-- Net income of $2.2 million or $0.07 per share basic and diluted on
total net revenues of $17.2 million. Excluding the effect of unrealized
gain on derivatives, unrealized loss on trading securities and amortization
of the fair value of charters acquired, the net loss for the period would
have been $0.3 million, or $0.01 loss per share basic and diluted.
-- Adjusted EBITDA was $5.0 million. Please refer to a subsequent section
of this Press Release for a reconciliation of adjusted EBITDA to net
income.
-- An average of 16.79 vessels were owned and operated during the third
quarter of 2009 earning an average time charter equivalent rate of $15,101
per day.
-- Declared a quarterly dividend of $0.05 per share for the third quarter
of 2009 payable on December 18, 2009 to shareholders of record on December
11, 2009. This is the seventeenth consecutive quarterly dividend declared.
First Nine Months 2009 Highlights:
-- Net income of $0.7 million or $0.02 per share basic and diluted on
total net revenues of $47.3 million. Excluding the effect of unrealized
loss on derivatives, unrealized gain on trading securities and amortization
of the fair value of charters acquired, the net income for the period would
have been $2.1 million, or $0.07 per share basic and diluted.
-- Adjusted EBITDA was $17.0 million. Please refer to a subsequent
section of this Press Release for a reconciliation of adjusted EBITDA to
net income.
-- An average of 16.17 vessels were owned and operated during the first
nine months of 2009 earning an average time charter equivalent rate of
$13,632 per day.
-- Declared three quarterly dividends for a total of $0.25 per share
during the first nine months of 2009.
Aristides Pittas, Chairman and CEO of Euroseas, commented: "During the
third quarter of 2009 we took delivery of our third drybulk vessel for the
year, The vessel came with a t/c attached at $25,200/day for 6 months and
we subsequently re-chartered it for a further two years at $17,500 thus
improving our earnings visibility. At the same time, we have been able to
recharter all the containerships coming out of charter for varying firm
periods of a few months to a year, albeit at rates slightly below operating
costs. As a result our current charter coverage for 2010 is about 47%,
without including optional periods, broken down as about 80% for our
bulkers fleet and 29% for our containership fleet. Whilst we are skeptical
about the outlook of the drybulk market for 2010 (hence our high charter
coverage) we believe the container market has reached the bottom where it
may stay for a while but eventually can only move upwards. Especially for
vessels under 2000 teu, like ours, we expect the recovery to come sooner
than for the larger vessels.
"We intend to continue taking advantage of low vessel prices in any sector
we can find them to further renew and expand our fleet. As the
opportunities we see emerging seem very attractive, we have decided to
preserve cash for future investments and decrease our dividend towards the
lowest level of the range the Board considers satisfactory. Thus, our Board
elected to declare a dividend of $0.05/share which still yields about 5%
p.a. based on the recent levels of our stock price."
Tasos Aslidis, Chief Financial Officer of Euroseas, commented: "The results
of the third quarter of 2009, as expected, reflect the lower level of the
charter markets compared to the same period a year ago. Our results were
positively influenced by non-cash gains mainly on FFA contracts despite
some non-cash losses on interest rate swaps.
"Total daily vessel operating expenses, including management fees and
general and administrative expenses, during the third quarter of 2009
reflect a decrease about 25% on a per vessel per day basis compared to the
third quarter of 2008. Part of this decrease (about 11%) is due to the fact
that three of our vessels were laid-up during the third quarter of 2009
and thus incurred significantly lower daily costs, but a significant part
(about 14%) is associated with cost reductions. As always, cost control
remains a key component of our strategy.
"As of September 30, 2009, our net debt position was about $26.4 million
with our outstanding debt at $79.1 million versus restricted and
unrestricted cash of about $52.7 million. We continue to enjoy our bankers'
support and have been able to finance all three of our vessel purchases
this year with about 50% debt."
