ATHENS, Greece, March 18, 2009 (GLOBE NEWSWIRE) -- Paragon Shipping Inc. (Nasdaq:PRGN), a global shipping transportation company specializing in drybulk cargoes, announced today its results for the three months and year ended December 31, 2008.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, "I am pleased to announce yet another profitable quarter and once again we have delivered a solid performance against a background of a harsh worldwide economic environment and a depressed shipping market."
Mr. Bodouroglou continued, "In addition, we amended our six credit facilities that will be in effect through December 31, 2009 and on terms that allow Paragon to maintain its high level of liquidity."
Mr. Bodouroglou concluded, "Paragon continues to have a considerable chartering base with 98% of our fleet capacity under contract for 2009, 55% for 2010 and 38% for 2011. So far our charterers are meeting their contractual obligations. Moreover, we were not drawn into the newbuilding market and therefore have no capital commitments to finance which has proved costly for many drybulk shipping operators. I am also pleased to announce that our board of directors has elected to continue paying dividends in this tough economic environment for the fourth quarter of 2008. Given the extraordinary market conditions and uncertainty surrounding the global economy, our board decided to reduce our quarterly dividend to $0.05 per share, which provides us with additional financial flexibility while also delivering value to our shareholders. While we believe 2009 will be a challenging year for the drybulk market, we expect Paragon not only to weather the storm but to have the financial strength and ability to seek investment opportunities in the year to come."
Fourth Quarter 2008 Financial Results:
Time charter revenue for the fourth quarter of 2008 was $44.7 million, compared to $30.4 million for the fourth quarter of 2007. The Company reported net income of $10.0 million, or $0.37 per basic and diluted share for the fourth quarter of 2008, calculated on 27,038,015 weighted average number of basic shares, and on 27,038,015 weighted average number of diluted shares, outstanding for the period and reflecting the impact of the non-cash items discussed below. For the fourth quarter of 2007, the Company reported net income of $7.7 million, or $0.31 and $0.29 per basic and diluted share, respectively, calculated on 25,334,026 weighted average number of basic shares and on 26,330,136 weighted average number of diluted shares.
Excluding all non-cash items described below, adjusted net income for the fourth quarter of 2008 was $14.0 million, or $0.52 per basic and diluted share. This compares to adjusted net income of $3.6 million, or $0.14 per basic and diluted share, for the fourth quarter of 2007. Please refer to the table at the back of this press release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share.
EBITDA was $22.7 million for the fourth quarter of 2008, compared to $18.0 million for the fourth quarter of 2007. This was calculated by adding to net income of $10.0 million for the fourth quarter of 2008, net interest expense and depreciation that in the aggregate amounted to $12.7 million for the fourth quarter of 2008. Adjusted EBITDA, excluding all non-cash items described below, was $26.0 million for the fourth quarter of 2008, compared to $13.2 million for the fourth quarter of 2007. Please see the table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated an average of 12 vessels during the fourth quarter of 2008, earning an average time charter equivalent rate of $39,361 per day, compared to an average of 9.68 vessels during the fourth quarter of 2007, earning an average time charter equivalent rate of $35,284 per day.
Total adjusted operating expenses for the fourth quarter of 2008 were $10.1 million, or approximately $9,181 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $0.1 million of share-based compensation for the period. For the fourth quarter of 2007, total adjusted operating expenses were $9.5 million, or approximately $10,675 per day, including vessel operating expenses, management fees and general and administrative expenses, but excluding $0.3 million of share-based compensation.
Fourth Quarter 2008 Non-cash Items
The Company's results for the three months ended December 31, 2008 included the following non-cash items:
* Non-cash revenue of $5.3 million and depreciation expense of $0.7 million associated with below market time charters attached to vessels acquired, which increases net revenue (amortized over the remaining period of the time charter) and increases depreciation expense (amortized over the remaining useful life of the vessel). These non- cash items contributed an aggregate of $4.6 million to net income, or $0.17 to basic and diluted earnings per share, for the three months ended December 31, 2008. * An unrealized loss from interest rate swaps of $8.5 million, or $0.32 per basic and diluted share, respectively, for the three months ended December 31, 2008. * Non-cash expenses of $0.1 million, or $0.01 per basic and diluted share, relating to the amortization for the three months ended December 31, 2008, of the compensation cost recognized for restricted common shares issued to executive officers, directors and employees.
