quarter of 2008. The results for the fourth quarter
of 2009 include a $9.0 loss from the sale of two vessels and a $9.9 million
loss on derivatives and trading securities as compared to $4.8 million loss
on derivatives and trading securities for the same period of 2008. On
average, 16.7 vessels were operated during the fourth quarter 2009 earning
an average time charter equivalent rate of $13,892 per day compared to 16.0
vessels in the same period 2008 earning on average $17,420 per day.
Adjusted EBITDA for the fourth quarter of 2009 was $0.4 million, a 96.3%
decrease from $11.4 million achieved during the fourth quarter of 2008.
Please see below for Adjusted EBITDA reconciliation to net income and cash
flow provided by operating activities.
Basic and diluted loss per share for the fourth quarter of 2009 was $0.53,
calculated on 30,813,960 weighted average number of shares outstanding
compared to basic and diluted loss per share of $0.73 for the fourth
quarter of 2008, calculated on 30,520,584 weighted average number of shares
outstanding.
Excluding the effect on the loss for the quarter of the loss on sale of
vessels, unrealized loss on trading securities and derivatives, and
amortization of the fair value of time charter contracts acquired the loss
per share for the quarter ended December 31, 2009 would have been $0.15 per
share basic and diluted compared to earnings of $0.24 per share basic and
diluted for the quarter ended December 31, 2008. Usually, security analysts
do not include the above items in their published estimates of earnings per
share.
The Company has declared a quarterly dividend of $0.05 per share, which
represents its eighteenth consecutive quarterly dividend and a 50% decrease
over last year's fourth quarter dividend, reflecting the much worse market
conditions for the Company's containerships. The dividend is payable on
March 26, 2010 to shareholders of record as of March 17, 2010.
Year Ended December 31, 2009 Results:
For the year ended December 31, 2009, the Company reported total net
revenues of $63.8 million representing a 49.5% decrease compared to 2008.
Net loss for the year amounted to $15.6 million compared to a net income
for 2008 of $21.5 million. The results for the year also include a $9.0
million loss from the sale of two vessels and a $15.4 million loss on
derivatives and trading securities as compared to $5.5 million loss on
derivatives and trading securities inclusive of dividend income for the
same period of 2008.
Adjusted EBITDA for the year was $17.4 million, a 75.8% decrease over 2008
(please see below for Adjusted EBITDA reconciliation to net income / loss
and cash flow from operating activities). In the year ended December 31,
2008, net revenues were $126.3 million, net income was $21.5 million and
Adjusted EBITDA was $72.0 million. On average,16.3 vessels were operated
during the year 2009 earning an average time charter equivalent rate of
$13,698 per day compared to 15.6 vessels in the same period 2008 earning a
time charter equivalent rate of $23,695.
Basic and diluted losses per share for the year ended December 31, 2009
were $0.51 calculated on 30,648,991 weighted average number of shares
outstanding, compared to basic earnings per share of $0.71 and diluted
earnings per share of $0.70 for 2008 calculated on 30,437,107 and
30,505,476 weighted average number of shares outstanding, respectively.
Excluding the effect on the loss for the year of the loss on sale of
vessels, unrealized loss on trading securities and derivatives, and the
amortization of the fair value of time charter contracts acquired the loss
per share for the year ended December 31, 2009 would have been $0.09 per
share basic and diluted, while for the year ended December 31, 2008 the
earnings per share would have been $1.51 per share basic and $1.50 per
share diluted. Usually, security analysts do not include the above 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 year ended
December 31, 2008 decreased by $2.2 and net loss for the quarter ended
December 31, 2008 decreased by $0.3 million, or $0.07 and $0.01 per share,
respectively, basic and diluted.
The Company reflected this change as a change in accounting principle from
an accepted accounting principle to a preferable accounting principle in
accordance with FASB ASC 250-10 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 decreased net loss for the three month period and
year ended December 31, 2009 by $1.6 and $6.4 million, respectively, or
$0.05 and $0.21 per share, respectively, basic and diluted.