Third Quarter 2009 Results:
For the third quarter of 2009, the Company reported total net revenues of
$17.2 million representing a 51.6% decrease over total net revenues of
$35.5 million during the third quarter of 2008. The Company reported net
income for the period of $2.2 million as compared to net income of $14.5
million for the third quarter of 2008. The results for the third quarter of
2009 include a $2.0 million net unrealized gain on derivatives and trading
securities as compared to $1.1 million unrealized loss on derivatives and
trading securities for the same period of 2008. Depreciation expenses for
the third quarter of 2009 were $5.1 million compared to $7.8 million during
the same period of 2008. The decline was due to a change in estimates (see
below) and the sale of M/V Nikolaos P and M/V Ioanna P, which contributed
$2.0 million to the depreciation expenses in the third quarter of 2008,
partly balanced by the depreciation of three vessels purchased in 2009. On
average, 16.79 vessels were owned and operated during the third quarter of
2009 earning an average time charter equivalent rate of $15,101 per day
compared to 16 vessels in the same period of 2008 earning on average
$25,951 per day. Three of the Company's containerships were laid-up
throughout the third quarter of 2009.
Adjusted EBITDA for the third quarter of 2009 was $5.0 million, a 76.3%
decrease from $21.2 million achieved during the third quarter of 2008.
Please see below for Adjusted EBITDA reconciliation to net income and cash
flow provided by operating activities.
Basic and diluted earnings per share for the third quarter of 2009 was
$0.07, calculated on 30,628,410 and 30,700,820, respectively weighted
average number of shares outstanding, respectively, compared to basic and
diluted earnings per share of $0.47 for the third quarter of 2008,
calculated on 30,476,135 and 30,551,315 weighted average number of shares
outstanding, respectively.
Excluding the effect on the earnings for the quarter of the unrealized gain
on derivatives, unrealized loss on trading securities and amortization of
the fair value of time charter contracts acquired, the loss per share for
the quarter ended September 30, 2009 would have been $0.01 per share basic
and diluted, and for the quarter ended September 30, 2008 the earnings
would have been $0.47 per share basic and diluted. Usually, security
analysts do not include the above items in their published estimates of
earnings per share.
First nine months 2009 Results:
For the first nine months of 2009, the Company reported total net revenues
of $47.3 million representing a 53.9% decrease over total net revenues of
$102.7 million during the first nine months of 2008. The Company reported
net income for the period of $0.7 million as compared to net income of
$43.7 million for the first nine months of 2008. The results for the first
nine months of 2009 include a $2.5 million net unrealized loss on
derivatives and trading securities as compared to a $0.7 million unrealized
loss on derivatives and trading securities for the same period of 2008.
Depreciation expenses for the first nine months of 2009 were $14.4 million
compared to $22.6 million during the same period of 2008. The decline was
due to a change in estimates (see below) and the sale of M/V Nikolaos P and
M/V Ioanna P, which contributed $6.0 million to the depreciation expenses
in the first nine months of 2008, partly balanced by the depreciation of
three of the vessels purchased in 2009 that contributed to the depreciation
expense for the first nine months. On average, 16.17 vessels were owned and
operated during the first nine months of 2009 earning an average time
charter equivalent rate of $13,632 per day compared to 15.48 vessels in the
same period of 2008 earning on average $25,868 per day. One of the
Company's vessels was laid-up during the entire first nine months of 2009
and two more vessels were laid up for the second and third quarter of 2009.
Adjusted EBITDA for the first nine months of 2009 was $17.0 million, a
71.9% decrease from $60.6 million achieved during the first nine months of
2008. Please see below for Adjusted EBITDA reconciliation to net income and
cash flow provided by operating activities.
Basic and diluted earnings per share for the first nine months of 2009 was
$0.02, calculated on 30,593,401 basic and 30,642,954 diluted weighted
average number of shares outstanding, respectively, compared to basic and
diluted earnings per share of $1.44 and $1.43 per share, respectively, for
the first nine months of 2008, calculated on 30,409,078 and 30,555,095
weighted average number of shares outstanding, respectively.
Excluding the effect on the earnings for the first nine months of 2009 of
the unrealized loss on derivatives, unrealized gain on trading securities
and amortization of the fair value of time charter contracts acquired, the
earnings per share for the nine-month period ended September 30, 2009 would
have been $0.07 per share basic and diluted, and, for the same period in
2008, would have been $1.27 and $1.26 per share basic and diluted,
respectively. Usually, security analysts do not include the above items in
their published estimates of earnings per share.