In the aggregate, these non-cash items contributed $4.2 million to net income, or $0.15 to earnings per basic and diluted share, for the three months ended December 31, 2008.
Dividend Declared
The Company's Board of Directors declared a quarterly dividend of $0.05 per share, payable on April 9, 2009, to shareholders of record as of March 30, 2009.
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping Inc. employs vessels under fixed rate charters for periods ranging from one to five years. The Company has secured under such contracts 98%, 55% and 38% of its fleet capacity under for 2009, 2010 and 2011, respectively.
Cash Flows
For the year ended December 31, 2008 the Company generated net cash from operating activities of $83.5 million, compared to $42.8 million in the year ended December 31, 2007. For the year ended December 31, 2008, net cash used in investing activities was $78.1 million and cash from financing activities was $31.7 million. 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.
Year ended December 31, 2008 Financial Results:
Time charter revenue for the year ended December 31, 2008 was $169.3 million, compared to $76.7 million for the year ended December 31, 2007. The Company reported net income of $69.2 million, or $2.58 and $2.56 per basic and diluted share, respectively, for the year ended December 31, 2008, calculated on 26,819,923 weighted average number of basic shares, and on 27,010,013 weighted average number of diluted shares, outstanding for the period and reflecting the impact of the non-cash items discussed below. For the year ended December 31, 2007, the Company reported net income of $4.9 million, or $0.12 and $0.11 per basic and diluted share, respectively, calculated on 16,495,980 weighted average number of basic shares and on 17,438,463 weighted average number of diluted shares, respectively.
Excluding all non-cash items described below, adjusted net income for the year ended December 31, 2008, was $56.2 million, or $2.10 and $2.08 per basic and diluted share, respectively. This compares to adjusted net income of $18.7 million, or $1.13 and $1.07 per basic and diluted share for the year ended December 31, 2007. Please refer to the table at the back of this press release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share.
EBITDA was $116.1 million for the year ended December 31, 2008, compared to $31.4 million for the year ended December 31, 2007. This was calculated by adding to net income of $69.2 million for the year ended December 31, 2008, net interest expense and depreciation that in the aggregate amounted to $46.8 million for the year ended December 31, 2008. Adjusted EBITDA, excluding all non-cash items described below, was $100.3 million for the year ended December 31, 2008, compared to $44.4 million for the year ended December 31, 2007. Please see the table at the back of this press release for a reconciliation of net income to EBITDA and to Adjusted EBITDA.
The Company operated an average of 11.4 vessels during the year ended December 31, 2008, earning an average time charter equivalent rate of $39,439 per day, compared to an average of 7.18 vessels during the year ended December 31, 2007, earning an average time charter equivalent rate of $28,563 per day.
Total adjusted operating expenses for the year ended December 31, 2008, were $32.6 million, or approximately $7,809 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $0.5 million of share-based compensation. For the year ended December 31, 2007, total adjusted operating expenses were $20.3 million, or approximately $7,761 per day, including vessel operating expenses, management fees and general and administrative expenses, but excluding $20.2 million of share-based compensation.
Year ended December 31, 2008 Non-cash Items:
The Company's results for the year ended December 31, 2008 included the following non-cash items:
* Non-cash revenue of $26.6 million and depreciation expense of $2.8 million associated with below market time charters attached to vessels acquired, which increases net revenue (amortized over the remaining period of the time charter) and increases depreciation expense (amortized over the remaining useful life of the vessel). These non- cash items contributed an aggregate of $23.8 million to net income, or $0.89 and $0.88 to basic and diluted earnings per share, respectively, for the year ended December 31, 2008. * An unrealized loss from interest rate swaps of $10.3 million, or $0.38 per basic and diluted share, for the year ended December 31, 2008. * Non-cash expenses of $0.5 million, or $0.02 per basic and diluted share, relating to the amortization for the year ended December 31, 2008, of the compensation cost recognized for a total of 139,875 restricted common shares issued to executive officers, directors and employees.
In the aggregate, these non-cash items contributed $13.0 million to net income, or $0.48 to earnings per basic and diluted share, for the year ended December 31, 2008.
Conference Call and Webcast:
The Company's management will host a conference call to discuss the results on March 19, 2009 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 US), + 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 US), + 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 twelve vessels with a total carrying capacity of 765,137 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 drybulk shipping capacity, changes in our operating expenses, including bunker prices, dry-docking 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 March 18, 2009.