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
Year TCE Rate
Name Type Dwt TEU Built Employment ($/day)
---- ---- --- --- ----- ---------- --------
Drybulk Vessels
---- --- --- ----- ---------- --------
PANTELIS Panamax 74,020 2000 TC 'til Mar-10 $22,500
Then until Feb-12 $17,500
---- --- --- ----- ---------- --------
ELENI P Panamax 72,119 1997 TC 'til May-10 $15,350
---- --- --- ----- ---------- --------
IRINI (*) Panamax 69,734 1988 Baumarine Pool
---- --- --- ----- ---------- --------
ARISTIDES N.P. Panamax 69,268 1993 TC 'til Mar-10 $12,350
Then until Mar-12 $18,900
---- --- --- ----- ---------- --------
MONICA P (**) Handymax 46,667 1998 Bulkhandling Pool
---- --- --- ----- ---------- --------
Total Drybulk
Vessels 5 331,808
---- --- --- ----- ---------- --------
Multipurpose Dry
Cargo Vessels
---- --- --- ----- ---------- --------
TASMAN TRADER 1 22,568 950 1990 TC 'til Mar-12 $9,500 'til
Dec-10,
$9,000 'til
Mar-12
---- --- --- ----- ---------- --------
Container
Carriers
---- --- --- ----- ---------- --------
MAERSK NOUMEA Inter- 34,677 2,556 2001 TC 'til Aug-11 $16,800 'til
mediate (3 annual options Aug-11
'til Aug-14) $18,735 'til
Aug-12
$19,240 'til
Aug-13
$19,750 'til
Aug-14
---- --- --- ----- ---------- --------
TIGER BRIDGE Inter- 31,627 2,228 1990 TC 'til Jun-10 $4,000
mediate (option 'til Mar-11) $4,000
(option 'til Mar-12) $7,500
---- --- --- ----- ---------- --------
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
---- --- --- ----- ---------- --------
CAPTAIN COSTAS
(ex-OEL
TRANSWORLD) Handy size 30,007 1,742 1992 TC til Mar-10 $4,000
then TC 'til Jun-10 $4,250
---- --- --- ----- ---------- --------
YM PORT KELANG
(ex-MASTRO NICOS,
ex-YM
XINGANG I) Handy size 23,596 1,599 1993 TC 'til Nov-10 $3,750
(option 'til Nov-11) $5,900
---- --- --- ----- ---------- --------
MANOLIS P Handy size 20,346 1,452 1995 TC 'til Apr-10 $3,850
(option 'til Oct-10) $4,000
(option 'til Oct-11) CONTEX
(***)
less 10%
---- --- --- ----- ---------- --------
NINOS (ex-YM
QINGDAO I) Feeder 18,253 1,169 1990 TC 'til Apr-10 $3,900
(option 'til Jun-10) $4,200
---- --- --- ----- ---------- --------
KUO HSIUNG Feeder 18,154 1,169 1993 TC 'til Mar-10
(option 'til Dec-10) $3,850
'til
Dec-10
(option 'til Jun-11) $5,300
'til
Jun-11
---- --- --- ----- ---------- --------
Total Container
Carriers 9 243,994 15,779
---- --- --- ----- ---------- --------
Fleet Grand
Total 15 598,370 16,729
---- --- --- ----- ---------- --------
Note: TC denotes time charter. All dates listed are the earliest redelivery
dates under each TC. All extension option are at the option of the
charterers.
(*) "Irini" is employed in the Baumarine spot pool that is managed by
Klaveness, a major global charterer in the drybulk market.
(**) "Monica P" is employed in the Bulkhandling spot pool that is also
managed by Klaveness.
