SOURCE: Euroseas

Euroseas

November 10, 2016 08:15 ET

Euroseas Ltd. Reports Results for the Nine-Month Period and Quarter Ended September 30, 2016

MAROUSSI, ATHENS, GREECE--(Marketwired - Nov 10, 2016) - Euroseas Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced today its results for the three and nine month periods ended September 30, 2016.

Third Quarter 2016 Highlights:

  • Total net revenues of $7.2 million. Net loss of $4.6 million; net loss attributable to common shareholders (after a $0.4 million dividend on Series B Preferred Shares) of $5.0 million or $0.61 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $0.401 per share basic and diluted.

  • Adjusted EBITDA1 was $0.3 million.

  • An average of 11.0 vessels were owned and operated during the third quarter of 2016 earning an average time charter equivalent rate of $7,737 per day.

  • The Company declared its eleventh dividend of $0.4 million on its Series B Preferred Shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.

First Nine Monthss 2016 Highlights:

  • Total net revenues of $21.1 million. Net loss of $26.6 million; net loss attributable to common shareholders (after a $1.3 million dividend on Series B Preferred Shares) of $27.9 million or $3.43 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders1 for the period was $1.291.

  •  Adjusted EBITDA1 was $(0.8) million.

  • An average of 11.3 vessels were owned and operated during the first nine months of 2016 earning an average time charter equivalent rate of $7,220 per day.

1Adjusted EBITDA, Adjusted net loss, Adjusted net loss attributable to common shareholders and Adjusted loss per share attributable to common shareholders are not recognized measurements under U.S. GAAP. Refer to a subsequent section of the Press Release for the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

Aristides Pittas, Chairman and CEO of Euroseas, commented: "In early September, we cancelled the second of our Ultramax newbuildings due to excessive construction delays. Along with our other Ultramax contract cancelled in June, we have requested and are pursuing return of our deposits and other expenses plus interest as specified in the newbuilding contracts and secured by refund guarantees. On the operating front, the markets remain challenging. Both of the market segments we operate in, continue being at depressed levels despite a modest recovery of drybulk charter rates. Containership rates remained depressed and the idle fleet is increasing. We have been able to extend the employment for 3 of our containerships whose charter was expiring but another onehas been idle for almost two months. As we are entering the cyclically slow season till the end of the Chinese New Year we decided to lay the vessel up till the market improves thus saving on costs.

"Thus, our focus over the next twelve months is to manage our liquidity effectively until receiving our newbuilding deposits and exploit to the extent possible market opportunities to renew our fleet. We continue to expect that the supply and demand balance will shift in favor of demand for both sectors over the next two years. We want to take advantage of such a development for the benefit of our shareholders. To this end we are evaluating various financing alternatives."

Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the third quarter of 2016 reflect the continued depressed state of the drybulk and container markets. Comparing our results for the third quarter of 2016 with the same period of 2015, our net revenues declined by about $4.1 million and we incurred $0.1 million lower voyage expenses."

"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, were at about the same level compared to the third quarter of 2016 and registered a decrease of about 2.7% for the nine month period ended September 30, 2016 over the same period of 2015. Drydocking expenses expressed on a per vessel per day basis were higher by 20.9% in the nine month period of 2016 and 16.0% lower for the third quarter of 2016, respectively, as compared to the same periods in 2015. As always, we want to emphasize that cost control remains a key component of our strategy. The results for the nine months 2016, also include a loss of $3.2 million on termination of two newbuilding contracts, one terminated in June and the other in September 2016. This loss relates to expenses that cannot be refunded as a result of the cancelations (like management and supervision costs). Also, our results for the first nine months of 2016 include an impairment charge of $14.0 million taken in June 2016 on our equity minority investment in Euromar LLC, our joint venture with two private equity firms, as a result of continuing depressed containership markets and new debt restructuring agreements between Euromar LLC and its banks.

"As of September 30, 2016, our net outstanding debt was $52.4 million versus restricted and unrestricted cash of about $8.8 million."