---------------------------------------------------------------
Name Type Dwt Year Built
---------------------------------------------------------------
Panamax
---------------------------------------------------------------
Deep Seas Panamax 72,891 1999
---------------------------------------------------------------
Calm Seas Panamax 74,047 1999
---------------------------------------------------------------
Kind Seas Panamax 72,493 1999
---------------------------------------------------------------
Pearl Seas Panamax 74,483 2006
---------------------------------------------------------------
Diamond Seas Panamax 74,274 2001
---------------------------------------------------------------
Coral Seas Panamax 74,477 2006
---------------------------------------------------------------
Golden Seas Panamax 74,475 2006
---------------------------------------------------------------
Total Panamax 7 517,140
---------------------------------------------------------------
Handymax
---------------------------------------------------------------
Blue Seas Handymax 45,654 1995
---------------------------------------------------------------
Clean Seas Handymax 46,640 1995
---------------------------------------------------------------
Crystal Seas Handymax 43,222 1995
---------------------------------------------------------------
Total Handymax 3 135,516
---------------------------------------------------------------
Supramax
---------------------------------------------------------------
Sapphire Seas Supramax 53,702 2005
---------------------------------------------------------------
Friendly Seas Supramax 58,779 2008
---------------------------------------------------------------
Total Supramax 2 112,481
---------------------------------------------------------------
Grand Total 12 765,137
---------------------------------------------------------------
Summary Fleet Data
-------------------------------------------
Fourth Quarter Ended Fourth Quarter Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
FLEET DATA
---------------------------------------------------------------------
Average number of
vessels (1) 9.68 12
---------------------------------------------------------------------
Available days for
fleet (2) 819 1,075
---------------------------------------------------------------------
Calendar days for
fleet (3) 891 1,104
---------------------------------------------------------------------
Fleet utilization (4) 92% 97%
---------------------------------------------------------------------
AVERAGE DAILY RESULTS (Expressed in United States Dollars)
---------------------------------------------------------------------
Time charter equivalent
(5) 35,284 39,361
---------------------------------------------------------------------
Time charter equivalent
Adjusted (5) 27,778 34,423
---------------------------------------------------------------------
Vessel operating
expenses (6) 4,308 4,390
---------------------------------------------------------------------
Dry-docking expenses (7) 1,329 782
---------------------------------------------------------------------
Management fees (8) 1,006 819
---------------------------------------------------------------------
General and
administrative expenses
(9) Adjusted 4,033 3,190
---------------------------------------------------------------------
Total vessel operating
expenses (10) Adjusted 10,675 9,181
---------------------------------------------------------------------
-------------------------------------------
Year Ended Year Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
FLEET DATA
---------------------------------------------------------------------
Average number of vessels
(1) 7.18 11.4
---------------------------------------------------------------------
Available days for fleet
(2) 2,550 4,074
---------------------------------------------------------------------
Calendar days for fleet
(3) 2,622 4,174
---------------------------------------------------------------------
Fleet utilization (4) 97% 98%
---------------------------------------------------------------------
AVERAGE DAILY RESULTS (Expressed in United States Dollars)
---------------------------------------------------------------------
Time charter equivalent
(5) 28,563 39,439
---------------------------------------------------------------------
Time charter equivalent
Adjusted (5) 25,260 32,920
---------------------------------------------------------------------
Vessel operating
expenses (6) 3,925 4,556
---------------------------------------------------------------------
Dry-docking expenses (7) 452 669
---------------------------------------------------------------------
Management fees (8) 792 847
---------------------------------------------------------------------
General and administrative
expenses (9) Adjusted 2,593 1,737
---------------------------------------------------------------------
Total vessel operating
expenses (10) Adjusted 7,761 7,809
---------------------------------------------------------------------
(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 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, dry-docks 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, dry-dockings 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.
For the time charter equivalent adjusted, other non-cash items
relating to the below market time charters attached to vessels
acquired which are amortized over the remaining period of the
time charter as an increase to net revenue have been excluded.
The Company excluded amortization of below market acquired time
charters because the Company believes that these non-cash items
do not reflect fairly the fleet operational results.
(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 dry-docking expenses is calculated by dividing dry-docking
expenses by fleet calendar days for the relevant time period.
(8) Daily management fees is calculated by dividing management fees by
fleet calendar days for the relevant time period.
