-- Net loss of $22.6 million or $0.74 per share basic and diluted on
total net revenues of $24.3 million. The results include a $25.1 million
impairment loss on fixed assets. Excluding the effect on the earnings for
the quarter of the impairment loss as well as the effect from the loss on
derivatives and investments and the amortization of the fair value of time
charter contracts acquired, the earnings per share for the quarter ended
December 31, 2008 would have been $7.0 million or $0.23 per share basic and
diluted.
-- Adjusted EBITDA was $13.1 million. Please refer to a subsequent
section of the Press Release for a reconciliation of adjusted EBITDA to net
income.
-- An average of 16 vessels were operated during the fourth quarter of
2008 earning an average time charter equivalent rate of $17,971 per day.
-- Declared a quarterly dividend of $0.10 per share for the fourth
quarter of 2008 payable on March 20, 2009 to shareholders of record on
March 12, 2009. This is the fourteenth consecutive quarterly dividend
declared.
Full Year 2008 Highlights:
-- Net income of $23.6 million or $0.78 per share basic and $0.77 per
share diluted on total net revenues of $127.1 million. The results include
a $25.1 million impairment loss on fixed assets. Excluding the effect on
the earnings for the year of the impairment loss as well as the effect from
the loss on derivatives and investments and amortization of the fair value
of time charter contracts acquired the earnings per share for the year
ended December 31, 2008 would have been $48.1 million or $1.58 per share
basic and diluted.
-- Adjusted EBITDA was $78.9 million. Please refer to a subsequent
section of the Press Release for a reconciliation of adjusted EBITDA to net
income.
-- An average of 15.62 vessels were operated during 2008 earning an
average time charter equivalent rate of $23,837 per day.
-- Declared quarterly dividends for the first, second, third and fourth
quarters of 2008, aggregating $0.93 per share.
Aristides Pittas, Chairman and CEO of Euroseas, commented: "The fourth
quarter of 2008 was a very challenging one for most shipping companies.
Over the past year, we have been preparing for a possible market downturn
by maintaining a strong balance sheet with a very low level of debt and
plenty of cash. In 2008, we avoided investing in new acquisitions, except
for one which was protected through a 3-year time charter.
Our results for the fourth quarter 2008 were greatly impacted by about $25
million impairment charge we took mainly on m/v Ioanna P. This vessel was
our latest drybulk acquisition and was sold during the first quarter of
2009. Until its sale, this vessel contributed $14.7 million in operating
earnings; had the good markets lasted until mid 2009, as we had expected at
the time of its purchase, it would have earned us enough to prove a
successful investment.
Looking forward into 2009 and 2010, we expect to witness a difficult market
which will however present significant expansion opportunities. We have
currently covered about 75% of our drybulk and 54% of our container
available days for 2009, and, about 75% of our drybulk and 26% of our
container available days for 2010 with time charter or FFA contracts.
Revenues of the vessels that will come out of existing charters in 2009 are
expected to be low and especially in the container market it may prove more
economical to temporarily lay-up some vessels (we have already laid up M/V
ARTEMIS).
We have already started implementing a fleet renewal program by purchasing
two drybulk vessels of around 11-12 years old and selling two of our
25-year old drybulk vessels. The incremental capital expenditure was about
$32 million out of which $10 million is financed with debt and we expect to
use $10 million more to finance the ship that we are taking delivery of in
early March; if we did the same two replacements in our fleet, five months
ago we would have a net capital outlay in excess of $100 million. We will
continue with our modernization and fleet expansion program at opportune
times.
Our Board confirmed its intention to continue paying healthy dividends to
our shareholders throughout the market cycles in parallel with our
expansion program, as far as practically possible. In that respect we are
happy to have declared a quarterly dividend of $0.10 per share which
represents a yield of about 9.5% on the basis of our stock price on
February 20, 2009."