Third Quarter 2016 Results:
For the third quarter of 2016, the Company reported total net revenues of $7.2 million representing a 36.1% decrease over total net revenues of $11.3 million during the third quarter of 2015. The Company reported net loss for the period of $4.6 million and a net loss attributable to common shareholders of $5.0 million, as compared to a net loss of $1.4 million and $1.8 million respectively, for the third quarter of 2015. The results for the third quarter of 2016 include a $0.05 million gain on derivatives, a $1.8 million loss on contract termination of a newbuilding contract as compared to $0.2 million loss on derivatives for the same period of 2015. Drydocking expenses amounted to $0.6 million during the third quarter of the year 2016 as one vessel underwent drydocking compared to two vessels that underwent drydocking during the end of the second quarter and the beginning of the third quarter of 2015 for a total amount of $0.89 million. Depreciation expense for the third quarter of 2016 was $2.2 million compared to $2.8 million during the same period of 2015. On average, 11.0 vessels were owned and operated during the third quarter of 2016 earning an average time charter equivalent rate of $7,737 per day compared to 15.0 vessels in the same period of 2015 earning on average $8,929 per day.

Adjusted EBITDA1 for the third quarter of 2016 was $0.3 million compared to $2.0 million achieved during the third quarter of 2015. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share attributable to common shareholders for the third quarter of 2016 was $0.61 calculated on 8,139,060 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.29 for the third quarter of 2015, calculated on 6,140,438 basic and diluted weighted average number of shares outstanding.

Excluding the effect, on the loss attributable to common shareholders, for the quarter of the unrealized gain, the realized loss on derivatives and the loss on termination of one newbuilding contracts, the adjusted net loss per share attributable to common shareholders for the quarter ended September 30, 2016 would have been $0.40 per share basic and diluted compared to net loss of $0.26 per share basic and diluted for the quarter ended September 30, 2015. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Nine Months 2016 Results:
For the first nine months of 2016, the Company reported total net revenues of $21.1 million representing a 26.9% decrease over total net revenues of $28.9 million during the first nine months of 2015. The Company reported a net loss for the period of $26.6 million and a net loss attributable to common shareholders of $27.9 million, as compared to net loss of $10.1 million and $11.33 million respectively, for the first nine months of 2015. The results for the first nine months of 2016 include a $0.2 million loss on derivatives, a $0.01 million gain on sale of a vessel, $3.2 million loss on termination of two newbuilding contracts and a $14.0 million impairment of investment in joint venture as compared to $0.4 million loss on derivatives for the same period of 2015. Depreciation expense for the first nine months of 2016 was $6.6 million compared to $8.6 million during the same period of 2015. On average, 11.3 vessels were owned and operated during the first nine months of 2016 earning an average time charter equivalent rate of $7,220 per day compared to 15.0 vessels in the same period of 2015 earning on average $7,529 per day.

Adjusted EBITDA1 for the first nine months of 2016 was $(0.8) million compared to $0.1 million achieved during the first nine months of 2015. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share attributable to common shareholders for the first nine months of 2016 was $3.43, calculated on 8,116,343 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $1.92 for the first nine months of 2015, calculated on 5,903,609 basic and diluted weighted average number of shares outstanding.

Excluding the effect, on the loss attributable to common shareholders, for the first nine months of 2016 of the unrealized and realized loss on derivatives, the loss on termination of two newbuilding contracts, the gain on sale of a vessel and the impairment of investment in a joint venture, the adjusted net loss per share attributable to common shareholders for the nine-month period ended September 30, 2016 would have been $1.29 compared to loss of $1.85 per share basic and diluted for the same period in 2015. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:

 Name Type Dwt TEU Year Built Employment(*)
TCE Rate ($/day)
 Dry Bulk Vessels            
 XENIA Kamsarmax 82,000   2016 TC until Jan 2020 + 1 year at charterer's option $14,100
Option @
 $14,350
 EIRINI P Panamax 76,466   2004 TC until Jan-17 104% of average BPI** 4TC
 PANTELIS Panamax 74,020   2000 TC until Dec-16 $6,800
 ELENI P Panamax 72,119   1997 TC until Nov-16 $7,500
 MONICA P Handymax 46,667   1998 TC until Nov-16 $4,500
 Vessels under construction(*)            
 Hull Number YZJ 1153 Kamsarmax 82,000   2018 N/A  
 Total Dry Bulk Vessels 6 433,272        

