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SOURCE: Paragon Shipping Inc.
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February 22, 2010 16:05 ET
Paragon Shipping Inc. Reports Fourth Quarter and Year Ended December 31, 2009 Results
ATHENS, GREECE--(Marketwire - February 22, 2010) - Paragon Shipping Inc. (NASDAQ: PRGN), or the
Company, a global shipping transportation company specializing in drybulk
cargoes, announced today its results for the fourth quarter and year ended
December 31, 2009.
Commenting on the results, Michael Bodouroglou, Chairman and Chief
Executive Officer of Paragon Shipping, stated, "I am pleased to announce
yet another strong set of quarterly results coupled with an even stronger
set of annual results for 2009. Paragon has once again demonstrated that
its adherence to period charter cover and cost control measures produces
consistency of financial performance. After adjusting for non-cash items,
net income for 2009 was $55.0 million compared to $56.2 million in 2008,
which represents a $1.2 million or 2.2% decline based on the same fleet
composition. This solid performance was produced against a backdrop of
weaker charter rates and global economic turmoil during 2009."
Mr. Bodouroglou concluded, "Paragon faces 2010 in what we believe to be a
very strong financial position. The current fleet of eleven vessels has
significant protection against volatility in the charter market as we have
100% of our revenue days fixed at levels that will generate free cash flow
over and above our capital obligations. The indications for 2010 are that
of another volatile market with a record number of newbuildings scheduled
to be delivered. We have positioned Paragon to take advantage of what we
believe will be opportunities to acquire vessels at attractive price levels
during the coming two years. We have significant liquidity reserves to
substantially increase our fleet size and composition. Provided that no
unforeseen events occur, we believe 2010 could be another profitable year
for Paragon and one that could see the Company deliver on its strategic
goal of growth."
Fourth Quarter 2009 Financial Results:
Time charter revenue for the fourth quarter of 2009 was $37.1 million,
compared to $44.3 million for the fourth quarter of 2008. The Company
reported net income of $12.7 million, or $0.26 per basic and diluted share
for the fourth quarter of 2009, calculated on 47,547,627 weighted average
number of basic and diluted shares outstanding for the period and
reflecting the impact of the non-cash items discussed below. For the fourth
quarter of 2008, the Company reported net income of $10.0 million, or $0.37
per basic and diluted share, calculated on 27,038,015 weighted average
number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the
fourth quarter of 2009 was $8.6 million, or $0.17 per basic and diluted
share. This compares to adjusted net income of $14.0 million, or $0.52 per
basic and diluted share for the fourth quarter of 2008. Please refer to the
table at the back of this press release for reconciliations of GAAP net
income to non-GAAP adjusted net income and GAAP earnings per share to
non-GAAP adjusted earnings per share.
EBITDA was $22.4 million for the fourth quarter of 2009, compared to $22.7
million for the fourth quarter of 2008. This was calculated by adding to
net income of $12.7 million for the fourth quarter of 2009, net interest
expense and depreciation that in the aggregate amounted to $9.7 million for
the fourth quarter of 2009. Adjusted EBITDA, excluding all non-cash items
described below, was $17.6 million for the fourth quarter of 2009, compared
to $26.0 million for the fourth quarter of 2008. Please see the table at
the back of this release for a reconciliation of EBITDA and Adjusted EBITDA
to net income.
The Company operated 12 vessels during the fourth quarter of 2009, earning
an average time charter equivalent rate, or TCE rate, of $32,350 per day,
compared to an average of 12 vessels during the fourth quarter of 2008,
earning an average TCE rate of $39,077 per day. Please see the table at the
back of this release for a reconciliation of TCE rates to time charter
revenue.
Total adjusted operating expenses for the fourth quarter of 2009 were $10.7
million, or approximately $9,697 per day, including vessel operating
expenses, management fees, general and administrative expenses and
drydocking costs, but excluding $2.4 million of share-based compensation
for the period. For the fourth quarter of 2008, total adjusted operating
expenses were $10.4 million, or approximately $9,395 per day, including
vessel operating expenses, management fees, general and administrative
expenses and drydocking costs, but excluding $0.1 million of share-based
compensation.
Fourth Quarter 2009 Non-cash Items
The Company's results for the three months ended December 31, 2009 included
the following non-cash items:
-- Non-cash revenue of $4.7 million and depreciation expense of $0.7
million associated with below market time charters attached to vessels
acquired, which increases net revenue (amortized over the remaining
period of the time charter) and increases depreciation expense
(amortized over the remaining useful life of the vessel). These non-
cash items contributed an aggregate of $4.0 million to net income, or
$0.09 to basic and diluted earnings per share, for the three months
ended December 31, 2009.
-- Write-off of $0.5 million, relating to the below market time charters
attached to vessels acquired and associated with the early termination
of the related time charter agreement, which increases net income, or
$0.01 per basic and diluted share.