Tasos Aslidis, Chief Financial Officer of Euroseas, commented: "The results
of the full year of 2008 reflect significantly higher revenues compared to
2007 due to the higher average time charter equivalent rate our vessels
have achieved during the year and the higher number of vessels in our
fleet. Our results for the fourth quarter 2008 were lower compared to the
same period for 2007. Our results were also negatively affected by
impairment and other non-cash losses on interest rate derivatives, FFAs and
declines in value of a small amount of securities held.
Daily vessel operating expenses, including management fees, during 2008
reflect an increase of about 15.4% on a per vessel per day basis compared
to 2007. Despite this increase, we maintain one of the lowest operating
cost structures amongst the public shipping companies which, we believe, is
one of our competitive advantages. It is worth noting that in the second
half of 2008 most of the cost increases that occurred in the second quarter
were reversed. We will continue to focus on controlling and reducing our
costs while ensuring safe operations.
I would like to note that we are in full compliance with all our debt
covenants as of December 31, 2008. As of December 31, 2008, our outstanding
debt is about $56 million versus restricted and unrestricted cash of more
than $80 million. Even after accounting for the capital expenditures for
our two acquisitions in 2009, we are left with about $70 million of
restricted and unrestricted cash. Our scheduled debt repayments in 2009 are
about $13.2 million, a number low enough to provide us with operational
cash flow comfort. We estimate that our cash flow breakeven for 2009
excluding dividend payments is around $9,500 per vessel per day."
Fourth Quarter 2008 Results:
For the fourth quarter of 2008, the Company reported total net revenues of
$24.3 million representing a 22.8% decrease over total net revenues of
$31.5 million during the fourth quarter of 2007. The Company reported a net
loss for the period of $22.6 million as compared to net income of $15.3
million for the fourth quarter of 2007. The results for the fourth quarter
of 2008 include a $25.1 million impairment loss on the book value of the
vessels and a $4.7 million loss on derivatives and investments as compared
to $0.1 million gain on investments for the same period of 2007. On
average, 16 vessels were operated during the fourth quarter 2008 earning an
average time charter equivalent rate of $17,971 per day compared to 14.63
vessels in the same period 2007 earning on average $26,479 per day.
Adjusted EBITDA for the fourth quarter of 2008 was $13.1 million, a 39.0%
decrease from $21.5 million achieved during the fourth quarter of 2007.
Please see below for Adjusted EBITDA reconciliation to net income and cash
flow provided by operating activities.
Basic and diluted loss per share for the fourth quarter of 2008 was $0.74,
calculated on 30,520,584 and 30,534,713 weighted average number of shares
outstanding, respectively, compared to basic and diluted earnings per share
of $0.55 for the fourth quarter of 2007, calculated on 27,610,993 and
27,748,850 weighted average number of shares outstanding, respectively.
Excluding the effect on the earnings for the quarter of the impairment
loss, loss on investments and derivatives and amortization of the fair
value of time charter contracts acquired the earnings per share for the
quarter ended December 31, 2008 would have been $0.23 per share basic and
diluted and, for the quarter ended December 31, 2007 would have been $0.50
per share basic and diluted. Usually, security analysts do not include the
above items in their published estimates of earnings per share.
The Company has declared a quarterly dividend of $0.10 per share, which
represents its fourteenth consecutive quarterly dividend and a 67% decrease
over last year's fourth quarter dividend, reflecting the recent dramatic
change of market conditions and the Company's continuing investment
strategy. The dividend is payable on March 20, 2009 to shareholders of
record as of March 12, 2009.
Year Ended December 31, 2008 Results:
For the year ended December 31, 2008, the Company reported total net
revenues of $127.1 million and net income of $23.6 million, representing a
54.8% increase and 41.9% decrease, respectively over 2007. The results for
the year also include a $25.1 million impairment loss on the book value of
the vessels and a $5.4 million loss on derivatives and investments as
compared to $0.1 million gain on investments for the same period of 2007.
Results for the year ended December 31, 2007 included a capital gain of
$3.4 million from the sale of M/V "Ariel."