(9) 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
amortization of the share based compensation cost for options and
restricted shares have been excluded.
(10) 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, dry-docking expenses, management
fees 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 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, 2007 December 31, 2008
---------------------------------------------------------------------
Time Charter Revenues 30,380,104 44,651,237
---------------------------------------------------------------------
Less Voyage Expenses (224,829) 12,563
---------------------------------------------------------------------
Less Commission (1,257,484) (2,350,660)
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses 28,897,791 42,313,140
---------------------------------------------------------------------
Total available days 819 1,075
---------------------------------------------------------------------
Time Charter Equivalent 35,284 39,361
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted Reconciliation
---------------------------------------------------------------------
Time Charter Revenues 30,380,104 44,651,237
---------------------------------------------------------------------
Less Voyage Expenses (224,829) 12,563
---------------------------------------------------------------------
Less Commission (1,257,484) (2,350,660)
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses 28,897,791 42,313,140
---------------------------------------------------------------------
Less Amortization of
Below Market Acquired
Time Charters (6,147,363) (5,308,086)
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses Adjusted 22,750,428 37,005,054
---------------------------------------------------------------------
Total available days 819 1,075
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted 27,778 34,423
---------------------------------------------------------------------
-------------------------------------------
Year Ended Year Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
Time Charter Revenues 76,657,595 169,301,675
---------------------------------------------------------------------
Less Voyage Expenses (348,452) (461,265)
---------------------------------------------------------------------
Less Commission (3,472,468) (8,164,029)
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses 72,836,675 160,676,381
---------------------------------------------------------------------
Total available days 2,550 4,074
---------------------------------------------------------------------
Time Charter Equivalent 28,563 39,439
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted Reconciliation
---------------------------------------------------------------------
Time Charter Revenues 76,657,595 169,301,675
---------------------------------------------------------------------
Less Voyage Expenses (348,452) (461,265)
---------------------------------------------------------------------
Less Commission (3,472,468) (8,164,029)
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses 72,836,675 160,676,381
---------------------------------------------------------------------
Less Amortization of
Below Market Acquired
Time Charters (8,423,492) (26,559,089)
---------------------------------------------------------------------
Total Revenue, net of
voyage expenses Adjusted 64,413,183 134,117,292
---------------------------------------------------------------------
Total available days 2,550 4,074
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted 25,260 32,920
---------------------------------------------------------------------
PARAGON SHIPPING INC.
Statement of Cash Flows
(Expressed in United States Dollars)
---------------------------------------------------------------------
Year Ended Year Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
Cash and cash equivalents,
beginning of year 32,331,848 31,328,637
---------------------------------------------------------------------
Provided by (used in):
---------------------------------------------------------------------
Operating Activities 42,769,314 83,474,314
---------------------------------------------------------------------
Investing Activities (426,493,679) (78,072,478)
---------------------------------------------------------------------
Financing Activities 382,721,154 31,711,279
---------------------------------------------------------------------
Net (decrease) / increase in
cash and cash equivalents (1,003,211) 37,113,115
---------------------------------------------------------------------
Cash and cash equivalents, end
of period 31,328,637 68,441,752
---------------------------------------------------------------------
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
-------------------------------------------
Fourth Quarter Ended Fourth Quarter Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
Net Income 7,749,512 9,955,122
---------------------------------------------------------------------
Plus Net Interest expense 3,623,723 3,970,224
---------------------------------------------------------------------
Plus Depreciation 6,593,579 8,742,360
---------------------------------------------------------------------
Plus Amortization -- --
---------------------------------------------------------------------
EBITDA 17,966,814 22,667,706
---------------------------------------------------------------------
Adjusted EBITDA
Reconciliation
---------------------------------------------------------------------
Net Income 7,749,512 9,955,122
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to
below market acquired
time charters (5,563,470) (4,613,062)
---------------------------------------------------------------------
Unrealized loss from
interest rate swap 1,028,161 8,535,229
---------------------------------------------------------------------
Non-cash expenses from
the amortization of