-- Vessel fair value gain on the MV Blue Seas of $0.7 million, or $0.01
per basic and diluted share.
-- An unrealized gain from interest rate swaps of $1.4 million, or $0.03
per basic and diluted share for the three months ended December 31,
2009.
-- Non-cash expenses of $2.4 million, or $0.05 per basic and diluted
share, relating to the amortization for the three months ended December
31, 2009, of the compensation cost recognized for non-vested shares
awards issued to executive officers, directors and employees and
related to share based compensation to the management company.
In the aggregate, these non-cash items increased net income by $4.2
million, or $0.09 to earnings per basic and diluted share, for the three
months ended December 31, 2009.
Dividend Declared
The Company's Board of Directors declared a quarterly dividend of $0.05 per
share with respect to the fourth quarter of 2009, payable on or about March
12, 2010 to shareholders of record as of the close of business on March 1,
2010.
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping Inc. mainly
employs vessels under fixed rate charters for periods ranging from one to
five years. Assuming all options are exercised, the Company has secured
under such contracts 100%, 90% and 45% of its fleet capacity in the
remainder of 2010, in 2011 and in 2012, respectively.
Cash Flows
For the year ended December 31, 2009, the Company generated net cash from
operating activities of $80.4 million, compared to $83.5 million for the
year ended December 31, 2008. For the year ended December 31, 2009, net
cash used in investing activities was $41.0 million and net cash from
financing activities was $25.6 million. For the year ended December 31,
2008, net cash used in investing activities was $78.1 million and cash from
financing activities was $31.7 million.
Year ended December 30, 2009 Financial Results:
Time charter revenue for the year ended December 31, 2009 was $161.1
million, compared to $169.3 million for the year ended December 31, 2008.
The Company reported net income of $65.7 million, or $1.69 per basic and
diluted share for the year ended December 31, 2009, calculated on
38,026,523 weighted average number of basic and diluted shares outstanding
for the period and reflecting the impact of the non-cash items discussed
below. For the year ended December 31, 2008, the Company reported net
income of $69.2 million, or $2.58 and $2.56 per basic and diluted share,
respectively, calculated on 26,819,923 weighted average number of basic
shares and on 27,010,013 weighted average number of diluted shares.
Excluding all non-cash items described below, adjusted net income for the
year ended December 31, 2009 was $55.0 million, or $1.42 per basic and
diluted share. This compares to adjusted net income of $56.2 million, or
$2.10 and $2.08 per basic and diluted share, respectively, for the year
ended December 31, 2008. Please refer to the table at the back of this
press release for reconciliations of GAAP net income to non-GAAP adjusted
net income and GAAP earnings per share to non-GAAP adjusted earnings per
share.
EBITDA was $109.8 million for the year ended December 31, 2009, compared to
$116.1 million for the year ended December 31, 2008. This was calculated by
adding to net income of $65.7 million for the year ended December 31, 2009,
net interest expense and depreciation that in the aggregate amounted to
$44.1 million for the year ended December 31, 2009. Adjusted EBITDA,
excluding all non-cash items described below, was $96.4 million for the
year ended December 31, 2009, compared to $100.3 million for the year ended
December 31, 2008. Please see the table at the back of this release for a
reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated 12 vessels during the year ended December 31, 2009,
earning an average TCE rate of $35,250 per day, compared to an average of
11.4 vessels during the year ended December 31, 2008, earning an average
TCE rate of $39,439 per day. Please see the table at the back of this
release for a reconciliation of TCE rates to time charter revenue.
Total adjusted operating expenses for the year ended December 31, 2009 were
$31.0 million, or approximately $7,069 per day, including vessel operating
expenses, management fees, general and administrative expenses and
drydocking costs, but excluding $3.1 million of share-based compensation
for the period. For the year ended December 31, 2008, total adjusted
operating expenses were $32.6 million, or approximately $7,809 per day,
including vessel operating expenses, management fees, general and
administrative expenses and drydocking costs, but excluding $0.5 million of
share-based compensation.
Year ended December 31, 2009 Non-cash Items
The Company's results for the year ended December 31, 2009 included the
following non-cash items:
-- Non-cash revenue of $18.6 million and depreciation expense of $2.8
million associated with below market time charters attached to vessels
acquired, which increases net revenue (amortized over the remaining
period of the time charter) and increases depreciation expense
(amortized over the remaining useful life of the vessel). These non-
cash items contributed an aggregate of $15.8 million to net income, or
$0.42 to basic and diluted earnings per share, for the year ended
December 31, 2009.
-- Write-off of $0.5 million, relating to the below market time charters
attached to vessels acquired and associated with the early termination
of the related time charter agreement, which increases net income, or
$0.01 per basic and diluted share.