Adjusted EBITDA for the period was $78.9 million, a 27.9% increase over
2007 (please see below for Adjusted EBITDA reconciliation to net income and
cash flow from operating activities). In the year ended December 31, 2007,
net revenues were $82.1 million, net income was $40.7 million and Adjusted
EBITDA was $61.7 million. On average, 15.62 vessels were operated during
the year 2008 earning an average time charter equivalent rate of $23,837
per day compared to 11.46 vessels in the same period 2007 earning a time
charter equivalent rate of $21,468.
Basic earnings per share for the year ended December 31, 2008 were $0.78
calculated on 30,437,107 weighted average number of shares outstanding,
compared to basic earnings per share of $1.89 for 2007 calculated on
21,566,619 weighted average number of shares outstanding. Diluted earnings
per share for the year ended December 31, 2008 were $0.77 calculated on
30,505,476 weighted average number of shares outstanding, compared to basic
earnings per share of $1.88 for 2007 calculated on 21,644,920 weighted
average number of shares outstanding.
Excluding the effect on the earnings for the year of the impairment loss,
loss on investments and derivatives and from the amortization of the fair
value of time charter contracts acquired the earnings per share for the
year ended December 31, 2008 would have been $1.58 per share basic and
diluted, and, for the year ended December 31, 2007 would have been $1.75
per share basic and $1.74 per share diluted exclusive of a $0.17 per share
capital gain from the sale of M/V Ariel in February 2007. Usually, security
analysts do not include the above in their published estimates of earnings
per share.
Fleet Profile:
The Euroseas Ltd. fleet profile after delivering the vessels Ioanna P and
Nikolas P to their new owners in January and February 2009, respectively,
taking delivery of MONICA P in January 2009 and after taking delivery in
early March 2009 of the recently acquired GLORIOUS WIND (to be renamed
ELENI P) will be as follows:
Year TCERate
Name Type Dwt TEU Built Employment ($/day)
------------ -------- ------ ----- ------------ ----------
Dry Bulk Vessels
------------ -------- ------ ----- ------------ ----------
GLORIOUS WIND
(to be renamed
ELENI P) Panamax 72,119 1997 Spot
------------ -------- ------ ----- ------------ ----------
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 5 296,479
------------ -------- ------ ----- ------------ ----------
------------ -------- ------ ----- ------------ ----------
Multipurpose
Dry Cargo
Vessels
------------ -------- ------ ----- ------------ ----------
TASMAN TRADER 1 22,568 950 1990 TC 'til $ 9,500
Mar-12 'til
Dec-10
$ 9,000
'til
Mar-12
------------ -------- ------ ----- ------------ ----------
Container
Carriers
------------ -------- ------ ----- ------------ ----------
MAERSK NOUMEA Intermediate 34,677 2,556 2001 TC 'til $ 16,800
Aug-11 'til Aug
(3 annual 11
options 'til
Aug-14) $ 18,735
'til Aug
12
$ 19,240
'til Aug
13
$ 19,750
'til Aug
14
------------ -------- ------ ----- ------------ ----------
TIGER BRIDGE Intermediate 31,627 2,228 1990 TC 'til $ 16,500
Jul-09
------------ -------- ------ ----- ------------ ----------
ARTEMIS Intermediate 29,693 2,098 1987 Laid-up
------------ -------- ------ ----- ------------ ----------
DESPINA P Handy size 33,667 1,932 1990 Open
------------ -------- ------ ----- ------------ ----------
OEL INTEGRITY Handy size 33,667 1,932 1990 TC 'til $ 16,500
(ex-JONATHAN P) Mar-09
------------ -------- ------ ----- ------------ ----------
OEL TRANSWORLD Handy size 30,007 1,742 1992 TC 'til $ 12,000
(ex-CLAN Oct-09 'til $ 10,000
GLADIATOR) Oct-10 (owner's
(owner's option)
option)
------------ -------- ------ ----- ------------ ----------
YM XINGANG I Handy size 23,596 1,599 1993 TC 'til $ 26,650
Jul-09
------------ -------- ------ ----- ------------ ----------
MANOLIS P Handy size 20,346 1,452 1995 TC 'til $ 15,800
Oct-09
------------ -------- ------ ----- ------------ ----------
NINOS Feeder 18,253 1,169 1990 TC 'til $ 8,060
(ex-YM QINGDAO Apr-10
I)
------------ -------- ------ ----- ------------ ----------
KUO HSIUNG Feeder 18,154 1,169 1993 Open
------------ -------- ------ ----- ------------ ----------
Total
Container
Carriers 10 273,687 17,877
------------ -------- ------ ----- ------------ ----------
Fleet Grand
Total 16 592,734 18,827
------------ -------- ------ ----- ------------ ----------
(*) "IRINI" is employed in the Baumarine spot pool that is managed by
Klaveness, a major global charterer in the dry bulk area.