share based compensation
cost recognized 341,493 134,241
---------------------------------------------------------------------
Adjusted Net Income 3,555,696 14,011,530
---------------------------------------------------------------------
Plus Net Interest expense 3,623,723 3,970,224
---------------------------------------------------------------------
Plus Depreciation (2) 6,009,686 8,047,336
---------------------------------------------------------------------
Plus Amortization -- --
---------------------------------------------------------------------
Adjusted EBITDA 13,189,105 26,029,090
---------------------------------------------------------------------
-------------------------------------------
Year Ended Year Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
Net Income 4,903,736 69,229,461
---------------------------------------------------------------------
Plus Net Interest expense 9,331,667 13,969,098
---------------------------------------------------------------------
Plus Depreciation 17,204,304 32,874,632
---------------------------------------------------------------------
Plus Amortization -- --
---------------------------------------------------------------------
EBITDA 31,439,707 116,073,191
---------------------------------------------------------------------
Adjusted EBITDA
Reconciliation
---------------------------------------------------------------------
Net Income 4,903,736 69,229,461
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time
charters (7,711,816) (23,792,213)
---------------------------------------------------------------------
Unrealized loss from
interest rate swap 1,252,736 10,284,441
---------------------------------------------------------------------
Non-cash expenses from the
amortization of share
based compensation cost
recognized 20,212,149 522,662
---------------------------------------------------------------------
Adjusted Net Income 18,656,805 56,244,351
---------------------------------------------------------------------
Plus Net Interest expense 9,331,667 13,969,098
---------------------------------------------------------------------
Plus Depreciation (2) 16,450,525 30,107,757
---------------------------------------------------------------------
Plus Amortization -- --
---------------------------------------------------------------------
Adjusted EBITDA 44,438,997 100,321,206
---------------------------------------------------------------------
(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. The Company excluded non-cash items to derive the
adjusted net income and the adjusted EBITDA because the Company
believes that the non-cash items do not reflect fairly the fleet
operational results.
(2) Excludes a portion of depreciation charged on purchase price
adjustment allocated to vessel cost for vessel acquired with below
market charters.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information
(Expressed in United States Dollars)
---------------------------------------------------------------------
GAAP Financial Information Fourth Quarter Ended Fourth Quarter Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
Net Income 7,749,512 9,955,122
---------------------------------------------------------------------
Income allocable to Class
B common shares -- --
---------------------------------------------------------------------
Income available to Class
A common shares 7,749,512 9,955,122
---------------------------------------------------------------------
Weighted average number of
Class A common shares
basic 25,334,026 27,038,015
---------------------------------------------------------------------
Weighted average number of
Class A common shares
diluted 26,330,136 27,038,015
---------------------------------------------------------------------
Earnings per Class A
common shares basic 0.31 0.37
---------------------------------------------------------------------
Earnings per Class A
common shares diluted 0.29 0.37
---------------------------------------------------------------------
Reconciliation of Net
Income to Adjusted Net
Income
---------------------------------------------------------------------
Net Income 7,749,512 9,955,122
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time
charters (5,563,470) (4,613,062)
---------------------------------------------------------------------
Unrealized loss from
interest rate swap 1,028,161 8,535,229
---------------------------------------------------------------------
Non-cash expenses from
the amortization of
compensation cost
recognized 341,493 134,241
---------------------------------------------------------------------
Adjusted Net Income 3,555,696 14,011,530
---------------------------------------------------------------------
Weighted average number
of common shares basic 25,334,026 27,038,015
---------------------------------------------------------------------
Weighted average number
of common shares diluted 26,330,136 27,038,015
---------------------------------------------------------------------
Adjusted earnings per
share basic (1) 0.14 0.52
---------------------------------------------------------------------
Adjusted earnings per
share diluted (1) 0.14 0.52
---------------------------------------------------------------------
(1) Adjusted earnings per share is not an item recognized by GAAP and
should not be considered as an alternative to Earnings per share or
any other indicator of a Company's operating performance required
by GAAP. The Company excluded non-cash items to derive at the
adjusted net income and the adjusted earnings per share basic and
diluted because the Company believes that these non-cash items do
not reflect fairly the fleet operational results.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information
(Expressed in United States Dollars)
---------------------------------------------------------------------
GAAP Financial Information Year Ended Year Ended
