-- Net income of $15.3 million or $0.50 per share basic and diluted on
total net revenues of $35.5 million. Excluding the effect on the earnings
for the quarter from the amortization of the fair value of time charter
contracts acquired the earnings per share for the quarter ended September
30, 2008 would have been $0.46 per share basic and diluted.
-- Adjusted EBITDA was $23.0 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 third quarter of
2008 earning an average time charter equivalent rate of $25,951 per day.
-- Declared a quarterly dividend of $0.20 per share for the third quarter
of 2008 payable on December 23, 2008 to shareholders of record on December
16, 2008. This is the thirteenth consecutive quarterly dividend declared.
Nine Months 2008 Highlights:
-- Net income of $46.2 million or $1.52 per share basic and $1.51 per
share diluted on total net revenues of $102.7 million. Excluding the effect
on the earnings for the period from the amortization of the fair value of
time charter contracts acquired the earnings per share for the nine months
ended September 30, 2008 would have been $1.33 per share basic and $1.32
per share diluted.
-- Adjusted EBITDA was $65.7 million. Please refer to a subsequent
section of the Press Release for a reconciliation of adjusted EBITDA to net
income.
-- An average of 15.48 vessels were operated during the first nine months
of 2008 earning an average time charter equivalent rate of $25,868 per day
-- Declared quarterly dividends for the first, second and third quarters
of 2008, aggregating $0.83 per share.
Aristides Pittas, Chairman and CEO of Euroseas commented: "The third
quarter of 2008 was one of our best in terms of vessel operating results.
However, starting in September 2008 and continuing in October and November
the global shipping markets were directly affected by the credit crisis and
trade effectively came to a standstill. As a result spot charter rates
plummeted. While we believe that the long term prospects of world trade
continue to remain strong, we expect that the broad economic slowdown will
continue to have a negative effect on the amount of the goods being shipped
in the near term, thus, exerting downward pressure on shipping rates and
vessel prices.
Given the strength of our balance sheet, Euroseas is especially well
positioned to benefit from such a market environment by pursuing attractive
investments. We avoided investing in dry bulk vessels at historically high
prices over the last 2 years, focusing instead on investing in older ships
which we employed mostly on the spot market thus minimizing residual value
and charterer risk. Such a strategy put us in a solid financial position
with a significant amount of cash, ready to exploit opportunities to renew
our fleet as we believe this is the time to buy younger vessels.
To increase our purchasing power, our Board has decided to reduce our
quarterly dividend to $0.20 per share to maximize our flexibility in
pursuing the above strategy for the long term benefit of our shareholders.
This dividend still represents a significant yield of about 20% on the
basis of our stock price on November 12, 2008. Our aim remains to continue
providing substantial dividends throughout the market cycles while
exploiting unique investment opportunities that might emerge."
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results
of the first nine months of 2008 reflect significantly higher revenues
compared to the first nine months of 2007 due to the higher average time
charter equivalent rate our vessels have achieved and the higher number of
vessels in our fleet. Our results for the quarter were however affected by
the general conditions affecting the credit markets. For example, one of
our previous charterers against whom we had a claim for approximately $0.5
million went bankrupt and as a result we needed to make a provision for it.
Still, our net revenues of $35.5 million for the quarter were the highest
ever. Our results were also negatively affected by non-cash losses on
interest rate derivatives and declines in value of a small amount of
securities held for a total of about ($0.04) per share.
Daily vessel operating expenses, including management fees, during the
first nine months of 2008 reflect an increase of about 20.3% on a per
vessel per day basis compared to the same period in 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 third quarter 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 comfortably -- given our low leverage --
in compliance with all our debt covenants as of September 30, 2008. In
addition, we have approximately $74 million of unrestricted cash plus about
$7 million of restricted cash against total debt of about $62 million. Our
scheduled debt repayments in 2009 are about $12.5 million, a number low
enough to provide us with operational cash flow comfort."
Third Quarter 2008 Results:
For the third quarter of 2008, the Company reported total net revenues of
$35.5 million and net income of $15.3 million representing a 65.3% and
61.8% increase, respectively, over total net revenues of $21.5 million and
net income of $9.5 million during the third quarter of 2007. On average, 16
vessels were operated during the third quarter 2008 earning an average time
charter equivalent rate of $25,951 per day compared to 12.13 vessels in the
same period 2007 earning on average $20,024 per day.
Adjusted EBITDA for the third quarter of 2008 was $23.0 million, a 51.0%
increase over $15.2 million achieved during the third quarter of 2007.
Please see below for Adjusted EBITDA reconciliation to net income and cash
flow provided by operating activities.