(***) CONTEX is a charter market index for 1700 teu containership vessels
Summary Fleet Data:
3 months, 3 months, Year Year
ended ended ended ended
December December December December
31, 2008 31, 2009 31, 2008 31, 2009
---------- ---------- ---------- ----------
FLEET DATA
Average number of vessels
(1) 16.00 16.68 15.61 16.30
Calendar days for fleet
(2) 1,472.0 1,535.0 5,714.0 5,949.0
Scheduled off-hire days
incl. laid-up (3) 11.9 262.0 150.8 966.5
Available days for fleet
(4) = (2) - (3) 1,460.1 1,273.0 5,563.2 4,982.5
Commercial off-hire days
(5) 40.1 67.6 47.8 223.7
Operational off-hire days
(6) 18.3 11.8 64.9 35.0
Voyage days for fleet
(7) = (4) - (5) - (6) 1,401.7 1,193.6 5,450.5 4,723.8
Fleet utilization
(8) = (7) / (4) 96.0% 93.8% 98.0% 94.8%
Fleet utilization,
commercial
(9) = ((4) - (5)) / (4) 97.3% 94.7% 99.1% 95.5%
Fleet utilization,
operational
(10) = ((4) - (6)) / (4) 98.7% 99.1% 98.9% 99.3%
AVERAGE DAILY RESULTS
Time charter equivalent
rate (11) 17,420 13,892 23,695 13,698
Vessel operating expenses
excl. drydocking expenses
(12) 5,730 4,955 5,759 4,832
General and administrative
expenses (13) 525 516 710 612
Total vessel operating
expenses excl. dd expenses
(14) 6,255 5,471 6,469 5,444
Drydocking expenses (15) 623 - 1,073 321
---------- ---------- ---------- ----------
(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) The scheduled off-hire days including vessels 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) 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.
(5) Commercial off-hire days. We define commercial off-hire days as days
waiting to find employment.
(6) 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.
(7) 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.
(8) 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.
(9) 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.
(10) Fleet utilization, operational. We calculate operational fleet
utilization by dividing our available net of operational off-hire days
during a period by our available days during that period.
(11) 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
voyage 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. 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.
(12) Daily vessel operating expenses, which include 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. Drydocking expenses are
reported separately.
(13) Daily general and administrative expense is calculated by dividing
general and administrative expense by fleet calendar days for the relevant
time period.
(14) Total vessel operating expenses, or TVOE, is a measure of our total
expenses associated with operating our vessels excluding drydocking
expenses. 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.
(15) Drydocking expenses, which include expenses during drydockings that
would been capitalized and amortized under the deferral method divided by
the fleet calendar days for the relevant period. Drydocking expenses could
vary substantially from period to period depending on how many vessels
underwent drydocking during the period.
Conference Call and Webcast:
Tomorrow, March 2, 2010 at 9:30 a.m. EST, 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."
A recording of the conference call will be available until March 9, 2010 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 slides presentation on the fourth quarter and year ended December 31,
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 Statement of Operations
(All amounts expressed in U.S. Dollars - except share amounts)
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 132,243,918 132,243,918 66,215,669
Commissions (5,940,460) (5,940,460) (2,433,776)
Net revenues 126,303,458 126,303,458 63,781,893
Operating expenses
Voyage expenses 3,092,323 3,092,323 1,510,551
Vessel operating expenses 27,521,194 27,521,194 23,673,480
Drydocking expenses - 6,129,257 1,912,474
Amortization and depreciation 32,230,901 28,284,752 19,092,384
Impairment loss / net loss on
sale of vessels 25,113,364 25,113,364 8,959,321
Management fees 5,387,415 5,387,415 5,074,297
Other general and administrative
expenses 4,057,736 4,057,736 3,640,534
Charter termination fees - - (103,577)
Total operating expenses 97,402,933 99,586,041 63,759,464
Operating income 28,900,525 26,717,417 22,429
Other income/(expenses)
Interest and finance cost (2,930,737) (2,930,737) (1,437,637)
Change in fair value of
derivatives (3,474,635) (3,474,635) (15,778,209)
Realized & unrealized gain /
(loss) on trading securities (2,312,790) (2,312,790) 406,119
Foreign exchange gain 7,888 7,888 36,477
Interest income 3,168,501 3,168,501 1,123,317
Dividend income 315,266 315,266 -
Other expenses, net (5,226,507) (5,226,507) (15,649,933)
------------ ------------ ------------