December 31, 2007 December 31, 2008
---------------------------------------------------------------------
Net Income 4,903,736 69,229,461
---------------------------------------------------------------------
Income allocable to Class B
common shares 2,954,848 --
---------------------------------------------------------------------
Income available to Class A
common shares 1,948,888 69,229,461
---------------------------------------------------------------------
Weighted average number of
Class A common shares basic 16,495,980 26,819,923
---------------------------------------------------------------------
Weighted average number of
Class A common shares diluted 17,438,463 27,010,013
---------------------------------------------------------------------
Earnings per Class A common
shares basic 0.12 2.58
---------------------------------------------------------------------
Earnings per Class A common
shares diluted 0.11 2.56
---------------------------------------------------------------------
Reconciliation of Net Income
to Adjusted Net Income
---------------------------------------------------------------------
Net Income 4,903,736 69,229,461
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time charters (7,711,816) (23,792,213)
---------------------------------------------------------------------
Unrealized loss from interest
rate swap 1,252,736 10,284,441
---------------------------------------------------------------------
Non-cash expenses from the
amortization of compensation
cost recognized 20,212,149 522,662
---------------------------------------------------------------------
Adjusted Net Income 18,656,805 56,244,351
---------------------------------------------------------------------
Weighted average number of
common shares basic 16,495,980 26,819,923
---------------------------------------------------------------------
Weighted average number of
common shares diluted 17,438,463 27,010,013
---------------------------------------------------------------------
Adjusted earnings per share
basic (1) 1.13 2.10
---------------------------------------------------------------------
Adjusted earnings per share
diluted (1) 1.07 2.08
---------------------------------------------------------------------
(1) Adjusted earnings per share is not an item recognized by GAAP and
should not be considered as an alternative to Earnings per share or
any other indicator of a Company's operating performance required
by GAAP. The Company excluded non-cash items to derive at the
adjusted net income and the adjusted earnings per share basic and
diluted because the Company believes that these non-cash items do
not reflect fairly the fleet operational results.
Paragon Shipping Inc.
Unaudited Consolidated Balance Sheets
As of December 31, 2007 and 2008
(Expressed in United States Dollars)
--------------------------------------------------------------------
December 31, 2007 December 31, 2008
Assets
Current assets
Cash and cash equivalents 31,328,637 68,441,752
Trade receivables 354,154 372,965
Other receivables 287,546 1,209,230
Prepaid expenses 654,576 379,140
Due from management company -- 985,960
Inventories 801,373 885,665
--------------------------------------------------------------------
Total current assets 33,426,286 72,274,712
--------------------------------------------------------------------
Fixed assets
Vessels at cost 633,378,703 713,373,186
Less: accumulated
depreciation (18,268,064) (51,142,696)
--------------------------------------------------------------------
Total fixed assets 615,110,639 662,230,490
--------------------------------------------------------------------
Other assets 1,584,950 1,787,988
Restricted cash 8,010,000 6,010,000
Above market acquired time
charters -- 43,304
Other long-term receivables 1,340,602 74,760
--------------------------------------------------------------------
Total Assets 659,472,477 742,421,254
--------------------------------------------------------------------
Liabilities and Shareholders'
Equity
Current liabilities
Trade accounts payable
(including balance due to a
related party of $118,317
and $500 as of December 31,
2007 and 2008,
respectively) 2,487,291 2,538,796
Accrued expenses 5,494,431 4,098,929
Due to management company 1,642,805 --
Interest rate swap -- 6,407,751
Deferred income 3,176,938 3,024,423
Current portion of long-term
debt 9,000,000 53,150,000
--------------------------------------------------------------------
Total current liabilities 21,801,465 69,219,899
--------------------------------------------------------------------
Long-Term Liabilities
Long-term debt 309,000,000 334,335,000
Deferred income 586,499 703,863
Interest rate swap 1,370,701 5,247,391
Below market acquired time
charters 51,077,602 24,483,822
--------------------------------------------------------------------
Total long-term liabilities 362,034,802 364,770,076
--------------------------------------------------------------------
Total Liabilities 383,836,267 433,989,975
--------------------------------------------------------------------
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par
value; 25,000,000
authorized, none issued,
none outstanding at December
31, 2007 and December 31,
2008 -- --
Class A common shares, $0.001
par value; 120,000,000
authorized 25,744,983 issued
and outstanding at December
31, 2007 and 27,138,515
issued and outstanding at
December 31, 2008 25,745 27,139
Class B common shares, $0.001
par value; 5,000,000
authorized, none issued and
outstanding at December 31,
2007 and December 31, 2008 -- --
Additional paid-in capital 304,408,972 318,515,490
Accumulated deficit (28,798,507) (10,111,350)
--------------------------------------------------------------------
Total shareholders' equity 275,636,210 308,431,279
--------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity 659,472,477 742,421,254
--------------------------------------------------------------------
Paragon Shipping Inc.