Basic earnings per share for the third quarter of 2008 were $0.50,
calculated on 30,476,135 weighted average number of shares outstanding,
compared to earnings per share of $0.40 for the third quarter of 2007,
calculated on 23,934,434 weighted average number of shares outstanding.
Diluted earnings per share were $0.50 and $0.39 calculated on 30,551,315
and 24,061,880 weighted average number of shares outstanding for the third
quarter of 2008 and 2007, respectively.
Excluding the effect on the earnings for the quarter from the amortization
of the fair value of time charter contracts acquired the earnings per share
for the quarter ended September 30, 2008 would have been $0.46 per share
basic and diluted and, for the quarter ended September 30, 2007 would have
been $0.42 per share basic and diluted. Usually, security analysts do not
include amortization of the fair value of period charter contracts in their
published estimates of earnings per share.
The Company has declared a quarterly dividend of $0.20 per share, which
represents its thirteenth consecutive quarterly dividend and a 31% decrease
over last year's third quarter dividend, reflecting the recent dramatic
change of market conditions and the Company's investment strategy. The
dividend is payable on December 23, 2008 to shareholders of record as of
December 16, 2008.
Nine Months Ended September 30, 2008 Results:
For the nine months ended September 30, 2008, the Company reported total
net revenues of $102.7 million and net income of $46.2 million,
representing a 103.2% and 82.2% increase, respectively over the same period
of 2007. Adjusted EBITDA for the period was $65.7 million, a 63.4% increase
over 2007 (please see below for Adjusted EBITDA reconciliation to net
income and cash flow from operating activities). In the first nine months
ended September 30, 2007, net revenues were $50.6 million, net income was
$25.3 million and Adjusted EBITDA was $40.2 million. On average, 15.48
vessels were operated during the nine month period 2008 earning an average
time charter equivalent rate of $25,868 per day compared to 10.41 vessels
in the same period 2007 earning a time charter equivalent rate of $19,177.
Results for the nine month period ended September 30, 2007 included a
capital gain of $3.4 million from the sale of M/V "Ariel." Excluding the
capital gains from the 2007 results, net income and Adjusted EBITDA for the
nine month period ended September 30, 2008 increased 110.6% and 78.6%,
respectively, over the same period of 2007.
Basic earnings per share for the nine months ended September 30, 2008 were
$1.52 calculated on 30,409,078 weighted average number of shares
outstanding, compared to earnings per share of $1.30 for the same period of
2007 calculated on 19,508,351 weighted average number of shares
outstanding. Diluted earnings per share were $1.51 and $1.30 calculated on
30,555,095 and 19,557,805 weighted average number of shares outstanding for
the first nine months of 2008 and 2007, respectively.
Excluding the effect on the earnings for the quarter from the amortization
of the fair value of time charter contracts acquired the earnings per share
for the nine month period ended September 30, 2008 would have been $1.33
per share basic and $1.32 per shares diluted and, for the nine month period
ended September 30, 2007 would have been $1.22 per share basic and diluted
exclusive of a $0.17 per share capital gain from the sale of M/V Ariel in
February 2007. Usually, security analysts do not include amortization of
the fair value of period charter contracts or contribution from capital
gains in their published estimates of earnings per share.