Net income / (loss) 23,674,018 21,490,910 (15,627,504)
------------ ------------ ------------
Earnings / (loss) per share,
basic 0.78 0.71 (0.51)
Weighted average number of
shares, basic 30,437,107 30,437,107 30,648,991
------------ ------------ ------------
Earnings / (loss) per share,
diluted 0.78 0.70 (0.51)
------------ ------------ ------------
Weighted average number of
shares, diluted 30,505,476 30,505,476 30,648,991
------------ ------------ ------------
Three Months Three Months Three Months
December 31, December 31, December 31,
2008 2008 2009
(as (as
originally adjusted
reported under the
under the direct
deferral expense
method) method)
------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 24,679,143 24,679,143 17,117,138
Commissions (1,112,667) (1,112,667) (658,815)
Net revenues 23,566,476 23,566,476 16,458,323
Operating expenses
Voyage expenses 262,461 262,461 535,513
Vessel operating expenses 7,168,597 7,168,597 6,237,576
Drydocking expenses - 917,200 -
Amortization and depreciation 6,886,703 5,680,610 4,701,556
Impairment loss / net loss on
sale of vessels 25,113,364 25,113,364 8,959,321
Management fees 1,265,760 1,265,760 1,366,947
Other general and administrative
expenses 772,561 772,561 792,067
Total operating expenses 41,469,446 41,180,553 22,592,980
Operating loss (17,902,970) (17,614,077) (6,134,657)
Other income/(expenses)
Interest and finance cost (619,077) (619,077) (409,420)
Change in fair value of
derivatives (3,364,429) (3,364,429) (9,827,627)
Realized and unrealized loss on
trading securities (1,478,023) (1,478,023) (115,751)
Foreign exchange loss 24,164 24,164 12,575
Interest income 783,159 783,159 170,805
Dividend income 41,510 41,510 -
Other expenses, net (4,612,696) (4,612,696) (10,169,418)
------------ ------------ ------------
Net loss (22,515,666) (22,226,773) (16,304,075)
------------ ------------ ------------
Loss per share, basic (0.74) (0.73) (0.53)
Weighted average number of
shares, basic 30,520,584 30,520,584 30,813,960
------------ ------------ ------------
Loss per share, diluted (0.74) (0.73) (0.53)
------------ ------------ ------------
Weighted average number of
shares, diluted 30,520,584 30,520,584 30,813,960
------------ ------------ ------------
Euroseas Ltd.
Consolidated Condensed Balance Sheet
(All amounts expressed in U.S. Dollars)
December 31, December 31, December 31,
2008 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 40,984,549
Trade accounts receivable 1,233,895 1,233,895 1,650,713
Other receivables, net 1,439,628 1,439,628 239,656
Due from related company 4,678,750 4,678,750 -
Inventories 2,011,973 2,011,973 1,869,238
Restricted cash 2,181,264 2,181,264 1,191,230
Other deposits - - 12,376,119
Vessels held for sale 6,067,020 6,067,020 -
Trading securities 771,727 771,727 436,598
Derivatives 61,670 61,670 -
Prepaid expenses 241,102 241,102 185,137
Total current assets 92,538,220 92,538,220 58,933,240
Fixed assets:
Vessels, net 231,963,606 231,963,606 257,270,824
Advances for vessel acquisition 1,821,798 1,821,798 -
Long-term assets:
Restricted cash 4,800,000 4,800,000 6,500,000
Deferred charges, net 7,771,342 373,702 327,694
Derivatives 68,038 68,038 386,536
Fair value of above market time
charter acquired 1,653,422 1,653,422 -
Total long-term assets 248,078,206 240,680,566 264,485,054
------------ ------------ -----------
Total assets 340,616,426 333,218,786 323,418,294
------------ ------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt, current portion 12,450,000 12,450,000 14,030,000
Trade accounts payable 2,283,488 2,283,488 1,843,182
Accrued expenses 1,206,466 1,206,466 1,060,326
Accrued dividends 116,750 116,750 46,750
Deferred revenue 4,533,601 4,533,601 1,247,782
Derivatives 827,210 827,210 10,799,132
Due to related company - - 1,416,380
Total current liabilities 21,417,515 21,417,515 30,443,552
Long-term liabilities:
Long term debt, net of current
portion 43,565,000 43,565,000 57,485,000
Derivatives 2,700,028 2,700,028 611,852
Fair value of below market time
charter acquired 8,704,811 8,704,811 3,424,627
Total long-term liabilities 54,969,839 54,969,839 61,521,479
Total liabilities 76,387,354 76,387,354 91,965,031
Shareholders' equity:
Common stock (par value $0.03,
100,000,000 shares authorized,
30,575,611 and 30,849,711
issued and outstanding) 917,269 917,269 925,492
Preferred shares (par value $0.01,
20,000,000 shares authorized,
no shares issued and outstanding)
Additional paid-in capital 234,567,670 234,567,670 235,588,391
Retained earnings / (deficit) 28,744,133 21,346,493 (5,060,620)
Total shareholders' equity 264,229,072 256,831,432 231,453,263
------------ ------------ -----------
Total liabilities and shareholders'
equity 340,616,426 333,218,786 323,418,294
------------ ------------ -----------
Euroseas Ltd.