Unaudited Consolidated Statement of Income
For the three months ended December 31, 2007 and 2008
(Expressed in United States Dollars)
--------------------------------------------------------------------
Three Months Ended Three Months Ended
December 31, 2007 December 31, 2008
Revenue
Time charter revenue
(including amortization of
below and above market
acquired time charters of
$6,147,363 and $5,308,086
for the three months ended
December 31, 2007 and
2008, respectively) 30,380,104 44,651,237
Less: commissions 1,257,484 2,350,660
--------------------------------------------------------------------
Net Revenue 29,122,620 42,300,577
--------------------------------------------------------------------
Expenses
Voyage expenses 224,829 (12,563)
Vessels operating expenses
(including expenses charged
by a related party of
$30,332 and $30,900 for
the three months ended
December 31, 2007 and
2008, respectively) 3,838,300 4,846,117
Dry-docking expenses 1,184,140 863,369
Management fees charged by a
related party 895,975 904,513
Depreciation 6,593,579 8,742,360
General and administrative
expenses (including share
based compensation of
$341,493 and $134,241 for
the three months ended
December 31, 2007 and 2008,
respectively)
3,934,612 3,655,761
--------------------------------------------------------------------
Operating Income 12,451,185 23,301,020
--------------------------------------------------------------------
Other Income (Expenses)
Interest and finance costs (4,017,986) (4,495,786)
Loss on interest rate swap (1,028,161) (8,770,233)
Interest income 394,263 525,562
Other income (541,101)
Foreign currency losses (49,789) (64,340)
--------------------------------------------------------------------
Total Other Expenses, net (4,701,673) (13,345,898)
--------------------------------------------------------------------
Net Income 7,749,512 9,955,122
Income allocable to Class B
common shares --
--------------------------------------------------------------------
Income available to Class A
common shares 7,749,512 9,955,122
====================================================================
Earnings per Class A common
share, basic $ 0.31 $ 0.37
Earnings per Class A common
share, diluted $ 0.29 $ 0.37
Weighted average number of
Class A common shares,
basic 25,334,026 27,038,015
Weighted average number of
Class A common shares,
diluted 26,330,136 27,038,015
Paragon Shipping Inc.
Unaudited Consolidated Statement of Income
As of December 31, 2007 and 2008
(Expressed in United States Dollars)
--------------------------------------------------------------------
Year Ended Year Ended
December 31, 2007 December 31, 2008
Revenue
Time charter revenue
(including amortization of
below and above market
acquired time charters of
$8,423,492 and $26,559,089
for the December 31, 2007
and 2008, respectively) 76,657,595 169,301,675
Less: commissions 3,472,468 8,164,029
--------------------------------------------------------------------
Net Revenue 73,185,127 161,137,646
--------------------------------------------------------------------
Expenses
Voyage expenses 348,452 461,265
Vessels operating expenses
(including expenses charged
by a related party of
$93,464 and $122,143 as of
December 31, 2007 and 2008,
respectively) 10,290,340 19,016,375
Dry-docking expenses 1,184,140 2,792,710
Management fees charged by a
related party 2,076,678 3,536,240
Depreciation 17,204,304 32,874,632
General and administrative
expenses (including share
based compensation of
$20,212,149 and $522,662 as
of December 31, 2007 and
2008 respectively 27,010,327 7,773,828
--------------------------------------------------------------------
Operating Income 15,070,886 94,682,596
--------------------------------------------------------------------
Other Income (Expenses)
Interest and finance costs (10,328,845) (15,840,197)
Loss on interest rate swap (1,252,736) (11,378,999)
Interest income 997,178 1,871,099
Gain from the change in fair
value of warrants 493,962 --
Foreign currency losses (76,709) (105,038)
--------------------------------------------------------------------
Total Other Expenses, net (10,167,150) (25,453,135)
--------------------------------------------------------------------
Net Income 4,903,736 69,229,461
Income allocable to Class B
common shares 2,954,848 --
--------------------------------------------------------------------
Income available to Class A
common shares 1,948,888 69,229,461
====================================================================
Earnings per Class A common
share, basic $ 0.12 $ 2.58
Earnings per Class A common
share, diluted $ 0.11 $ 2.56
Weighted average number of
Class A common shares,
basic 16,495,980 26,819,923
Weighted average number of
Class A common shares,
diluted 17,438,463 27,010,013
Paragon Shipping Inc.