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
Year TCE Rate
Name Type Dwt TEU Built Employment ($/day)
------------- ------- ------ ----- -------------- --------------
Dry Bulk
Vessels
------------- ------- ------ ----- -------------- --------------
Baumarine Pool
- ‘til end Spot/Partly
IRINI (*) Panamax 69,734 1988 2008 fixed
------------- ------- ------ ----- -------------- --------------
ARISTIDES
N.P Panamax 69,268 1993 TC ‘til Jan-09 $ 52,000
------------- ------- ------ ----- -------------- --------------
IOANNA P Panamax 64,873 1984 Spot Spot
------------- ------- ------ ----- -------------- --------------
NIKOLAOS P Handysize 34,750 1984 Spot Spot
------------- ------- ------ ----- -------------- --------------
GREGOS Handysize 38,691 1984 Spot Spot
------------- ------- ------ ----- -------------- --------------
Total Dry
Bulk
Vessels 5 277,316
------------- ------- ------ ----- -------------- --------------
Multipurpose
Dry Cargo
Vessels
------------- ------- ------ ----- -------------- --------------
$ 8,850 ‘til
Dec-08,
$ 9,500 ‘til
Dec-10,
TASMAN TC ‘til $ 9,000 ‘til
TRADER 1 22,568 950 1990 Mar-12 Mar-12
------------- ------- ------ ----- -------------- --------------
Container
Carriers
------------- ------- ------ ----- -------------- --------------
$ 16,800 ‘til
Aug 11
$ 18,735 ‘til
Aug 12
TC ‘til Aug-11 $ 19,240 ‘til
(3 annual Aug 13
MAERSK options ’til $ 19,750 ‘til
NOUMEA Intermediate 34,677 2,556 2001 Aug-14) Aug 14
------------- ------- ------ ----- -------------- --------------
TIGER
BRIDGE Intermediate 31,627 2,228 1990 TC ‘til Jul-09 $ 16,500
------------- ------- ------ ----- -------------- --------------
ARTEMIS Intermediate 29,693 2,098 1987 TC ‘til Dec-08 $ 19,000
------------- ------- ------ ----- -------------- --------------
DESPINA P Handy size 33,667 1,932 1990 TC ‘til Jan-09 $ 15,250
------------- ------- ------ ----- -------------- --------------
OEL
INTEGRITY
(ex-
JONATHAN P Handy size 33,667 1,932 1990 TC ‘til Mar-09 $ 16,500
------------- ------- ------ ----- -------------- --------------
OEL
TRANSWORld
(ex-CLAN
GLADIATOR) Handy size 30,007 1,742 1992 TC ‘til Sep-09 $ 18,500
------------- ------- ------ ----- -------------- --------------
YM
XINGANG I Handy size 23,596 1,599 1993 TC ‘til Jul-09 $ 26,650
------------- ------- ------ ----- -------------- --------------
MANOLIS P Handy size 20,346 1,452 1995 TC ‘til Oct-09 $ 15,800
------------- ------- ------ ----- -------------- --------------
$ 12,800 ‘til
NINOS Apr-08
(ex-YM $ 13,175 ‘til
QINGDAO I) Feeder 18,253 1,169 1990 TC ‘til Apr-09 Apr-09
------------- ------- ------ ----- -------------- --------------
KUO
HSIUNG Feeder 18,154 1,169 1993 TC ‘til Jan-09 $ 15,800
------------- ------- ------ ----- -------------- --------------
Total
Container
Carriers 10 273,687 17,877
------------- ------- ------ ----- -------------- --------------
Fleet
Grand
Total 16 573,571 18,827
------------- ------- ------ ----- -------------- --------------
(*) "IRINI" is employed in the Baumarine spot pool that is managed by
Klaveness, a major global charterer in the dry bulk area, and also
participates in "short" funds (contracts to carry cargo at agreed rates),
reducing its exposure to the spot market.
Summary Fleet Data:
3 months, 3 months, 9 months, 9 months,
ended ended ended ended
September September September September
30, 2007 30, 2008 30, 2007 30, 2008
--------- --------- --------- ---------
FLEET DATA
Average number of vessels (1) 12.13 16.00 10.41 15.48
Calendar days for fleet (2) 1,116.0 1,471.0 2,844.0 4,242.0
Available days for fleet (3) 1,100.4 1,430.0 2,727.0 4,103.1
Voyage days for fleet (4) 1,100.3 1,402.6 2,723.4 4,048.8
Fleet utilization (5) 100.0% 98.0% 99.9% 98.7%
AVERAGE DAILY
RESULTS
(USD/day/vessel)
Time charter equivalent rate
(6) 20,024 25,951 19,177 25,868
Vessel operating expenses (7) 5,233 5,674 4,797 5,770
General and administrative
expenses (8) 434 671 411 774
Total vessel operating expenses
(9) 5,667 6,345 5,208 6,544
--------- --------- --------- ---------
(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, November 14, 2008 at 10:00 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."