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
December 31, December 31, December 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 / (loss) 23,674,018 21,490,910 (15,627,504)
Adjustments to reconcile net income/
(loss) to net cash provided by
operating activities:
Depreciation of vessels 28,284,752 28,284,752 19,092,384
Impairment loss / loss on sale of
vessels 25,113,364 25,113,364 8,959,321
Amortization of deferred charges 4,031,290 85,141 110,504
Amortization of fair value of time
charters (6,144,507) (6,144,507) (3,626,762)
Share-based compensation 1,618,484 1,618,484 820,189
Investment in trading securities,
net (192,859) (192,859) 741,248
Loss / (gain) on trading securities 2,312,790 2,312,790 (406,118)
Loss on derivatives 3,397,530 3,397,530 7,626,918
Changes in operating assets and
liabilities (7,811,121) (1,681,864) (9,852,520)
----------- ----------- -----------
Net cash provided by operating
activities 74,283,741 74,283,741 7,837,660
----------- ----------- -----------
Cash flows from investing
activities:
Purchase of vessels (43,582,320) (43,582,320) (62,224,639)
Advances for vessel acquisition (1,821,798) (1,821,798) -
Insurance proceeds - - 667,839
Change in restricted cash (741,385) (741,385) (709,966)
Proceeds from sale of vessels - - 16,668,001
----------- ----------- -----------
Net cash (used in) investing
activities (46,145,503) (46,145,503) (45,598,765)
----------- ----------- -----------
Cash flows from financing
activities:
Issuance of share capital 5,030 5,030 4,023
Net proceeds from shares issued 1,805,892 1,805,892 645,242
Dividends paid (34,547,949) (34,547,949) (10,849,609)
Loan arrangement fees paid - - (208,000)
Offering expenses paid (110,340) (110,340) (197,193)
Proceeds from long-term debt - - 33,000,000
Repayment of long-term debt (25,575,000) (25,575,000) (17,500,000)
----------- ----------- -----------
Net cash provided by/(used in)
financing activities (58,422,367) (58,422,367) 4,894,463
----------- ----------- -----------
Net decrease in cash and cash
equivalents (30,284,129) (30,284,129) (32,866,642)
Cash and cash equivalents at
beginning of year 104,135,320 104,135,320 73,851,191
----------- ----------- -----------
Cash and cash equivalents at end of
year 73,851,191 73,851,191 40,984,549
----------- ----------- -----------
Euroseas Ltd.