(**) "Monica P" is employed in the Bulkhandling spot pool that is managed
by Klaveness, a major global charterer in the dry bulk area.
Summary Fleet Data:
3 months, 3 months, Year Year
ended ended ended ended
December December December December
31, 2007 31, 2008 31, 2007 31, 2008
--------- --------- --------- ---------
FLEET DATA
Average number of vessels (1) 14.63 16.00 11.46 15.62
Calendar days for fleet (2) 1,346.0 1,472.0 4,190.0 5,714.0
Available days for fleet (3) 1,253.0 1,460.1 3,980.0 5,563.2
Voyage days for fleet (4) 1,245.5 1,401.7 3,968.9 5,450.5
Fleet utilization (5) 99.4% 96.0% 99.7% 98.0%
AVERAGE DAILY
RESULTS
(USD/day/vessel)
Time charter equivalent rate
(6) 26,479 17,971 21,468 23,837
Vessel operating expenses (7) 5,399 5,730 4,991 5,759
General and administrative
expenses (8) 1,105 525 634 710
Total vessel operating expenses
(9) 6,504 6,255 5,625 6,469
--------- --------- --------- ---------
(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. Calendar days are an indicator of the size
of our fleet over a period and affect both the amount of revenues and the
amount of expenses that we record during that period.
(3) Available days. We define available days as the total number of days in
a period during which each vessel in our fleet was in our possession net of
off-hire days associated with scheduled repairs, drydockings or special or
intermediate surveys. The shipping industry uses available days to measure
the number of days in a period during which vessels were available to
generate revenues.
(4) 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
off-hire days associated with scheduled and unscheduled repairs,
drydockings or special or intermediate surveys or days waiting to find
employment or other offhire. The shipping industry uses voyage days to
measure the number of days in a period during which vessels actually
generate revenues.
(5) 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.
(6) 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.
(7) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance, repairs
and management fees are calculated by dividing vessel operating expenses
plus management fees by fleet calendar days for the relevant time period.
(8) Daily general and administrative expense is calculated by dividing
general and administrative expense by fleet calendar days for the relevant
time period.
(9) Total vessel operating expenses, or TVOE, is a measure of our total
expenses associated with operating our vessels. TVOE is the sum of vessel
operating expenses, management fees and general and administrative
expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar
days for the relevant time period.
Conference Call and Webcast: Tomorrow, February 24, 2009 at 10:30 a.m. EDT, the company's management will host a conference call to discuss the results. Conference Call details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (from the US), 0800 953 0329 (from the UK) or +44 (0)1452 542 301 (international standard dial in). Please quote "Euroseas." In case of any problems with the above numbers, please dial 1 866 223 0615 (from the US), 0800 694 1503 (from the UK) or +44 (0)1452 586 513 (international standard dial in). Quote "Euroseas." A recording of the conference call will be available until March 3, 2009 by dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 (0)1452 550 000 (international standard dial in). Access Code: 6973591# Audio webcast - Slides Presentation: There will be a live and then archived audio webcast of the conference call, via the internet through the Euroseas website (www.euroseas.gr). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. A slides presentation on the fourth quarter and year ended December 31, 2008 results in PDF format will also be available 30 minutes prior to the conference call and webcast accessible on the company's website (www.euroseas.gr) on the webcast page. Participants to the webcast can download the PDF presentation.
Euroseas Ltd.