-- Impairment loss on the MV Blue Seas of $6.0 million, or $0.16 per basic
and diluted share.
-- An unrealized gain from interest rate swaps of $3.4 million, or $0.09
per basic and diluted share for the year ended December 31, 2009.
-- Non-cash expenses of $3.1 million, or $0.08 per basic and diluted
share, relating to the amortization for the year ended December 31,
2009, of the compensation cost recognized for non-vested shares awards
issued to executive officers, directors and employees and related to
share based compensation to the management company.
In the aggregate, these non-cash items contributed $10.7 million to net
income, or $0.27 to earnings per basic and diluted share, for the year
ended December 31, 2009.
Conference Call and Webcast:
The Company's management will host a conference call to discuss its fourth
quarter and year ended December 31, 2009 results on February 23, 2010 at
9:00 a.m. Eastern Time.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329
(from the UK) or +44 (0) 1452 542 301 (from outside the US). Please quote
"Paragon."
A replay of the conference call will be available until March 2, 2010. 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: 55939564#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the Paragon Shipping website (www.paragonship.com). Participants to the
live webcast should register on the website approximately 10 minutes prior
to the start of the webcast.
About Paragon Shipping Inc.
Paragon Shipping Inc. is an Athens, Greece-based international shipping
company specializing in the transportation of drybulk cargoes. The
Company's current fleet consists of eleven vessels with a total carrying
capacity of 719,483 dwt.
Cautionary Statement Regarding Forward-Looking Statement
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides
safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their
business. Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of
historical facts.
The Company desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The
words "believe," "anticipate," "intends," "estimate," "forecast,"
"project," "plan," "potential," "may," "should," "expect," "pending" and
similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available
from third parties. Although we believe that these assumptions were
reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, we cannot assure you that
we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in
our view, could cause actual results to differ materially from those
discussed in the forward-looking statements include the strength of world
economies and currencies, general market conditions, including fluctuations
in charter rates and vessel values, changes in demand for drybulk shipping
capacity, changes in our operating expenses, including bunker prices,
drydocking and insurance costs, the market for our vessels, availability of
financing and refinancing, charter counterparty performance, ability to
obtain financing and comply with covenants in such financing arrangements,
changes in governmental rules and regulations or actions taken by
regulatory authorities, potential liability from pending or future
litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political
events, vessels breakdowns and instances of off-hires and other factors.
Please see our filings with the Securities and Exchange Commission for a
more complete discussion of these and other risks and uncertainties.
- Tables Follow -
Updated Fleet List
The following table represents our fleet as of February 22, 2010.
Name Type Dwt Year Built
---------- ---------- ----------
Panamax
---------- ---------- ----------
Deep Seas Panamax 72,891 1999
---------- ---------- ----------
Calm Seas Panamax 74,047 1999
---------- ---------- ----------
Kind Seas Panamax 72,493 1999
---------- ---------- ----------
Pearl Seas Panamax 74,483 2006
---------- ---------- ----------
Diamond Seas Panamax 74,274 2001
---------- ---------- ----------
Coral Seas Panamax 74,477 2006
---------- ---------- ----------
Golden Seas Panamax 74,475 2006
---------- ---------- ----------
Total Panamax 7 517,140
---------- ---------- ----------
Handymax
---------- ---------- ----------
Clean Seas Handymax 46,640 1995
---------- ---------- ----------
Crystal Seas Handymax 43,222 1995
---------- ---------- ----------
Total Handymax 2 89,862
---------- ---------- ----------
Supramax
---------- ---------- ----------
Sapphire Seas Supramax 53,702 2005
---------- ---------- ----------
Friendly Seas Supramax 58,779 2008
---------- ---------- ----------
Total Supramax 2 112,481
---------- ---------- ----------
Grand Total 11 719,483
---------- ---------- ----------
Summary Fleet Data
Quarter Ended Quarter Ended
December 31, 2008 December 31, 2009
----------------- -----------------
FLEET DATA
----------------- -----------------
Average number of vessels (1) 12 12
----------------- -----------------
Available days for fleet (2) 1,075 1,083
----------------- -----------------
Calendar days for fleet (3) 1,104 1,104
----------------- -----------------
Fleet utilization (4) 97% 98%
----------------- -----------------
AVERAGE DAILY RESULTS
----------------- -----------------
Time charter equivalent (5) 39,077 32,350
----------------- -----------------
Time charter equivalent
adjusted (5) 34,140 28,007
----------------- -----------------
Vessel operating expenses (6) 4,604 4,720
----------------- -----------------
Drydocking expenses (7) 782 568
----------------- -----------------
Management fees adjusted (8) 819 848
----------------- -----------------
General and administrative expenses
adjusted (9) 3,190 3,561
----------------- -----------------
Total vessel operating expenses
adjusted (10) 9,395 9,697
----------------- -----------------
Year Ended Year Ended
December 31, 2008 December 31, 2009
----------------- -----------------
FLEET DATA
----------------- -----------------
Average number of vessels (1) 11.4 12
----------------- -----------------
Available days for fleet (2) 4,074 4,322
----------------- -----------------
Calendar days for fleet (3) 4,174 4,380
----------------- -----------------
Fleet utilization (4) 98% 99%
----------------- -----------------
AVERAGE DAILY RESULTS
----------------- -----------------
Time charter equivalent (5) 39,439 35,250
----------------- -----------------
Time charter equivalent
adjusted (5) 32,920 30,942
----------------- -----------------
Vessel operating expenses (6) 4,556 4,574
----------------- -----------------
Drydocking expenses (7) 669 163
----------------- -----------------
Management fees adjusted (8) 847 822
----------------- -----------------
General and administrative expenses
adjusted (9) 1,737 1,510
----------------- -----------------
Total vessel operating expenses
adjusted (10) 7,809 7,069
----------------- -----------------
(1) Average number of vessels is the number of vessels that constituted our
fleet for the relevant period, as measured by the sum of the number of
calendar days each vessel was a part of our fleet during the period divided
by the number of calendar days in the period.