Change in accounting principle and change in estimates:
Beginning with the first quarter of 2009, the Company changed its
accounting policy of drydocking costs from the deferral method, under which
the Company amortized drydocking costs over the estimated period of benefit
between drydockings, 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 three month and
for the nine month periods ended September 30, 2008 decreased by $0.9 and
$2.5 million, respectively, or, $0.03 and $0.08 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 increased net income for the three and nine month
periods ended September 30, 2009 by $1.6 and $4.8 million, respectively, or
$0.05 and $0.16 per share, respectively, basic and diluted.
Fleet Profile: The Euroseas Ltd. fleet profile is as follows:
Year TCE
Name Type Dwt TEU Built Employment Rate($/day)
----------- -------- ----- ------ ---------- -------------
Dry Bulk Vessels
----------- -------- ----- ------ ---------- -------------
TC 'til
Dec-09
Then until $25,200
PANTELIS Panamax 74,020 2000 Nov. 2011 $17,500
----------- -------- ----- ------ ---------- -------------
TC 'til
ELENI P Panamax 72,119 1997 May-10 $15,350
----------- -------- ----- ------ ---------- -------------
Baumarine
IRINI (*) Panamax 69,734 1988 Pool
----------- -------- ----- ------ ---------- -------------
TC 'til
ARISTIDES N.P. Panamax 69,268 1993 Jan-10 $12,350
----------- -------- ----- ------ ---------- -------------
Bulkhandling
MONICA P (**) Handymax 46,667 1998 Pool
----------- -------- ----- ------ ---------- -------------
GREGOS Handysize 38,691 1984 Spot
----------- -------- ----- ------ ---------- -------------
Total Dry Bulk
Vessels 6 370,499
----------- -------- ----- ------ ---------- -------------
Multipurpose
Dry Cargo
Vessels
----------- -------- ----- ------ ---------- -------------
$9,500 'til
Dec-10,
TC 'til $9,000 'til
TASMAN TRADER 1 22,568 950 1990 Mar-12 Mar-12
----------- -------- ----- ------ ---------- -------------
Container
Carriers
----------- -------- ----- ------ ---------- -------------
$16,800 'til
Aug-11
TC 'til $18,735 'til
Aug-11 Aug-12
(3 annual $19,240 'til
options Aug-13
MAERSK NOUMEA Intermediate 34,677 2,556 2001 'til $19,750 'til
Aug-14) Aug-14
----------- -------- ----- ------ ---------- -------------
TC 'til
TIGER BRIDGE Intermediate 31,627 2,228 1990 Mar-10 $7,500
----------- -------- ----- ------ ---------- -------------
ARTEMIS Intermediate 29,693 2,098 1987 Laid-up
----------- -------- ----- ------ ---------- -------------
DESPINA P Handy size 33,667 1,932 1990 Laid-up
----------- -------- ----- ------ ---------- -------------
JONATHAN P
(ex-OEL
INTEGRITY) Handy size 33,667 1,932 1990 Laid-up
----------- -------- ----- ------ ---------- -------------
TC Til
Nov-09
(3 monthly
CAPTAIN COSTAS options
(ex-OEL til
TRANSWORLD) Handy size 30,007 1,742 1992 Feb-10) $4,000
----------- -------- ----- ------ ---------- -------------
TC 'til
YM PORT KLANG Nov-10 $3,750 'til
(ex-MASTRO (option Nov-10
NICOS, ex- 'til ($5,900 'til
YM XINGANG I) Handy size 23,596 1,599 1993 Nov-11) Nov-11)
----------- -------- ----- ------ ---------- -------------
$3,850 'til
TC 'til Jan-10
Jan-10 $4,000 'til
(option til Jun-10
Jun-10) CONTEX
(option til less 10% 'til
MANOLIS P Handy size 20,346 1,452 1995 Jun-11) Jun-11
----------- -------- ----- ------ ---------- -------------
NINOS (ex-YM
QINGDAO I) Feeder 18,253 1,169 1990 Jan-10 $3,900
----------- -------- ----- ------ ---------- -------------
TC 'til
Dec-09
(option 'til
KUO HSIUNG Feeder 18,154 1,169 1993 Jun-10) $3,850
----------- -------- ----- ------ ---------- -------------
Total
Container
Carriers 10 273,687 17,877
----------- -------- ----- ------ ---------- -------------
Fleet Grand
Total 17 666,754 18,827
----------- -------- ----- ------ ---------- -------------
Note: TC denotes time charter. All dates listed are the earliest redelivery
dates under each TC. All extension option are in favour 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.