A recording of the conference call will be available until November 21,
2008 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 third quarter and nine month period ended
September 30, 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 Nine Months Nine Months
Ended Ended, Ended, Ended
September September September September
30, 2007 30, 2008 30, 2007 30, 2008
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Voyage revenue 22,538,504 37,111,568 53,062,852 107,564,775
Commissions (1,086,167) (1,660,638) (2,507,268) (4,827,793)
Net revenues 21,452,337 35,450,930 50,555,584 102,736,982
Operating expenses
Voyage expenses 506,663 712,403 835,286 2,829,862
Vessel operating
expenses 4,867,262 6,944,686 11,217,421 20,352,597
Amortization and
depreciation 4,667,638 8,887,717 10,830,769 25,344,198
Management fees 973,416 1,407,120 2,424,794 4,121,655
Other general and
administrative
expenses 484,302 987,746 1,168,218 3,285,175
Total operating
expenses 11,499,281 18,939,672 26,476,488 55,933,487
Net gain from sale
of vessel - - 3,411,397 -
Operating income 9,953,056 16,511,258 27,490,493 46,803,495
Other income/
(expenses)
Interest and
finance cost (1,233,086) (610,924) (3,591,190) (2,311,660)
Interest income 751,966 525,123 1,447,947 2,385,342
Loss from
investments - (992,706) - (561,011)
Loss on interest
rate swap - (110,206) - (110,206)
Foreign exchange
loss (1,824) (2,894) (1,764) (16,276)
Other expenses, net (482,944) (1,191,607) (2,145,007) (613,811)
------------ ------------ ------------ ------------
Net income 9,470,112 15,319,652 25,345,486 46,189,684
------------ ------------ ------------ ------------
Earnings, per
share, basic 0.40 0.50 1.30 1.52
Weighted average
number of shares,
basic 23,934,434 30,476,135 19,508,351 30,409,078
Earnings, per
share, diluted 0.39 0.50 1.30 1.51
Weighted average
number of shares,
diluted 24,061,880 30,551,315 19,557,805 30,555,095
Euroseas Ltd.
Consolidated Condensed Balance Sheet
(All amounts expressed in U.S. Dollars)
December 31, September 30,
2007 2008
(unaudited) (unaudited)
ASSETS
Current Assets:
Cash and cash equivalents 104,135,320 74,297,153
Trade accounts receivable 1,174,045 1,441,850
Other receivables, net 741,081 1,445,275
Due from related company 5,291,197 4,862,004
Inventories 1,903,678 1,649,820
Restricted cash 1,739,879 2,359,781
Trading securities 2,891,658 2,118,935
Prepaid expenses 430,605 465,015
Total current assets 118,307,463 88,639,833
Fixed assets:
Vessels, net 238,248,984 268,824,600
Long-term assets:
Restricted cash 4,500,000 4,800,000
Deferred charges, net 5,529,870 7,937,391
Deferred offering expenses - 143,505
Fair value of above market time charter
acquired 4,604,514 2,391,195
Total long-term assets 252,883,368 284,096,691
------------- --------------
Total assets 371,190,831 372,736,524
------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt, current portion 25,575,000 15,740,000
Trade accounts payable 3,789,764 3,082,489
Accrued expenses 2,043,585 1,202,518
Accrued dividends - 132,525
Deferred revenue 3,774,162 3,415,007
Total current liabilities 35,182,511 23,572,539
Long-term liabilities:
Long term debt, net of current portion 56,015,000 46,590,000
Interest rate swap - 110,206
Fair value of below market time charter
acquired 8,202,972 9,782,579
Total long-term liabilities 64,217,972 56,482,785
Total liabilities 99,400,483 80,055,324
Shareholders' equity:
Common stock (par value $0.03, 100,000,000
shares authorized, 30,261,113 and
30,508,111 issued and outstanding) 907,834 915,244
Preferred shares (par value $0.01,
20,000,000 shares authorized, no shares
issued and outstanding)
Additional paid-in capital 231,147,700 234,344,035
Retained earnings 39,734,814 57,421,921
Total shareholders' equity 271,790,348 292,681,200
------------- --------------
Total liabilities and shareholders' equity 371,190,831 372,736,524
------------- --------------
Euroseas Ltd.
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
Nine Months Nine Months
Ended Ended
September 30, September 30,
--------------- ---------------
2007 2008
--------------- ---------------
(unaudited) (unaudited)
--------------- ---------------
Cash flows from operating activities:
Net income 25,345,486 46,189,684
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation of vessels 9,818,391 22,604,142
Amortization of deferred charges 1,066,931 2,804,537
Amortization of fair value of time
charters 1,852,543 (5,804,512)
Gain on sale of vessels (3,411,397) -
Share-based compensation - 1,392,823
Investment in trading securities, net - (62,045)
Loss on trading securities - 834,768
Loss on interest rate swap - 110,206
Changes in operating assets and
liabilities (1,359,099) (7,476,078)
--------------- ---------------
Net cash provided by operating activities 33,312,855 60,593,525
--------------- ---------------
Cash flows from investing activities:
Purchase of vessels including
improvements (95,699,902) (43,582,320)
Advances for vessel acquisition (2,408,154) -
Change in restricted cash (1,005,376) (919,902)
Proceeds from sale of vessels 5,223,522 -
--------------- ---------------
Net cash (used in) investing activities (93,889,910) (44,502,222)
--------------- ---------------
Cash flows from financing activities:
Issuance of share capital 348,685 5,030
Net proceeds from shares issued 118,687,556 1,805,892
Dividends paid (13,237,819) (28,370,052)
Loan arrangement fees paid (40,000) -
Offering expenses paid (1,223,065) (110,340)
Proceeds from long term debt 10,000,000 -
Repayment of long-term debt (13,590,000) (19,260,000)
--------------- ---------------
Net cash provided by / (used in)
financing activities 100,945,357 (45,929,470)
--------------- ---------------
Net increase / (decrease) in cash and
cash equivalents 40,368,302 (29,838,167)
Cash and cash equivalents at beginning of
period 2,791,107 104,135,320
--------------- ---------------
Cash and cash equivalents at end of
period 43,159,409 74,297,153
--------------- ---------------
Euroseas Ltd.