(2) Available days for the fleet are the total calendar days the vessels
were in our possession for the relevant period after subtracting for
off-hire days with major repairs, drydocks or special or intermediate
surveys.
(3) Calendar days are the total days we possessed the vessels in our fleet
for the relevant period including off-hire days associated with major
repairs, drydockings or special or intermediate surveys.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating available days and is determined by
dividing available days by fleet calendar days for the relevant period.
(5) Time charter equivalent or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is determined by
dividing revenue generated from charters net of voyage expenses by
available days for the relevant time period. Voyage expenses primarily
consist of port, canal and fuel costs that are unique to a particular
voyage. TCE is a non-GAAP standard shipping industry performance measure
used primarily to compare period-to-period changes in a shipping company's
performance despite changes in the mix of charter types (i.e., spot voyage
charters, time charters and bareboat charters) under which the vessels may
be employed between the periods.
For the time charter equivalent adjusted, other non-cash items relating to
the below market time charters attached to vessels acquired, which are
amortized over the remaining period of the time charter as an increase to
net revenue, have been excluded. The Company excluded amortization of below
market acquired time charters because the Company believes that these
non-cash items do not reflect fairly the fleet operational results.
(6) Daily vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and
repairs, is calculated by dividing vessel operating expenses by fleet
calendar days for the relevant time period.
(7) Daily drydocking expenses are calculated by dividing drydocking
expenses by fleet calendar days for the relevant time period.
(8) Daily management fees are calculated by dividing management fees
payable in cash by fleet calendar days for the relevant time period and
exclude share based compensation to the management company.
(9) Daily general and administrative expenses are calculated by dividing
general and administrative expense by fleet calendar days for the relevant
time period. Non-cash expenses relating to the amortization of the share
based compensation cost for non-vested shares awards have been excluded.
(10) Total vessel operating expenses, or TVOE, is a measurement of our
total expenses associated with operating our vessels. TVOE is the sum of
vessel operating expenses, drydocking expenses, management fees and general
and administrative expenses. Daily TVOE is calculated by dividing TVOE by
fleet calendar days for the relevant time period. Non-cash expenses
relating to the amortization of the share based compensation cost for
non-vested shares awards and to share based compensation to the management
company have been excluded.
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
Quarter Ended Quarter Ended
December 31, 2008 December 31, 2009
----------------- -----------------
Time Charter Revenues 44,346,386 37,120,851
----------------- -----------------
Less Voyage Expenses 12,563 (185,515)
----------------- -----------------
Less Commission (2,350,660) (1,899,856)
----------------- -----------------
Total Revenue, net of voyage expenses 42,008,289 35,035,480
----------------- -----------------
Total available days 1,075 1,083
----------------- -----------------
Time Charter Equivalent 39,077 32,350
----------------- -----------------
Time Charter Equivalent
Adjusted Reconciliation
----------------- -----------------
Time Charter Revenues 44,346,386 37,120,851
----------------- -----------------
Less Voyage Expenses 12,563 (185,515)
----------------- -----------------
Less Commission (2,350,660) (1,899,856)
----------------- -----------------
Total Revenue, net of voyage expenses 42,008,289 35,035,480
----------------- -----------------
Less Amortization of Below Market
Acquired Time Charters (5,308,086) (4,703,848)
----------------- -----------------
Total Revenue, net of voyage expenses
Adjusted 36,700,203 30,331,632
----------------- -----------------
Total available days 1,075 1,083
----------------- -----------------
Time Charter Equivalent Adjusted 34,140 28,007
----------------- -----------------
Year Ended Year Ended
December 31, 2008 December 31, 2009
----------------- -----------------
Time Charter Revenues 169,301,675 161,111,782
----------------- -----------------
Less Voyage Expenses (461,265) (397,657)
----------------- -----------------
Less Commission (8,164,029) (8,364,661)
----------------- -----------------
Total Revenue, net of voyage expenses 160,676,381 152,349,464
----------------- -----------------
Total available days 4,074 4,322
----------------- -----------------
Time Charter Equivalent 39,439 35,250
----------------- -----------------
Time Charter Equivalent
Adjusted Reconciliation
----------------- -----------------
Time Charter Revenues 169,301,675 161,111,782
----------------- -----------------
Less Voyage Expenses (461,265) (397,657)
----------------- -----------------
Less Commission (8,164,029) (8,364,661)
----------------- -----------------
Total Revenue, net of voyage expenses 160,676,381 152,349,464
----------------- -----------------
Less Amortization of Below Market
Acquired Time Charters (26,559,089) (18,618,699)
----------------- -----------------
Total Revenue, net of voyage expenses
Adjusted 134,117,292 133,730,765
----------------- -----------------
Total available days 4,074 4,322
----------------- -----------------
Time Charter Equivalent Adjusted 32,920 30,942
----------------- -----------------
PARAGON SHIPPING INC.