Consolidated Condensed Statement of Income
(All amounts expressed in U.S. Dollars - except share amounts)
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2007 2008 2007 2008
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 33,041,513 25,451,506 86,104,365 133,016,281
Commissions (1,516,764) (1,112,667) (4,024,032) (5,940,460)
Net revenues 31,524,749 24,338,839 82,080,333 127,075,821
Operating expenses
Voyage expenses 62,177 262,461 897,463 3,092,323
Vessel operating
expenses 6,022,711 7,168,597 17,240,132 27,521,194
Amortization and
depreciation 7,132,304 7,722,923 17,963,072 33,067,121
Impairment loss - 25,113,364 - 25,113,364
Management fees 1,244,343 1,265,760 3,669,137 5,387,415
Other general and
administrative
expenses 1,487,958 772,561 2,656,176 4,057,736
Total operating
expenses 15,949,493 42,305,666 42,425,980 98,239,153
Net gain from sale
of vessel - - 3,411,397 -
Operating income 15,575,256 (17,966,827) 43,065,750 28,836,668
Other income/
(expenses)
Interest and
finance cost (1,259,048) (619,077) (4,850,239) (2,930,737)
Interest income 909,686 783,159 2,357,633 3,168,501
Gain (loss) from
investments 98,744 (1,436,513) 98,744 (1,997,524)
Loss on
derivatives - (3,364,429) - (3,474,635)
Foreign exchange
(loss) gain (6,060) 24,164 (7,824) 7,888
Other expenses,
net (256,678) (4,612,696) (2,401,686) (5,226,507)
------------ ------------ ------------ ------------
Net income (loss) 15,318,578 (22,579,523) 40,664,064 23,610,161
------------ ------------ ------------ ------------
Earnings (loss),
per share, basic 0.55 (0.74) 1.89 0.78
Weighted average
number of shares,
basic 27,610,993 30,520,584 21,566,619 30,437,107
Earnings (loss),
per share, diluted 0.55 (0.74) 1.88 0.77
Weighted average
number of shares,
diluted 27,748,850 30,534,713 21,644,920 30,505,476
Euroseas Ltd.
Consolidated Condensed Balance Sheet
(All amounts expressed in U.S. Dollars)
December 31, December 31,
2007 2008
------------- -------------
(unaudited) (unaudited)
ASSETS
Current Assets:
Cash and cash equivalents 104,135,320 73,851,191
Trade accounts receivable 1,174,045 1,237,592
Other receivables, net 741,081 1,439,628
Due from related company 5,291,197 4,678,750
Inventories 1,903,678 2,011,973
Restricted cash 1,739,879 2,181,264
Vessels held for sale - 6,067,020
Trading securities 2,891,658 771,727
Derivatives - 61,670
Prepaid expenses 430,605 241,102
Total current assets 118,307,463 92,541,917
Fixed assets:
Vessels, net 238,248,984 231,127,386
Advances for vessel acquisition - 1,821,798
Long-term assets:
Restricted cash 4,500,000 4,800,000
Deferred charges, net 5,529,870 7,771,342
Derivatives - 68,038
Fair value of above market time charter
acquired 4,604,514 1,653,422
Total long-term assets 252,883,368 247,241,986
------------- -------------
Total assets 371,190,831 339,783,903
------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt, current portion 25,575,000 12,450,000
Trade accounts payable 3,789,764 2,283,488
Accrued expenses 2,043,585 1,206,466
Accrued dividends - 116,750
Deferred revenue 3,774,162 3,764,935
Derivatives - 827,210
Total current liabilities 35,182,511 20,648,849
Long-term liabilities:
Long term debt, net of current portion 56,015,000 43,565,000
Derivatives - 2,700,028
Fair value of below market time charter
acquired 8,202,972 8,704,811
Total long-term liabilities 64,217,972 54,969,839
Total liabilities 99,400,483 75,618,688
Shareholders' equity:
Common stock (par value $0.03, 100,000,000
shares authorized, 30,261,113 and 30,575,611
issued and outstanding)
Preferred shares (par value $0.01, 20,000,000
shares authorized, no shares issued and
outstanding) 907,834 917,269
Additional paid-in capital 231,147,700 234,567,670
Retained earnings 39,734,814 28,680,276
Total shareholders' equity 271,790,348 264,165,215
------------- -------------
Total liabilities and shareholders' equity 371,190,831 339,783,903
------------- -------------
Euroseas Ltd.