Reconciliation of Adjusted EBITDA to
Net Income and Cash Flow Provided By Operating Activities
(All amounts expressed in U.S. Dollars)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2007 30, 2008 30, 2007 30, 2008
---------- ---------- ---------- ----------
Net income 9,470,112 15,319,652 25,345,486 46,189,684
---------- ---------- ---------- ----------
Interest and finance costs,
net (includes interest
income) 481,120 85,801 2,143,243 (73,682)
---------- ---------- ---------- ----------
Depreciation and
amortization 4,667,638 8,887,717 10,830,769 25,344,198
---------- ---------- ---------- ----------
Amortization of deferred
revenue of below market
time charter acquired (116,856) (2,025,674) (348,647) (8,017,831)
---------- ---------- ---------- ----------
Amortization of deferred
revenue of above market
time charter acquired 737,773 737,773 2,201,190 2,213,319
---------- ---------- ---------- ----------
Adjusted EBITDA 15,239,787 23,005,269 40,172,041 65,655,688
========== ========== ========== ==========
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2007 30, 2008 30, 2007 30, 2008
----------- ---------- ----------- ----------
Net cash flow provided by
operating activities 11,989,767 20,638,993 33,312,855 60,593,525
----------- ---------- ----------- ----------
Changes in operating assets
/ liabilities 2,785,603 3,673,539 1,359,099 7,476,078
----------- ---------- ----------- ----------
Gain from vessel sale - - 3,411,397 -
----------- ---------- ----------- ----------
Loss on trading securities,
net - (1,091,463) - (834,768)
----------- ---------- ----------- ----------
Investment in trading
securities, net - 344,691 - 62,045
----------- ---------- ----------- ----------
Loss on interest rate swap - (110,206) - (110,206)
----------- ---------- ----------- ----------
Share based compensation - (515,425) - (1,392,823)
----------- ---------- ----------- ----------
Interest, net 464,417 65,140 2,088,690 (138,163)
----------- ---------- ----------- ----------
Adjusted EBITDA 15,239,787 23,005,269 40,172,041 65,655,688
=========== ========== =========== ==========
EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings before
interest, taxes, depreciation, amortization 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 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 Amortization of the Fair Value of Charters Acquired
and Gains from Vessel Sales to Net Income
(All amounts expressed in U.S. Dollars - except share data
and per share amounts)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2007 2008 2007 2008
------------- ------------- ------------- -------------
Net income 9,470,112 15,319,652 25,345,486 46,189,684
------------- ------------- ------------- -------------
Amortization of
deferred
revenue of
below market
time charter
acquired (116,856) (2,025,673) (348,647) (8,017,831)
------------- ------------- ------------- -------------
Amortization of
deferred
revenue of
above market
time charter
acquired 737,773 737,773 2,201,190 2,213,319
------------- ------------- ------------- -------------
Gain on vessel
sale - - (3,411,397) -
------------- ------------- ------------- -------------
Net Income
excluding
amortization
of the fair
value of
charters
acquired and
gains on
vessel sales 10,091,029 14,031,752 23,786,632 40,385,172
------------- ------------- ------------- -------------
Net Income per
share
excluding
amortization
of the fair
value of
charters
acquired,
basic 0.42 0.46 1.22 1.33
------------- ------------- ------------- -------------
Weighted
average number
of shares,
basic 23,934,434 30,476,135 19,508,351 30,409,078
------------- ------------- ------------- -------------
Net Income per
share
excluding
amortization
of the fair
value of
charters
acquired,
diluted 0.42 0.46 1.22 1.32
------------- ------------- ------------- -------------
Weighted
average number
of shares,
diluted 24,061,880 30,551,315 19,557,805 30,555,095
============= ============= ============= =============
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 16 vessels, including 3 Panamax drybulk
carriers, 2 Handysize drybulk carriers, 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
277,316 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