Condensed Cash Flow Information
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, 2008 December 31, 2009
Cash and Cash Equivalents,
beginning of year 31,328,637 68,441,752
Cash Provided by / (used in):
Operating Activities 83,474,314 80,406,754
Investing Activities (78,072,478) (40,500,000)
Financing Activities 31,711,279 25,611,672
Net increase in Cash and Cash Equivalents 37,113,115 65,518,426
Cash and Cash Equivalents,
end of period 68,441,752 133,960,178
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
Quarter Ended Quarter Ended
December 31, 2008 December 31, 2009
----------------- -----------------
Net Income 9,955,122 12,700,593
----------------- -----------------
Plus Net Interest expense 3,970,224 1,482,756
----------------- -----------------
Plus Depreciation 8,742,360 8,210,208
----------------- -----------------
EBITDA 22,667,706 22,393,557
----------------- -----------------
Adjusted EBITDA Reconciliation
----------------- -----------------
Net Income 9,955,122 12,700,593
----------------- -----------------
Non-cash revenue, depreciation and
write off due to below market
acquired time charters (4,613,062) (4,557,042)
----------------- -----------------
Vessel fair value gain - (654,570)
----------------- -----------------
Unrealized loss/(gain) from interest
rate swaps 8,535,229 (1,373,140)
----------------- -----------------
Non-cash expenses from the
amortization of share based
compensation cost recognized and
share based compensation to the
management company 134,241 2,443,486
----------------- -----------------
Adjusted Net Income 14,011,530 8,559,327
----------------- -----------------
Plus Net Interest expense 3,970,224 1,482,756
----------------- -----------------
Plus Depreciation (2) 8,047,336 7,514,383
----------------- -----------------
Adjusted EBITDA 26,029,090 17,556,466
----------------- -----------------
Year Ended Year Ended
December 31, 2008 December 31, 2009
----------------- -----------------
Net Income 69,229,461 65,678,614
----------------- -----------------
Plus Net Interest expense 13,969,098 10,329,279
----------------- -----------------
Plus Depreciation 32,874,632 33,814,863
----------------- -----------------
EBITDA 116,073,191 109,822,756
----------------- -----------------
Adjusted EBITDA Reconciliation
----------------- -----------------
Net Income 69,229,461 65,678,614
----------------- -----------------
Non-cash revenue, depreciation and
write off due to below market
acquired time charters (23,792,213) (16,408,730)
----------------- -----------------
Impairment loss - 6,005,000
----------------- -----------------
Unrealized loss/(gain) from interest
rate swaps 10,284,441 (3,367,354)
----------------- -----------------
Non-cash expenses from the
amortization of share based
compensation cost recognized and
share based compensation to the
management company 522,662 3,101,691
----------------- -----------------
Adjusted Net Income 56,244,351 55,009,221
----------------- -----------------
Plus Net Interest expense 13,969,098 10,329,279
----------------- -----------------
Plus Depreciation (2) 30,107,757 31,055,875
----------------- -----------------
Adjusted EBITDA 100,321,206 96,394,375
----------------- -----------------
(1) Paragon Shipping Inc. considers EBITDA to represent net income plus net
interest expense and depreciation and amortization. The Company's
management uses EBITDA as a performance measure. The Company believes that
EBITDA is useful to investors because the shipping industry is capital
intensive and may involve significant financing costs. EBITDA is not an
item recognized by GAAP and should not be considered as an alternative to
net income, operating income or any other indicator of a Company's
operating performance required by GAAP. The Company's definition of EBITDA
may not be the same as that used by other companies in the shipping or
other industries. The Company excluded non-cash items to derive the
adjusted net income and the adjusted EBITDA because the Company believes
that the non-cash items do not reflect fairly the fleet operational
results.