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
Year Ended Year Ended
December 31, December 31,
------------ ------------
2007 2008
------------ ------------
(unaudited) (unaudited)
------------ ------------
Cash flows from operating activities:
Net income 40,664,064 23,610,161
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of vessels 16,423,092 29,120,972
Impairment of vessels - 25,113,364
Amortization of deferred charges 1,612,695 4,031,290
Amortization of fair value of time charters 548,254 (6,144,507)
Gain on sale of vessels (3,411,397) -
Share-based compensation 822,782 1,618,484
Investment in trading securities, net (2,792,914) (192,859)
Loss on trading securities (98,744) 2,312,790
Loss on derivatives - 3,397,530
Changes in operating assets and liabilities (4,809,062) (8,583,484)
------------ ------------
Net cash provided by operating activities 48,958,770 74,283,741
------------ ------------
Cash flows from investing activities:
Purchase of vessels including improvements (149,502,254) (43,582,320)
Advances for vessel acquisition - (1,821,798)
Change in restricted cash (2,393,258) (741,385)
Proceeds from sale of vessels 5,223,521 -
------------ ------------
Net cash (used in) investing activities (146,671,991) (46,145,503)
------------ ------------
Cash flows from financing activities:
Issuance of share capital 527,204 5,030
Net proceeds from shares issued 213,692,070 1,805,892
Dividends paid (20,278,535) (34,547,949)
Loan arrangement fees paid (110,000) -
Offering expenses paid (1,413,305) (110,340)
Proceeds from long term debt 25,000,000 -
Repayment of long-term debt (18,360,000) (25,575,000)
------------ ------------
Net cash provided by / (used in) financing
activities 199,057,434 (58,422,367)
------------ ------------
Net increase / (decrease) in cash and cash
equivalents 101,344,213 (30,284,129)
Cash and cash equivalents at beginning of
period 2,791,107 104,135,320
------------ ------------
Cash and cash equivalents at end of period 104,135,320 73,851,191
------------ ------------
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 Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2007 2008 2007 2008
------------ ------------ ------------ ------------
Net income/(loss) 15,318,578 (22,579,523) 40,664,064 23,610,161
------------ ------------ ------------ ------------
Interest and
finance costs,
net (includes
interest income) 349,362 (164,082) 2,492,606 (237,764)
------------ ------------ ------------ ------------
Depreciation,
amortization of
deferred charges
and impairment
loss 7,132,304 32,836,287 17,963,072 58,180,485
------------ ------------ ------------ ------------
Loss on
derivatives - 3,364,429 - 3,474,635
------------ ------------ ------------ ------------
Amortization of
fair value of
below market time
charter acquired (2,042,062) (1,077,768) (2,390,709) (9,095,599)
------------ ------------ ------------ ------------
Amortization of
fair value of
above market time
charter acquired 737,773 737,773 2,938,963 2,951,092
------------ ------------ ------------ ------------
Adjusted EBITDA 21,495,955 13,117,116 61,667,996 78,883,010
============ ============ ============ ============
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2007 2008 2007 2008
------------ ------------ ------------ ------------
Net cash flow
provided by
operating
activities 15,645,916 13,690,216 48,958,770 74,283,741
------------ ------------ ------------ ------------
Changes in
operating assets /
liabilities 3,449,963 1,107,406 4,809,062 8,583,484
------------ ------------ ------------ ------------
Gain from vessel
sale - - 3,411,397 -
------------ ------------ ------------ ------------
Loss on trading
securities, net 98,744 (1,478,022) 98,744 (2,312,790)
------------ ------------ ------------ ------------
Investment in
trading
securities, net 2,792,914 130,814 2,792,914 192,859
------------ ------------ ------------ ------------
Loss on
derivatives
(realized) - 77,105 - 77,105
------------ ------------ ------------ ------------
Share based
compensation (822,782) (225,661) (822,782) (1,618,484)
------------ ------------ ------------ ------------
Interest, net 331,200 (184,742) 2,419,891 (322,905)
------------ ------------ ------------ ------------
Adjusted EBITDA 21,495,955 13,117,116 61,667,996 78,883,010
============ ============ ============ ============
EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings before
interest, taxes, depreciation, impairment loss, amortization of deferred
charges, amortization of fair value from above or below market time
charters acquired and gain or loss on derivatives. Adjusted EBITDA does not
represent and should not be considered as an alternative to net income or
cash flow from operations, as determined by United States generally
accepted accounting principles, or U.S. GAAP, and our calculation of
Adjusted EBITDA may not be comparable to that reported by other companies.