New charter arrangements:
"YM Port Klang" (ex-"Mastro Nicos," ex-"YM Xingang I") entered into an
approximately one year time charter agreement at a gross daily rate of
$3,750 per day. The charterer has the option to extend the charter for one
additional year at a gross daily rate of $5,900 per day. Upon delivery to
new charterers the vessel was renamed "YM Port Klang."
"Manolis P" entered into a time charter agreement ranging from a three to
six month period at a gross daily rate of $3,850 per day with an option of
the charterer to extend it for another five to seven months at a gross
daily rate of $4,000 per day and upon completion of that optional period
the charterer has another option to further extend the charter for one more
year at a rate based on the 1,700 teu Container Index (CONTEX) minus 10%.
"Ninos" was re-delivered early from its previous charter and was chartered
at the rate shown.
Approximately 80% of Euroseas' total fleet days for the remaining days of
2009 and approximately 47% in 2010 are secured under period charters or
Forward Freight Agreements (FFAs) not including the extension options held
by charterers.
Summary Fleet Data:
3 months, 3 months, 9 months, 9 months,
ended ended ended ended
September September September September
30, 2008 30, 2009 30, 2008 30, 2009
--------- --------- --------- ---------
FLEET DATA
Average number of vessels (1) 16.00 16.79 15.48 16.17
Calendar days for fleet (2) 1,472.0 1,545.0 4,242.0 4,414.0
Scheduled off-hire days incl.
laid-up (3) 40.1 331.5 138.9 704.5
Available days for fleet (4) =
(2) - (3) 1,431.9 1,213.5 4,103.1 3,709.5
Commercial off-hire days (5) 0.0 43.7 7.7 156.1
Operational off-hire days (6) 29.3 1.9 46.6 23.2
Voyage days for fleet (7) = (4)
- (5) - (6) 1,402.6 1,167.9 4,048.8 3,530.2
Fleet utilization (8) = (7) /
(4) 98.0% 96.2% 98.7% 95.2%
Fleet utilization, commercial
(9) = ((4) - (5)) / (4) 100.0% 96.4% 99.8% 95.8%
Fleet utilization, operational
(10) = ((4) - (6)) / (4) 98.0% 99.8% 98.9% 99.4%
AVERAGE DAILY RESULTS
Time charter equivalent rate
(11) 25,951 15,101 25,868 13,632
Vessel operating expenses excl.
drydocking expenses (12) 5,674 4,251 5,770 4,790
General and administrative
expenses (13) 671 504 774 645
Total vessel operating expenses
excl. dd expenses (14) 6,345 4,755 6,544 5,435
Drydocking expenses (15) 1,316 1,238 1,229 433
--------- --------- --------- ---------
(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
available days for the relevant time period. Voyage expenses primarily
consist of port, canal and fuel costs that are unique to a particular
voyage, which would otherwise be paid by the charterer under a time charter
contract, as well as commissions. TCE is a standard shipping industry
performance measure used primarily to compare period-to-period changes in a
shipping company's performance despite changes in the mix of charter types
(i.e., spot voyage charters, time charters and bareboat charters) under
which the vessels may be employed between the periods.
(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 have 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:
Today, Monday, November 16, 2009 at 11:00 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."
In case of any problems with the above numbers, please dial 1 866 223 0615
(from the US), 0800 694 1503 (from the UK) or +44 (0)1452 586 513
(international standard dial in). Quote "Euroseas."
A recording of the conference call will be available until November 23,
2009 by dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK)
or +44 (0)1452 550 000 (international standard dial in). Access Code:
6973591#
Audio -- Slides Presentation:
There will be a live and then archived audio webcast of the conference
call, via the internet through the Euroseas website (www.euroseas.gr).
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast. A slide
presentation on the third quarter and first nine months 2009 results in PDF
format will also be available 30 minutes prior to the conference call and
webcast accessible on the company's website (www.euroseas.gr) on the
webcast page. Participants to the webcast can download the PDF
presentation.
Euroseas Ltd.