(2) Excludes a portion of depreciation charged on purchase price adjustment
allocated to vessel cost for vessels acquired with below market charters.
Reconciliation of GAAP Financial Information
to Non-GAAP Financial Information
(Expressed in United States Dollars)
Quarter Ended Quarter Ended
GAAP Financial Information December 31, 2008 December 31, 2009
----------------- -----------------
Net Income 9,955,122 12,700,593
----------------- -----------------
Weighted average number of Class A
common shares basic 27,038,015 47,547,627
----------------- -----------------
Weighted average number of Class A
common shares diluted 27,038,015 47,547,627
----------------- -----------------
Earnings per Class A common shares
basic 0.37 0.26
----------------- -----------------
Earnings per Class A common shares
diluted 0.37 0.26
----------------- -----------------
Reconciliation of Net Income to
Adjusted Net Income
----------------- -----------------
Net Income 9,955,122 12,700,593
----------------- -----------------
Non-cash revenue, depreciation and
write off due to below market
acquired time charters (4,613,062) (4,557,042)
----------------- -----------------
Vessel fair value gain - (654,570)
----------------- -----------------
Unrealized loss/(gain) from interest
rate swaps 8,535,229 (1,373,140)
----------------- -----------------
Non-cash expenses from the
amortization of compensation cost
recognized and share based
compensation to the management
company 134,241 2,443,486
----------------- -----------------
Adjusted Net Income 14,011,530 8,559,327
----------------- -----------------
Weighted average number of common
shares basic 27,038,015 47,547,627
----------------- -----------------
Weighted average number of common
shares diluted 27,038,015 47,547,627
----------------- -----------------
Adjusted earnings per share basic (1) 0.52 0.17
----------------- -----------------
Adjusted earnings per share diluted
(1) 0.52 0.17
----------------- -----------------
(1) Adjusted earnings per share is not an item recognized by GAAP and
should not be considered as an alternative to Earnings per share or any
other indicator of a Company's operating performance required by GAAP. The
Company excluded non-cash items to derive at the adjusted net income and
the adjusted earnings per share basic and diluted because the Company
believes that these non-cash items do not reflect fairly the fleet
operational results.
Reconciliation of GAAP Financial Information
to Non-GAAP Financial Information
(Expressed in United States Dollars)
Year Ended Year Ended
GAAP Financial Information December 31, 2008 December 31, 2009
----------------- -----------------
Net Income 69,229,461 65,678,614
----------------- -----------------
Weighted average number of Class A
common shares basic 26,819,923 38,026,523
----------------- -----------------
Weighted average number of Class A
common shares diluted 27,010,013 38,026,523
----------------- -----------------
Earnings per Class A common shares
basic 2.58 1.69
----------------- -----------------
Earnings per Class A common shares
diluted 2.56 1.69
----------------- -----------------
Reconciliation of Net Income to
Adjusted Net Income
----------------- -----------------
Net Income 69,229,461 65,678,614
----------------- -----------------
Non-cash revenue, depreciation and
write off due to below market
acquired time charters (23,792,213) (16,408,730)
----------------- -----------------
Impairment loss - 6,005,000
----------------- -----------------
Unrealized loss/(gain) from interest
rate swaps 10,284,441 (3,367,354)
----------------- -----------------
Non-cash expenses from the
amortization of compensation cost
recognized and share based
compensation to the management
company 522,662 3,101,691
----------------- -----------------
Adjusted Net Income 56,244,351 55,009,221
----------------- -----------------
Weighted average number of common
shares basic 26,819,923 38,026,523
----------------- -----------------
Weighted average number of common
shares diluted 27,010,013 38,026,523
----------------- -----------------
Adjusted earnings per share basic (1) 2.10 1.42
----------------- -----------------
Adjusted earnings per share diluted
(1) 2.08 1.42
----------------- -----------------
(1) Adjusted earnings per share is not an item recognized by GAAP and
should not be considered as an alternative to Earnings per share or any
other indicator of a Company's operating performance required by GAAP. The
Company excluded non-cash items to derive at the adjusted net income and
the adjusted earnings per share basic and diluted because the Company
believes that these non-cash items do not reflect fairly the fleet
operational results.
Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2008 and December 31, 2009
(Expressed in United States Dollars)
December 31, December 31,
2008 2009
Assets
Current assets
Cash and cash equivalents 68,441,752 133,960,178
Restricted cash - 31,000,000
Assets held for sale - 18,050,402
Trade receivables 372,965 2,187,039
Other receivables 1,209,230 2,233,809
Prepaid expenses 379,140 464,804
Due from management company 985,960 1,231,879
Inventories 885,665 921,325
------------ ------------
Total current assets 72,274,712 190,049,436
------------ ------------
Fixed assets
Vessels at cost 713,373,186 683,721,898
Less: accumulated depreciation (51,142,696) (78,989,341)
Other fixed assets - 51,718
------------ ------------
Total fixed assets 662,230,490 604,784,275
------------ ------------
Other assets 1,787,988 1,380,577
Restricted cash 6,010,000 15,510,000
Above market acquired time charters 43,304 -
Other long-term receivables 74,760 968,560
------------ ------------
Total Assets 742,421,254 812,692,848
------------ ------------
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable (including balance due
to a related party of $500 and $17,300 as of
December 31, 2008 and December 31, 2009
respectively) 2,538,796 1,951,695
Accrued expenses and dividends payable 4,098,929 2,416,524
Interest rate swaps 6,407,751 6,820,289
Deferred income 3,024,423 3,701,832
Current portion of long-term debt 53,150,000 39,200,000
Liability associated with vessel held for
sale - 24,900,000
------------ ------------
Total current liabilities 69,219,899 78,990,340
------------ ------------
Long-Term Liabilities
Long-term debt 334,335,000 270,235,000
Deferred income 703,863 461,390
Interest rate swaps 5,247,391 1,467,499
Below market acquired time charters 24,483,822 5,272,801
------------ ------------
Total long-term liabilities 364,770,076 277,436,690
------------ ------------
Total Liabilities 433,989,975 356,427,030
------------ ------------
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par value; 25,000,000
authorized, none issued, none outstanding at
December 31, 2008 and December 31, 2009 - -
Class A common shares, $0.001 par value;
120,000,000 authorized 27,138,515 issued and
outstanding at December 31, 2008 and
51,189,033 issued and outstanding at
December 31, 2009 27,139 51,189
Class B common shares, $0.001 par value;
5,000,000 authorized, none issued and
outstanding at December 31, 2008 and
December 31, 2009 - -
Additional paid-in capital 318,515,490 408,619,010
Accumulated (deficit)/earnings (10,111,350) 47,595,619
------------ ------------
Total shareholders' equity 308,431,279 456,265,818
------------ ------------
Total Liabilities and Shareholders' Equity 742,421,254 812,692,848
------------ ------------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Income
For the three months ended December 30, 2008 and 2009
(Expressed in United States Dollars)
Three Months Three Months
Ended Ended
December 31, December 31,
2008 2009
Revenue
Time charter revenue (including amortization of
below and above market acquired time charters
of $5,308,086 and $4,703,848 for the three
months ended December 31, 2008 and 2009,
respectively) 44,346,386 37,120,851
Less: commissions 2,350,660 1,899,856
------------ ------------
Net Revenue 41,995,726 35,220,995
------------ ------------
Expenses/(Income)
Voyage expenses (12,563) 185,515
Vessels operating expenses (including expenses
charged by a related party of $30,900 and
$49,800 for the three months ended
December 31, 2008 and 2009, respectively) 5,082,367 5,210,933
Dry-docking expenses 863,369 627,230
Management fees charged by a related party
(including share based compensation of $0
and $762,732 for the three months ended
December 31, 2008 and 2009, respectively) 904,513 1,699,244
Depreciation 8,742,360 8,210,208
General and administrative expenses (including
share based compensation of $134,241 and
$1,680,754 for the three months ended
December 31, 2008 and 2009, respectively) 3,655,761 5,611,591
Vessel fair value gain - (654,570)
Gain from vessel early redelivery - (549,019)
------------ ------------
Operating Income 22,759,919 14,879,863
------------ ------------
Other Income/(Expenses)
Interest and finance costs (4,495,786) (1,971,147)
Loss on interest rate swaps (8,770,233) (690,507)
Interest income 525,562 488,391
Foreign currency loss (64,340) (6,007)
------------ ------------
Total Other Expenses, net (12,804,797) (2,179,270)
------------ ------------
Net Income 9,955,122 12,700,593
Earnings per Class A common share, basic $ 0.37 $ 0.26
Earnings per Class A common share, diluted $ 0.37 $ 0.26
Weighted average number of Class A common
shares, basic 27,038,015 47,547,627
Weighted average number of Class A common
shares, diluted 27,038,015 47,547,627
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Income
For the year ended December 31, 2008 and 2009
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, December 31,
2008 2009
Revenue
Time charter revenue (including amortization of
below and above market acquired time charters
of $26,559,089 and $18,618,699 for the year
ended December 31, 2008 and 2009,