Adjusted EBITDA is included herein because it is a basis upon which we
assess our liquidity position and because we believe that it presents
useful information to investors regarding a company's ability to service
and/or incur indebtedness. The Company's definition of Adjusted EBITDA may
not be the same as that used by other companies in the shipping or other
industries.
Euroseas Ltd.
Reconciliation of Net Income Excluding the Effect from the Impairment Loss,
Loss on derivatives, Loss on trading securities, Amortization of the
Fair Value of Charters Acquired and Gain from Vessel Sale to Net Income
(All amounts expressed in U.S. Dollars - except share data and
per share amounts)
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2007 2008 2007 2008
------------ ------------ ------------ ------------
Net income/(loss) 15,318,578 (22,579,523) 40,664,064 23,610,161
------------ ------------ ------------ ------------
Impairment loss - 25,113,364 - 25,113,364
------------ ------------ ------------ ------------
Loss on derivatives - 3,364,429 - 3,474,635
------------ ------------ ------------ ------------
Loss on investments (98,744) 1,436,513 (98,744) 1,997,524
------------ ------------ ------------ ------------
Amortization of
deferred revenue
of below market
time charter
acquired (2,042,062) (1,077,768) (2,390,709) (9,095,599)
------------ ------------ ------------ ------------
Amortization of
deferred revenue
of above market
time charter
acquired 737,773 737,773 2,938,963 2,951,092
------------ ------------ ------------ ------------
Gain on vessel
sale - - (3,411,397) -
------------ ------------ ------------ ------------
Net Income
excluding
impairment loss,
loss on
derivatives, loss
on trading
securities,
amortization of
the fair value of
charters acquired
and gain on vessel
sale 13,915,545 6,994,788 37,702,177 48,051,177
------------ ------------ ------------ ------------
Net Income
excluding
impairment loss,
loss on
derivatives, loss
on trading
securities,
amortization of
the fair value of
charters acquired
and gains on
vessel sales,
basic 0.50 0.23 1.75 1.58
------------ ------------ ------------ ------------
Weighted average
number of shares,
basic 27,610,993 30,520,584 21,566,619 30,437,107
------------ ------------ ------------ ------------
Net Income
excluding
impairment loss,
loss on
derivatives, loss
on trading
securities,
amortization of
the fair value of
charters acquired
and gains on
vessel sales,
diluted 0.50 0.23 1.74 1.58
------------ ------------ ------------ ------------
Weighted average
number of shares,
diluted 27,748,850 30,534,713 21,644,920 30,505,476
============ ============ ============ ============
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.
After the delivery of M/V GLORIOUS WIND in March 2009, the Company will
have a fleet of 16 vessels, including 3 Panamax drybulk carriers, 1
Handymax drybulk carrier, 1 Handysize drybulk carrier, 3 Intermediate
container ship, 5 Handysize container ships, 2 Feeder container ships and a
multipurpose dry cargo vessel. Euroseas` 5 drybulk carriers have a total
cargo capacity of 296,479 dwt, its 10 container ships have a cargo capacity
of 17,877 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.
Contact Information: Contact: Visit our website www.euroseas.gr 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