Consolidated Condensed Statements of Income
(All amounts expressed in U.S. Dollars - except share amounts)
Nine Months Nine Months Nine Months
Ended Ended Ended
September September September
30, 30, 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 107,564,775 107,564,775 49,098,531
Commissions (4,827,793) (4,827,793) (1,774,961)
Net revenues 102,736,982 102,736,982 47,323,570
Operating expenses
Voyage expenses 2,829,862 2,829,862 975,038
Vessel operating expenses 20,352,597 20,352,597 17,435,904
Drydocking expenses - 5,212,057 1,912,474
Amortization and depreciation 25,344,198 22,604,142 14,390,828
Management fees 4,121,655 4,121,655 3,707,350
Other general and administrative
expenses 3,285,175 3,285,175 2,848,467
Charter termination fees - - (103,577)
Total operating expenses 55,933,487 58,405,488 41,166,484
Operating income 46,803,495 44,331,494 6,157,086
Other income/(expenses)
Interest and finance cost (2,311,660) (2,311,660) (1,028,217)
Change in fair value of derivatives (110,206) (110,206) (5,950,582)
Realized & unrealized gain / (loss)
on trading securities (834,767) (834,767) 521,870
Foreign exchange (loss) gain (16,276) (16,276) 23,902
Interest income 2,385,342 2,385,342 952,512
Dividend income 273,756 273,756 -
Other expenses, net (613,811) (613,811) (5,480,515)
----------- ----------- -----------
Net income 46,189,684 43,717,683 676,571
----------- ----------- -----------
Earnings per share, basic 1.52 1.44 0.02
Weighted average number of shares,
basic 30,409,078 30,409,078 30,593,401
----------- ----------- -----------
Earnings per share, diluted 1.51 1.43 0.02
----------- ----------- -----------
Weighted average number of shares,
diluted 30,555,095 30,555,095 30,642,954
----------- ----------- -----------
Three Months Three Months Three Months
Ended Ended Ended
September September September
30, 30, 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 37,111,568 37,111,568 17,753,656
Commissions (1,660,638) (1,660,638) (586,301)
Net revenues 35,450,930 35,450,930 17,167,355
Operating expenses
Voyage expenses 712,403 712,403 117,462
Vessel operating expenses 6,944,686 6,944,686 5,235,285
Drydocking expenses - 1,937,341 1,912,474
Amortization and depreciation 8,887,717 7,816,294 5,106,899
Management fees 1,407,120 1,407,120 1,332,991
Other general and administrative
expenses 987,746 987,746 777,609
Total operating expenses 18,939,672 19,805,590 14,482,720
Operating income 16,511,258 15,645,340 2,684,635
Other income/(expenses)
Interest and finance cost (610,924) (610,924) (339,764)
Change in fair value of derivatives (110,206) (110,206) (171,634)
Realized and unrealized loss on
trading securities (1,091,462) (1,091,462) (138,835)
Foreign exchange loss (2,894) (2,894) (945)
Interest income 525,123 525,123 144,430
Dividend income 98,756 98,756 -
Other expenses, net (1,191,607) (1,191,607) (506,748)
----------- ----------- -----------
Net income 15,319,652 14,453,733 2,177,887
----------- ----------- -----------
Earnings per share, basic 0.50 0.47 0.07
Weighted average number of shares,
basic 30,476,135 30,476,135 30,628,410
----------- ----------- -----------
Earnings per share, diluted 0.50 0.47 0.07
----------- ----------- -----------
Weighted average number of shares,
diluted 30,551,315 30,551,315 30,700,820
----------- ----------- -----------
Euroseas Ltd.
Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars - except share amounts)
December 31, December 31, September 30,
2008 2008 2009
(as originally (as 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 42,725,914
Trade accounts receivable 1,233,895 1,233,895 1,518,975
Other receivables, net 1,439,628 1,439,628 727,574
Due from related company 4,678,750 4,678,750 5,926,177
Inventories 2,011,973 2,011,973 2,137,895
Restricted cash 2,181,264 2,181,264 3,440,758
Vessels held for sale 6,067,020 6,067,020 -
Trading securities 771,727 771,727 552,349
Derivatives 61,670 61,670 69,606
Prepaid expenses 241,102 241,102 388,711
Total current assets 92,538,220 92,538,220 57,487,959
Fixed assets:
Vessels, net 231,963,606 231,963,606 281,619,215
Advances for vessel acquisition 1,821,798 1,821,798 -
Long-term assets:
Restricted cash 4,800,000 4,800,000 6,518,295
Deferred charges, net 7,771,342 373,702 365,781
Derivatives 68,038 68,038 276,986
Fair value of above market time
charter acquired 1,653,422 1,653,422 -
Total long-term assets 248,078,206 240,680,566 288,780,277
------------ ------------ ------------
Total assets 340,616,426 333,218,786 346,268,236
------------ ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt, current portion 12,450,000 12,450,000 13,550,000
Trade accounts payable 2,283,488 2,283,488 2,760,063
Accrued expenses 1,206,466 1,206,466 1,447,799
Accrued dividends 116,750 116,750 62,500
Deferred revenue 4,533,601 4,533,601 1,322,413
Derivatives 827,210 827,210 5,152,583
Total current liabilities 21,417,515 21,417,515 24,295,358
Long-term liabilities:
Long term debt, net of current
portion 43,565,000 43,565,000 65,540,000
Derivatives 2,700,028 2,700,028 1,231,561
Fair value of below market time
charter acquired 8,704,811 8,704,811 5,958,438
Total long-term liabilities 54,969,839 54,969,839 72,729,999
Total liabilities 76,387,354 76,387,354 97,025,357
Shareholders' equity:
Common stock (par value $0.03,
100,000,000 shares authorized,
30,575,611 and 30,779,711 issued
and outstanding)
Preferred shares (par value
$0.01, 20,000,000 shares
authorized, no shares issued and
outstanding) 917,269 917,269 923,392
Additional paid-in capital 234,567,670 234,567,670 235,521,957
Retained earnings 28,744,133 21,346,493 12,797,530
Total shareholders' equity 264,229,072 256,831,432 249,242,879
------------ ------------ ------------
Total liabilities and shareholders'
equity 340,616,426 333,218,786 346,268,236
------------ ------------ ------------
Euroseas Ltd.
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
Nine Months Nine Months Nine Months
Ended Ended Ended
September September September
30, 30, 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
----------- ----------- -----------
Cash flows from operating
activities:
Net income 46,189,684 43,717,683 676,571
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation of vessels 22,604,142 22,604,142 14,390,828
Amortization of deferred charges 2,804,537 64,481 72,417
Amortization of fair value of time
charters (5,804,512) (5,804,512) (1,092,951)
Share-based compensation 1,392,823 1,392,823 709,714
Unrealized loss on derivatives, net 110,206 110,206 2,640,022
Purchase of trading securities (922,656) (922,656) -
Sale of trading securities 860,611 860,611 741,248
Realized gain on trading securities - - (411,444)
Unrealized loss / (gain) on trading
securities 834,768 834,768 (110,426)
Changes in operating assets and
liabilities (7,476,078) (2,264,021) (6,120,457)
----------- ----------- -----------
Net cash provided by operating
activities 60,593,525 60,593,525 11,495,522
----------- ----------- -----------
Cash flows from investing
activities:
Purchase of vessels including
improvements (43,582,320) (43,582,320) (62,224,639)
Change in restricted cash (919,902) (919,902) (613,129)
Proceeds from sale of vessels - - 5,980,487
----------- ----------- -----------
Net cash (used in) investing
activities (44,502,222) (44,502,222) (56,857,281)
----------- ----------- -----------
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 (28,370,052) (28,370,052) (9,279,783)
Offering expenses paid (110,340) (110,340) -
Loan arrangements fees paid - - (208,000)
Proceeds from long-term debt - - 33,000,000
Repayment of long-term debt (19,260,000) (19,260,000) (9,925,000)
----------- ----------- -----------
Net cash provided by (used in)
financing activities (45,929,470) (45,929,470) 14,236,482
----------- ----------- -----------
Net decrease in cash and cash
equivalents (29,838,167) (29,838,167) (31,125,277)
Cash and cash equivalents at
beginning of period 104,135,320 104,135,320 73,851,191
----------- ----------- -----------
Cash and cash equivalents at end of
period 74,297,153 74,297,153 42,725,914
----------- ----------- -----------
Euroseas Ltd.