Reconciliation of Adjusted EBITDA to
Net Income / (Loss) and Cash Flow Provided By / (Used in)
Operating Activities
(All amounts expressed in U.S. Dollars)
Three Months Three Months
Ended Ended
December 31, December 31,
2008 2008
(as originally (as adjusted
reported under the Three Months
under the direct Ended
deferral expense December 31,
method) method) 2009
------------ ------------ ------------
Net loss (22,515,666) (22,226,773) (16,304,075)
------------ ------------ ------------
Interest and finance costs, net
(incl. interest income) (164,082) (164,082) 238,615
------------ ------------ ------------
Depreciation, amortization of
deferred charges and impairment
loss 32,000,067 30,793,974 4,701,556
------------ ------------ ------------
Loss from vessel sales - - 8,959,321
------------ ------------ ------------
Loss on derivatives, net 3,364,429 3,364,429 5,358,850
------------ ------------ ------------
Amortization of deferred revenue
of below market time charter
acquired (1,077,768) (1,077,768) (2,533,811)
------------ ------------ ------------
Amortization of deferred revenue
of above market time charter
acquired 737,773 737,773 -
------------ ------------ ------------
Adjusted EBITDA 12,344,753 11,427,553 420,456
============ ============ ============
Three Months Three Months
Ended Ended
December 31, December 31,
2008 2008
(as originally (as adjusted
reported under the Three Months
under the direct Ended
deferral expense December 31,
method) method) 2009
------------ ------------ ------------
Net cash flow provided by / (used
in) operating activities 13,690,216 13,690,216 (3,657,862)
------------ ------------ ------------
Changes in operating assets /
liabilities 335,043 (582,157) 3,732,063
------------ ------------ ------------
Loss on interest rate derivatives
(realized) 77,105 77,105 371,953
------------ ------------ ------------
Loss on trading securities, net (1,478,022) (1,478,022) (115,752)
------------ ------------ ------------
Investment in trading securities,
net 130,814 130,814 -
------------ ------------ ------------
Share-based compensation (225,661) (225,661) (110,475)
------------ ------------ ------------
Interest, net (184,742) (184,742) 200,529
------------ ------------ ------------
Adjusted EBITDA 12,344,753 11,427,553 420,456
============ ============ ============
Year Ended Year Ended
December 31, December 31,
2008 2008
(as originally (as adjusted
reported under under the Year Ended
the deferral direct expense December 31,
method) method) 2009
------------ ------------ ------------
Net income / (loss) 23,674,018 21,490,910 (15,627,504)
------------ ------------ ------------
Interest and finance costs,
net (incl. interest income) (237,764) (237,764) 314,320
------------ ------------ ------------
Depreciation, amortization of
deferred charges and
impairment loss 57,344,265 53,398,116 19,092,384
------------ ------------ ------------
Loss from vessel sales - - 8,959,321
------------ ------------ ------------
Loss on derivatives, net 3,474,635 3,474,635 8,303,930
------------ ------------ ------------
Amortization of deferred revenue
of below market time charter
acquired (9,095,599) (9,095,599) (5,280,184)
------------ ------------ ------------
Amortization of deferred revenue
of above market time charter
acquired 2,951,092 2,951,092 1,653,422
------------ ------------ ------------
Adjusted EBITDA 78,110,647 71,981,390 17,415,689
============ ============ ============
Year Ended Year Ended
December 31, December 31,
2008 2008
(as originally (as adjusted
reported under under the Year Ended
the deferral direct expense December 31,
method) method) 2009
------------ ------------ ------------
Net cash flow provided by
operating activities 74,283,741 74,283,741 7,837,660
------------ ------------ ------------
Changes in operating assets /
liabilities 7,811,121 1,681,864 9,852,520
------------ ------------ ------------
Loss on interest rate
derivatives (realized) 77,105 77,105 677,011
------------ ------------ ------------
(Loss) / gain on trading
securities, net (2,312,790) (2,312,790) 406,118
------------ ------------ ------------
Investment in trading securities,
net 192,859 192,859 (741,248)
------------ ------------ ------------
Share-based compensation (1,618,484) (1,618,484) (820,189)
------------ ------------ ------------
Interest, net (322,905) (322,905) 203,817
------------ ------------ ------------
Adjusted EBITDA 78,110,647 71,981,390 17,415,689
============ ============ ============
EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings / loss
before interest, taxes, depreciation, impairment loss, loss from sale of
vessels, amortization of deferred charges, amortization of fair value from
above or below market time charters acquired and gain or loss on