 Container Carriers
           
 EVRIDIKI G Intermediate 34,677 2,556 2001 TC until Jan-18 $11,000
 AGGELIKI P Intermediate 30,360 2,008 1998 TC until Jan-17 +
 6 months Option
$7,000
$9,000
 JOANNA Handy size 22,301 1,732 1999 open  
 MANOLIS P Handy size 20,346 1,452 1995 TC until Feb-17 $6,800
 AEGEAN EXPRESS Feeder 18,581 1,439 1997 TC until Feb-17 $6,300
 NINOS
(ex-YM QINGDAO I)
Feeder 18,253 1,169 1990
TC until Apr-17
$7,000
 KUO HSIUNG Feeder 18,154 1,169 1993 TC until May-17 $7,000
 Total Container Carriers 7 162,672 11,525      
 Fleet Grand Total 13 595,944 11,525      

Note: (*) Hull Number YZJ 1153 is due to be delivered in the first quarter of 2018.
(**) BPI is the Baltic Panamax Index.

Summary Fleet Data:

  Three Months, Ended
September 30, 2015
  Three Months, Ended
September 30, 2016
  Nine Months, Ended
September 30, 2015
  Nine
Months, Ended
September 30, 2016
FLEET DATA              
Average number of vessels (1) 15.00   11.02   15.00   11.33
Calendar days for fleet (2) 1,380.0   1,014.0   4,095.0   3,105.0
Scheduled off-hire days incl. laid-up (3) 42.50   26.42   89.58   57.69
Available days for fleet (4) = (2) - (3) 1,337.50   987.58   4,005.42   3,047.31
Commercial off-hire days (5) 26.68   32.93   117.82   127.83
Operational off-hire days (6) 12.0   -   15.62   7.5
Voyage days for fleet (7) = (4) - (5) - (6) 1,298.82   954.65   3,871.98   2,911.98
Fleet utilization (8) = (7) / (4) 97.1%   96.7%   96.7%   95.6%
Fleet utilization, commercial (9) = ((4) - (5)) / (4) 98.0%   96.7%   97.1%   95.8%
Fleet utilization, operational (10) = ((4) - (6)) / (4) 99.1%   100.0%   99.6%   99.8%
               
AVERAGE DAILY RESULTS              
Time charter equivalent rate (11) 8,929   7,737   7,529   7,220
Vessel operating expenses excl. drydocking expenses (12) 5,251   5,020   5,556   5,143
General and administrative expenses (13) 595   818   619   867
Total vessel operating expenses (14) 5,846   5,838   6,175   6,010
Drydocking expenses (15) 647   544   460   556

(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.

(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. We use available days to measure the number of days in a period during which vessels were available to generate revenues.

(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. We use 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. We use 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 days 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 determined by dividing revenue generated from voyage charters net of voyage expenses by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot voyage charters, time charters and bareboat charters) under which the vessels may be employed between the periods.

(12) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and management fees are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. 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. TVOE is the sum of vessel operating expenses excluding drydocking 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:
Later today, Thursday, November 10, 2016 at 10:30 a.m. EST, the company's management will host a conference call to discuss the results.

Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or (+44) (0) 1452 542 301 (from outside the US). Please quote "Euroseas."

A replay of the conference call will be available until Thursday, November 17, 2016. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 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.

The slide presentation on the third quarter ended September 30, 2016, will also be available in PDF format 10 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.  
Unaudited Consolidated Condensed Statements of Operations  
(All amounts expressed in U.S. Dollars - except number of shares)  
   
  Three Months Ended
September 30,
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
    Nine Months Ended
September 30,
 
  2015     2016     2015     2016  
                       
Revenues                      
Voyage revenue 11,882,933     7,567,000     30,357,715     22,111,476  
Related party revenue 60,000     60,000     180,000     180,000  
Commissions (628,276 )   (400,922 )   (1,672,566 )   (1,179,636 )
Net revenues 11,314,657     7,226,078     28,865,149     21,111,840  
                       