Reconciliation of Adjusted EBITDA to
Net Income and Cash Flow Provided By Operating Activities
(All amounts expressed in U.S. Dollars)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
------------ ------------ ------------
Net income 15,319,652 14,453,733 2,177,887
------------ ------------ ------------
Interest and finance costs, net
(incl. interest income) 85,801 85,801 195,334
------------ ------------ ------------
Depreciation and amortization 8,887,717 7,816,294 5,106,899
------------ ------------ ------------
Loss / (Gain) on derivatives, net 110,206 110,206 (1,965,954)
------------ ------------ ------------
Amortization of deferred revenue
of below market time charter
acquired (2,025,674) (2,025,674) (669,136)
------------ ------------ ------------
Amortization of deferred revenue
of above market time charter
acquired 737,773 737,773 177,876
------------ ------------ ------------
Adjusted EBITDA 23,115,475 21,178,133 5,022,906
============ ============ ============
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
Net cash flow provided by operating
activities 20,638,993 20,638,993 4,522,485
----------- ----------- -----------
Changes in operating assets /
liabilities 3,673,539 1,736,197 446,942
----------- ----------- -----------
Loss on interest rate derivatives
(realized) - - 180,499
----------- ----------- -----------
Loss on trading securities, net (1,091,463) (1,091,463) (138,835)
----------- ----------- -----------
Investment in trading securities,
net 344,691 344,691 -
----------- ----------- -----------
Share-based compensation (515,425) (515,425) (157,713)
----------- ----------- -----------
Interest, net 65,140 65,140 169,528
----------- ----------- -----------
Adjusted EBITDA 23,115,475 21,178,133 5,022,906
=========== =========== ===========
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
------------ ------------ ------------
Net income 46,189,684 43,717,683 676,571
------------ ------------ ------------
Interest and finance costs, net
(incl. interest income) (73,682) (73,682) 75,705
------------ ------------ ------------
Depreciation and amortization 25,344,198 22,604,142 14,390,828
------------ ------------ ------------
Loss on derivatives, net 110,206 110,206 2,945,080
------------ ------------ ------------
Amortization of deferred revenue
of below market time charter
acquired (8,017,831) (8,017,831) (2,746,373)
------------ ------------ ------------
Amortization of deferred revenue
of above market time charter
acquired 2,213,319 2,213,319 1,653,422
------------ ------------ ------------
Adjusted EBITDA 65,765,894 60,553,837 16,995,233
============ ============ ============
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
----------- ----------- -----------
Net cash flow provided by operating
activities 60,593,525 60,593,525 11,495,522
----------- ----------- -----------
Changes in operating assets /
liabilities 7,476,078 2,264,021 6,120,457
----------- ----------- -----------
Loss on interest rate derivatives
(realized) - - 305,058
----------- ----------- -----------
Gain/ (loss) on trading securities,
net (834,768) (834,768) 521,870
----------- ----------- -----------
Investment in trading securities,
net 62,045 62,045 (741,248)
----------- ----------- -----------
Share-based compensation (1,392,823) (1,392,823) (709,714)
----------- ----------- -----------
Interest, net (138,163) (138,163) 3,288
----------- ----------- -----------
Adjusted EBITDA 65,765,894 60,553,837 16,995,233
=========== =========== ===========
EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings before
interest, income taxes, depreciation, amortization, (gain)/loss in
derivatives and amortization of deferred revenues from above or below
market time charters acquired. Adjusted EBITDA does not represent and
should not be considered as an alternative to net income or cash flow from
operations, as determined by United States generally accepted accounting
principles, or U.S. GAAP, and our calculation of Adjusted EBITDA may not be
comparable to that reported by other companies. Adjusted EBITDA is included
herein because it is a basis upon which we assess our financial performance
and liquidity position and because we believe that it presents useful
information to investors regarding a company's ability to service and/or
incur indebtedness. The Company's definition of Adjusted EBITDA may not be
the same as that used by other companies in the shipping or other
industries.
Euroseas Ltd.