derivatives. Adjusted EBITDA does not represent and should not be
considered as an alternative to net income / loss 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 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 to Net Income / (Loss) Excluding the Effect from Unrealized
Loss on Derivatives, Unrealized Loss on Trading Securities, Impairment
Loss, Loss on Sale of Vessels, Amortization of the Fair Value of Charters
Acquired to Net Income / (Loss) (All amounts expressed in U.S. Dollars -
except share data and per share amounts)
Three Months Three Months
Ended Ended
December 31, December 31,
2008 2008
(as originally (as adjusted
reported under the Three Months
under the direct Ended
deferral expense December 31,
method) method) 2009
------------- ------------- -------------
Net loss (22,515,666) (22,226,773) (16,304,075)
------------- ------------- -------------
Unrealized loss on
derivatives, net 3,287,324 3,287,324 4,986,897
------------- ------------- -------------
Unrealized loss on trading
securities 1,436,513 1,436,513 115,751
------------- ------------- -------------
Impairment loss 25,113,364 25,113,364 -
------------- ------------- -------------
Loss from vessel sales - - 8,959,321
------------- ------------- -------------
Amortization of deferred
revenue of below market time
charter acquired (1,077,768) (1,077,768) (2,533,811)
------------- ------------- -------------
Amortization of deferred
revenue of above market time
charter acquired 737,773 737,773 -
------------- ------------- -------------
Net income / (loss) excluding
unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired 6,981,540 7,270,433 (4,775,917)
------------- ------------- -------------
Net income / (loss) per share
excluding unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired, basic 0.23 0.24 (0.15)
------------- ------------- -------------
Weighted average number of
shares, basic 30,520,584 30,520,584 30,813,960
------------- ------------- -------------
Net income / (loss) per share
excluding unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired, diluted 0.23 0.24 (0.15)
------------- ------------- -------------
Weighted average number of
shares, diluted 30,534,713 30,534,713 30,813,960
------------- ------------- -------------
Year Ended Year Ended
December 31, December 31,
2008 2008
(as originally (as adjusted
reported under the
under the direct Year Ended
deferral expense December 31,
method) method) 2009
------------- ------------- -------------
Net income / (loss) 23,674,018 21,490,910 (15,627,504)
------------- ------------- -------------
Unrealized loss on
derivatives 3,397,530 3,397,530 7,626,919
------------- ------------- -------------
Unrealized loss on trading
securities 1,997,524 1,997,524 5,325
------------- ------------- -------------
Impairment loss 25,113,364 25,113,364 -
------------- ------------- -------------
Loss from vessel sales - - 8,959,321
------------- ------------- -------------
Amortization of deferred
revenue of below market time
charter acquired (9,095,599) (9,095,599) (5,280,184)
------------- ------------- -------------
Amortization of deferred
revenue of above market time
charter acquired 2,951,092 2,951,092 1,653,422
------------- ------------- -------------
Net income / (loss) excluding
unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired 48,037,929 45,854,821 (2,662,701)
------------- ------------- -------------
Net income / (loss) per share
excluding unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired, basic 1.58 1.51 (0.09)
------------- ------------- -------------
Weighted average number of
shares, basic 30,437,107 30,437,107 30,648,991
------------- ------------- -------------
Net income / (loss) per share
excluding unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired, diluted 1.57 1.50 (0.09)
------------- ------------- -------------
Net income / (loss) excluding
unrealized loss on
derivatives, unrealized loss
on trading securities,
impairment loss, loss from
vessel sales, amortization of
the fair value of charters
acquired 30,505,476 30,505,476 30,648,991
------------- ------------- -------------
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 15 vessels, including 4 Panamax drybulk carriers
and 1 Handymax drybulk carrier, 2 Intermediate containership, 5 Handysize
containerships, 2 Feeder containerships and a multipurpose dry cargo
vessel. Euroseas` 5 drybulk carriers have a total cargo capacity of 331,808
dwt, its 9 containerships have a cargo capacity of 15,779 teu and its
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 our expected joint venture and vessel acquisitions and 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
drybulk vessels and containerships, 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: nbornozis@capitallink.com