Operating expenses                      
Voyage expenses 285,887     180,908     1,204,320     1,088,633  
Vessel operating expenses 6,190,657     4,313,089     19,575,241     13,608,596  
Drydocking expenses 893,345     551,407     1,882,654     1,725,240  
Depreciation 2,824,824     2,188,438     8,605,776     6,569,978  
Management fees 1,055,430     777,436     3,177,465     2,361,821  
Gain on sale of vessel -     -     -     (10,597 )
Loss on termination of newbuilding contracts
-
   
1,753,762
    -     3,202,030  
Other general and administrative expenses
821,201
   
825,031
    2,533,286     2,694,252  
Total operating expenses 12,071,344     10,590,071     36,978,742     31,239,953  
                       
Operating loss (756,687 )   (3,363,993 )   (8,113,593 )   (10,128,113 )
                       
Other income/(expenses)                      
Interest and finance cost (382,906 )   (927,639 )   (1,232,290 )   (1,843,413 )
(Loss) / gain on derivatives, net (210,863 )   49,048     (376,135 )   (215,839 )
Other investment income 282,625     341,571     847,875     1,024,712  
Foreign exchange (loss) / gain (4,089 )   (8,660 )   29,373     (35,792 )
Interest income 2,707     6,960     24,912     16,565  
Other expenses, net (312,526 )   (538,720 )   (706,265 )   (1,053,767 )
Equity loss and impairment in joint venture (323,710 )   (657,765 )   (1,279,250 )   (15,410,321 )
Net loss (1,392,923 )   (4,560,478 )   (10,099,108 )   (26,592,201 )
Dividend Series B preferred shares (411,858 )   (436,391 )   (1,220,382 )   (1,283,808 )
Net loss available to common shareholders (1,804,781 )   (4,996,869 )   (11,319,490 )   (27,876,009 )
Loss, per share, basic and diluted (0.29 )   (0.61 )   (1.92 )   (3.43 )
Weighted average number of shares basic and diluted 6,140,438     8,139,060     5,903,609     8,116,343  
                       
                       
Euroseas Ltd.  
Unaudited Consolidated Condensed Balance Sheets  
(All amounts expressed in U.S. Dollars - except number of shares)  
   
  December 31,
2015
    September 30,
2016
 
           
ASSETS (unaudited)  
Current Assets:          
  Cash and cash equivalents 8,715,636     1,728,226  
  Trade accounts receivable 1,408,272     797,225  
  Other receivables, net 1,231,391     17,598,113  
  Inventories 1,464,940     1,347,128  
  Restricted cash 5,916,743     1,889,065  
  Prepaid expenses 175,506     242,771  
  Vessel held for sale 2,671,811     -  
Total current assets 21,584,299     23,602,528  
           
Fixed assets:          
  Vessels, net 88,957,752     114,628,730  
  Advances for vessels under construction 32,701,867     3,847,759  
Long-term assets:          
  Restricted cash 4,550,000     5,184,267  
  Deferred charges, net 418,034     472,195  
  Other investments 7,396,738     8,421,452  
  Investment in joint venture 16,515,701     1,105,381  
Total long-term assets 150,540,092     133,659,784  
Total assets 172,124,391     157,262,312  
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current liabilities:          
  Long term debt, current portion 14,685,766     15,797,351  
  Trade accounts payable 1,394,874     2,066,214  
  Accrued expenses 1,203,070     847,662  
  Liabilities from assets held from sale 1,122,208     -  
  Deferred revenue 462,124     778,538  
  Due to related company 322,703     139,640  
  Derivatives 50,402     -  
Total current liabilities 19,241,147     19,629,405  
           
Long-term liabilities:          
  Long term debt, net of current portion 25,552,702     36,530,657  
  Derivatives 202,700     358,161  
Total long-term liabilities 25,755,402     36,888,818  
Total liabilities 44,996,549     56,518,223  
           
Mezzanine equity:          
  Series B Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 33,779 and 35,063 shares issued and outstanding, respectively)
32,079,249
    33,363,057  
           
Shareholders' equity:          
  Common stock (par value $0.03, 200,000,000 shares authorized, 8,195,760 issued and outstanding)
245,873
   