Unaudited Consolidated Statement of Shareholders' Equity
As of December 31, 2007 and 2008
(Expressed in United States Dollars, except for number of shares)
--------------------------------------------------------------------
Class A Shares
------------------
Additional
Number of Par Paid-in Accumulated
Shares Value Capital deficit Total
--------------------------------------------------------------------
Balance
January 1,
2008 25,744,983 25,745 304,408,972 (28,798,507) 275,636,210
Issuance of
Class A
common
shares,
from the
exercise
warrants
and
options 1,369,532 1,370 13,583,880 13,585,250
Share based
compen-
sation 522,662 522,662
Issuance of
restricted
Class A
common
shares 30,000 30 (30) --
Cancel-
lation of
restricted
Class A
common
shares (6,000) (6) 6 --
Dividends
paid (50,542,304) (50,542,304)
Net Income 69,229,461 69,229,461
--------------------------------------------------------------------
Balance
December
31, 2008 27,138,515 27,139 318,515,490 (10,111,350) 308,431,279
--------------------------------------------------------------------
Paragon Shipping Inc.
Unaudited Consolidated Statement of Cash Flows
As of December 31, 2007 and 2008
(Expressed in United States Dollars)
--------------------------------------------------------------------
Year Ended Year Ended
December 31, 2007 December 31, 2008
Cash Flows from Operating
Activities
Net Income 4,903,736 69,229,461
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 17,204,304 32,874,632
Amortization of below and
above market acquired time
charters (8,423,492) (26,559,089)
Amortization of financing
costs 1,097,976 613,629
Share based compensation 20,212,149 522,662
Unrealized loss on interest
rate swap 1,252,736 10,284,441
Gain from the change in fair
value of warrants (493,962) --
Changes in assets and
liabilities
(Increase) in trade
receivables (354,154) (18,811)
(Decrease) / increase in
other receivables 588,991 (921,684)
(Increase)/Decrease in
prepaid expenses (654,576) 275,436
(Increase) in inventories (599,714) (84,292)
(Increase) in other assets (4,132) --
(Increase) in due from
management company -- (985,960)
(Increase) / decrease in
other long term receivables (1,340,602) 1,265,842
(Decrease)/Increase in trade
accounts payable 1,837,227 51,505
Increase / (decrease) in
accrued expenses 4,394,513 (1,395,502)
Decrease in due to management
company (99,067) (1,642,805)
Increase/(Decrease) in
deferred income 2,660,882 (152,515)
Increase in other long-term
payable 586,499 117,364
---------------------------------------------------------------------
Net cash from operating
activities 42,769,314 83,474,314
---------------------------------------------------------------------
Cash flow from / (used in)
investing activities
Acquisition of vessels and
capital expenditures (418,483,679) (80,072,478)
Restricted cash (8,010,000) 2,000,000
---------------------------------------------------------------------
Net cash used in investing
activities (426,493,679) (78,072,478)
---------------------------------------------------------------------
Cash flows from / (used in)
financing activities
Proceeds from long-term debt 348,812,500 111,500,000
Proceeds from short-term debt 289,336,091 --
Repayment of short-term debt (289,336,091) --
Repayment of long-term debt (108,250,000) (42,015,000)
Payment of financing costs (2,302,898) (816,667)
Proceeds from the issuance of
Class A common shares 181,960,710 --
Class A common shares
offering costs (12,862,836) --
Proceeds from the issuance of
Class A common shares from
the exercise of warrants and
options 6,600,000 13,585,250
Dividends paid (31,236,322) (50,542,304)
---------------------------------------------------------------------
Net cash from financing
activities 382,721,154 31,711,279
---------------------------------------------------------------------
Net (decrease) / increase in
cash and cash equivalents (1,003,211) 37,113,115
Cash and cash equivalents at
the beginning of the period 32,331,848 31,328,637
---------------------------------------------------------------------
Cash and cash equivalents at
the end of the period 31,328,637 68,441,752
---------------------------------------------------------------------
Supplemental disclosure of
cash flow information
Cash paid during the period
for interest 7,470,805 13,606,475