respectively) 169,301,675 161,111,782
Less: commissions 8,164,029 8,364,661
------------ ------------
Net Revenue 161,137,646 152,747,121
------------ ------------
Expenses/(Income)
Voyage expenses 461,265 397,657
Vessels operating expenses (including expenses
charged by a related party of $122,143 and
$194,900 for the year ended December 31,
2008 and 2009, respectively) 19,016,375 20,034,664
Dry-docking expenses 2,792,710 715,308
Management fees charged by a related party
(including share based compensation of $0
and $762,732 for the year ended December 31,
2008 and 2009, respectively) 3,536,240 4,362,908
Depreciation 32,874,632 33,814,863
General and administrative expenses (including
share based compensation of $522,662 and
$2,338,959 for the year ended December 31,
2008 and 2009, respectively) 7,773,828 8,949,096
Impairment loss - 6,005,000
Gain from vessels early redelivery - (800,874)
------------ ------------
Operating Income 94,682,596 79,268,499
------------ ------------
Other Income/(Expenses)
Interest and finance costs (15,840,197) (11,379,241)
Loss on interest rate swaps (11,378,999) (3,239,236)
Interest income 1,871,099 1,049,962
Foreign currency loss (105,038) (21,370)
------------ ------------
Total Other Expenses, net (25,453,135) (13,589,885)
------------ ------------
Net Income 69,229,461 65,678,614
Earnings per Class A common share, basic $ 2.58 $ 1.69
Earnings per Class A common share, diluted $ 2.56 $ 1.69
Weighted average number of Class A common
shares, basic 26,819,923 38,026,523
Weighted average number of Class A common
shares, diluted 27,010,013 38,026,523
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Shareholders' Equity
For the year ended December 31, 2009
(Expressed in United States Dollars, except for number of shares)
Class A Shares
-------------------
Additional Accumulated
Number of Par Paid-in (Deficit)/
Shares Value Capital Earnings Total
------------ ------ ----------- ----------- -----------
Balance January
1, 2009 27,138,515 27,139 318,515,490 (10,111,350) 308,431,279
------------ ------ ----------- ----------- -----------
Issuance of Class
A common shares,
non-vested
shares awards
and share based
compensation 24,050,518 24,050 90,103,520 90,127,570
Dividends paid on
Class A common
shares (0.20 per
share) (7,971,645) (7,971,645)
Net Income 65,678,614 65,678,614
------------ ------ ----------- ----------- -----------
Balance December
31, 2009 51,189,033 51,189 408,619,010 47,595,619 456,265,818
------------ ------ ----------- ----------- -----------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
For the year ended December 31, 2008 and 2009
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, December 31,
2008 2009
Cash flows from operating activities
Net Income 69,229,461 65,678,614
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 32,874,632 33,814,863
Impairment loss - 6,005,000
Amortization of below and above market acquired
time charters (26,559,089) (18,618,699)
Amortization of financing costs 613,629 970,327
Gain on time charter agreement
termination - (549,019)
Share based compensation 522,662 3,101,691
Unrealized loss/(gain) on interest rate
swaps 10,284,441 (3,367,354)
Changes in assets and liabilities
Increase in trade receivables (18,811) (1,814,074)
Increase in other receivables (921,684) (1,024,579)
Decrease / (Increase) in prepaid
expenses 275,436 (85,664)
Increase in inventories (84,292) (407,992)
Increase in due from management company (985,960) (245,919)
Decrease / (Increase) in other long term
receivables 1,265,842 (893,800)
Increase / (Decrease) in trade accounts
payable 51,505 (638,819)
Decrease in accrued expenses (1,395,502) (1,952,758)
Decrease in due to management company (1,642,805) -
(Decrease) / Increase in deferred
income (35,151) 434,936
------------ ------------
Net cash from operating activities 83,474,314 80,406,754
------------ ------------
Cash flow from Investing Activities
Acquisition of vessels and attached charter
party and capital expenditures (80,072,478) -
Repayment of restricted cash 3,000,000 -
Increase in restricted cash (1,000,000) (40,500,000)
------------ ------------
Net cash used in investing activities (78,072,478) (40,500,000)
------------ ------------
Cash flows from financing activities
Proceeds from long-term debt 111,500,000 30,000,000
Repayment of long-term debt (42,015,000) (83,150,000)
Payment of financing costs (816,667) (292,563)
Proceeds from the issuance of Class A common
shares - 90,088,172
Proceeds from the issuance of Class A common
shares from the exercise of warrants and
options 13,585,250 -
Class A common share offering costs - (3,062,292)
Dividends paid (50,542,304) (7,971,645)
------------ ------------
Net cash from financing activities 31,711,279 25,611,672
------------ ------------
Net increase in cash and cash equivalents 37,113,115 65,518,426
Cash and cash equivalents at the beginning of
the period 31,328,637 68,441,752
------------ ------------
Cash and cash equivalents at the end of the
period 68,441,752 133,960,178
------------ ------------
Supplemental disclosure of cash flow
information
Cash paid during the period for
interest 13,606,475 11,961,768