 246,899
 
  Additional paid-in capital 278,833,156     279,040,578  
  Accumulated deficit (184,030,436 )   (211,906,445 )
  Total shareholders' equity 95,048,593     67,381,032  
  Total liabilities and shareholders' equity 172,124,391     157,262,312  
             
             
Euroseas Ltd.  
Unaudited Consolidated Condensed Statements of Cash Flows  
(All amounts expressed in U.S. Dollars)  
   
  Nine Months Ended September 30,     Nine Months Ended September 30,  
2015     2016  
           
Cash flows from operating activities:          
Net loss (10,099,108 )   (26,592,201 )
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation of vessels 8,605,776     6,569,978  
Amortization and write off of deferred charges 115,494     554,566  
Gain on sale of a vessel       (10,597 )
Loss on termination of newbuilding contracts -     3,202,030  
Equity loss and impairment of investment in joint venture 1,279,250     15,410,321  
Share-based compensation 247,465     213,448  
Unrealized loss on derivatives 144,479     105,059  
Other income accrued (847,875 )   (1,024,712 )
Changes in operating assets and liabilities 687,485     1,785,527  
Net cash provided by operating activities 132,966     213,419  
           
Cash flows from investing activities:          
Advances for vessels under construction (10,674,779 )   (23,264,490 )
Vessel acquisition -     (3,017,015 )
Release of restricted cash 3,200,000     5,325,014  
Increase in restricted cash (1,126,658 )   (1,931,603 )
Proceeds from sale of vessels -     4,196,268  
Net cash used in investing activities (8,601,437 )   (18,691,826 )
           
Cash flows from financing activities:          
Proceeds from issuance of common stock, net 10,545,008     -  
Loan fees paid (346,411 )   (727,501 )
Offering expenses paid (135,463 )   (47,377 )
Proceeds from long term debt 5,000,000     28,300,000  
Repayment of long-term debt (11,444,000 )   (16,034,125 )
Net cash provided by financing activities 3,619,134     11,490,997  
           
Net decrease in cash and cash equivalents (4,849,337 )   (6,987,410 )
Cash and cash equivalents at beginning of period 25,411,420     8,715,636  
Cash and cash equivalents at end of period 20,562,083     1,728,226  
           
           
Euroseas Ltd,
Reconciliation of Adjusted EBITDA to
Net loss and Cash Flow Provided By / (Used In) Operating Activities
(All amounts expressed in U.S. Dollars)
 
 
Three Months Ended
September 30, 2015
   
Three Months Ended
September 30, 2016
   
Nine Months Ended
September 30, 2015
   
Nine Months Ended
September 30, 2016
 
Net loss (1,392,923 )   (4,560,478 )   (10,099,108 )   (26,592,201 )
Depreciation 2,824,824     2,188,438     8,605,776     6,569,978  
Loss on termination of newbuilding contracts -     1,753,762     -     3,202,030  
Impairment of investment in joint venture -     -     -     14,000,000  
Gain on sale of a vessel -     -     -     (10,597 )
Interest and finance costs, net (incl, interest income) 380,199     920,679     1,207,378     1,826,848  
Unrealized and realized loss / (gain) on derivatives, net 210,863     (49,048 )   376,135     215,839  
Adjusted EBITDA 2,022,963     253,353     90,181     (788,103 )
                       
 
Three Months Ended
September 30, 2015
   
Three Months Ended
September 30, 2016
   
Nine Months Ended
September 30, 2015
   
Nine Months Ended
September 30, 2016
 
Net cash flow provided by operating activities 927,971     185,357     132,966     213,419  
Changes in operating assets / liabilities 719,388     (64,309 )   (687,485 )   (1,785,527 )
Loss on derivatives, realized 102,329     27,600     231,656     110,780  
Share-based compensation (25,397 )   (73,317 )   (247,465 )   (213,448 )
Equity loss in joint venture and other investment income, net (41,085 )   (316,194 )   (431,375 )   (385,609 )
Interest, net 339,757     494,216     1,091,884     1,272,282  
Adjusted EBITDA 2,022,963     253,353     90,181     (788,103 )
                       