Reconciliation of Net Income Excluding the Effect from Unrealized Loss /
(Gain) on derivatives, Unrealized Loss / (Gain) on trading securities,
Amortization of the
Fair Value of Charters Acquired to Net Income
(All amounts expressed in U.S. Dollars - except share data and per share
amounts)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
------------- ------------- -------------
Net income 15,319,652 14,453,733 2,177,887
------------- ------------- -------------
Unrealized loss (gain) on
derivatives, net 110,206 110,206 (2,146,453)
------------- ------------- -------------
Unrealized loss on trading
securities 992,706 992,706 138,835
------------- ------------- -------------
Amortization of deferred
revenue of below market time
charter acquired (2,025,673) (2,025,673) (669,136)
------------- ------------- -------------
Amortization of deferred
revenue of above market time
charter acquired 737,773 737,773 177,876
------------- ------------- -------------
Net Income / (loss) excluding
unrealized loss / (gain) on
derivatives, unrealized loss
on trading securities,
amortization of the fair
value of charters acquired 15,134,664 14,268,745 (320,991)
------------- ------------- -------------
Net Income (loss) per share
excluding unrealized loss /
(gain) on derivatives,
unrealized loss on trading
securities, amortization of
the fair value of charters
acquired basic 0.50 0.47 (0.01)
------------- ------------- -------------
Weighted average number of
shares, basic 30,476,135 30,476,135 30,628,410
------------- ------------- -------------
Net Income (loss) per share
excluding unrealized loss /
(gain) on derivatives,
unrealized loss on trading
securities, amortization of
the fair value of charters
acquired, diluted 0.50 0.47 (0.01)
------------- ------------- -------------
Weighted average number of
shares, diluted 30,551,315 30,551,315 30,628,410
============= ============= =============
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2008 2009
(as originally (as adjusted
reported under the
under the direct
deferral expense
method) method)
------------- ------------- ------------
Net income 46,189,684 43,717,683 676,571
------------- ------------- -------------
Unrealized loss on derivatives 110,206 110,206 2,640,022
------------- ------------- -------------
Unrealized loss (gain) on
trading securities 561,011 561,011 (110,426)
------------- ------------- -------------
Amortization of deferred
revenue of below market time
charter acquired (8,017,831) (8,017,831) (2,746,373)
------------- ------------- -------------
Amortization of deferred
revenue of above market time
charter acquired 2,213,319 2,213,319 1,653,422
------------- ------------- -------------
Net Income excluding unrealized
loss on derivatives, unrealized
loss/(gain) on trading
securities, amortization of
the fair value of charters
acquired 41,056,389 38,584,388 2,113,216
------------- ------------- -------------
Net Income per share excluding
unrealized loss on derivatives,
unrealized loss / (gain) on
trading securities, amortization
of the fair value of charters
acquired, basic 1.35 1.27 0.07
------------- ------------- -------------
Weighted average number of
shares, basic 30,409,078 30,409,078 30,593,401
------------- ------------- -------------
Net Income per share excluding
unrealized loss on derivatives,
unrealized loss / (gain) on
trading securities, amortization
of the fair value of charters
acquired, diluted 1.34 1.26 0.07
------------- ------------- -------------
Weighted average number of
shares, diluted 30,555,095 30,555,095 30,642,954
============= ============= =============
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 17 vessels, including 4 Panamax drybulk
carriers, 1 Handymax and 1 Handysize drybulk carriers, 3 Intermediate
container ships, 5 Handysize container ships, 2 Feeder container ships and
a multipurpose dry cargo vessel. Euroseas 6 drybulk carriers have a total
cargo capacity of 370,499 dwt, its 10 container ships have a cargo capacity
of 17,877 teu and its 1 multipurpose vessel has a cargo capacity of 22,568
dwt or 950 teu.
Forward Looking Statement
This press release contains forward-looking statements (as defined in
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended) concerning future events
and the Company's growth strategy and measures to implement such strategy;
including expected vessel acquisitions and entering into further time
charters. Words such as "expects," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates," and variations of such words and
similar expressions are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. These statements involve
known and unknown risks and are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. Actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to changes in the demand for
dry bulk vessels and container ships, competitive factors in the market in
which the Company operates; risks associated with operations outside the
United States; and other factors listed from time to time in the Company's
filings with the Securities and Exchange Commission. The Company expressly
disclaims any obligations or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any
change in the Company's expectations with respect thereto or any change in
events, conditions or circumstances on which any statement is based.
Visit our website www.euroseas.gr
Contact Information: Company Contact Tasos Aslidis Chief Financial Officer Euroseas Ltd. 11 Canterbury Lane, Watchung, NJ 07069 Tel. (908) 301-9091 E-mail: aha@euroseas.gr Investor Relations / Financial Media Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: nbornozis@capitallink.com