Adjusted EBITDA Reconciliation: Euroseas Ltd. considers Adjusted EBITDA to represent net earnings / (loss) before interest, income taxes, depreciation, amortization, gain / loss in derivatives and loss on termination of a newbuilding contracts, impairment of investment in joint venture and gain on sale of a vessel. Adjusted EBITDA does not represent and should not be considered as an alternative to net income / (loss) or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and the Company's 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 the Company assesses its financial performance and liquidity position and because the Company believes 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 loss to Adjusted net loss  
(All amounts expressed in U.S. Dollars - except share data and number of shares)  
   
 
Three Months Ended
September 30, 2015
   
Three
Months Ended
September 30, 2016
   
Nine
Months
Ended
September 30, 2015
   
Nine
Months Ended
September 30, 2016
 
Net loss (1,392,923 )   (4,560,478 )   (10,099,108 )   (26,592,201 )
Unrealized loss / (gain) on derivatives 108,534     (76,648 )   144,479     105,059  
Realized loss on derivatives 102,329     27,600     231,656     110,780  
Gain on sale of a vessel -     -     -     (10,597 )
Loss on termination of newbuilding contracts -     1,753,762     -     3,202,030  
Impairment of investment in joint venture -     -     -     14,000,000  
Adjusted net loss (1,182,060 )   (2,855,764 )   (9,722,973 )   (9,184,929 )
Preferred dividends (411,858 )   (436,391 )   (1,220,382 )   (1,283,808 )
Adjusted net loss available to common shareholders (1,593,918 )   (3,292,155 )   (10,943,355 )   (10,468,737 )
Adjusted net loss per share, basic and diluted (0.26 )   (0.40 )   (1.85 )   (1.29 )
Weighted average number of shares, basic and diluted 6,140,438     8,139,060     5,903,609     8,116,343  
                       

"Adjusted net loss" and "Adjusted net loss per share" Reconciliation: Euroseas Ltd. considers "Adjusted net loss" to represent net loss before gain / loss on derivatives, loss on termination of new building contract and gain on sale of a vessel. "Adjusted net loss" and "Adjusted net loss per share" is included herein because we believe it assists our management and investors by increasing the comparability of the Company's fundamental performance from period to period by excluding the potentially disparate effects between periods of gain / loss on derivatives, loss on termination of newbuilding contracts, gain on sale of a vessel and impairment of investment in joint venture, which items may significantly affect results of operations between periods.

"Adjusted Net loss" and "Adjusted net loss per share" do not represent and should not be considered as an alternative to net loss or loss per share, as determined by U.S. GAAP. The Company's definition of "Adjusted net loss" and "Adjusted net loss per share" may not be the same as that used by other companies in the shipping or other industries.

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 Market under the ticker ESEA since January 31, 2007.

Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2008 certified affiliated ship management company and Eurobulk (FE) Ltd. Inc., also an affiliated ship management company, which are 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 12 vessels, including 3 Panamax drybulk carriers, 1 Handymax drybulk carrier and 1 Kamsarmax drybulk carrier, 2 Intermediate containerships, 2 Handysize containerships, 3 Feeder containerships. Euroseas 5 drybulk carriers have a total cargo capacity of 351,272 dwt, its 7 containerships have a cargo capacity of 11,525 teu. The Company has also signed contracts for the construction of one Kamsarmax (82,000 dwt) fuel efficient drybulk carrier. Including the new-building, the total cargo capacity of the Company's drybulk vessels will be 433,272 dwt.

Forward Looking Statement: This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels and container ships, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Visit our website www.euroseas.gr

Contact Information

  • Company Contact
    Tasos Aslidis
    Chief Financial Officer
    Euroseas Ltd.
    11 Canterbury Lane,
    Watchung, NJ 07069
    Tel. (908) 301-9091
    E-mail: aha@euroseas,gr

    Investor Relations / Financial Media
    Nicolas Bornozis
    President
    Capital Link, Inc.
    230 Park Avenue, Suite 1536
    New York, NY 10169
    Tel. (212) 661-7566
    E-mail: euroseas@capitallink,com