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SOURCE: Paragon Shipping Inc.
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March 01, 2011 16:05 ET
Paragon Shipping Inc. Reports Fourth Quarter and Year Ended December 31, 2010 Results
ATHENS, GREECE--(Marketwire - March 1, 2011) - Paragon Shipping Inc. (NYSE: PRGN), or the
Company, a global shipping transportation company specializing in drybulk
cargoes and containers, announced today its results for the fourth quarter
and year ended December 31, 2010.
Commenting on the results, Michael Bodouroglou, Chairman and Chief
Executive Officer of Paragon Shipping, stated, "We are pleased to announce
yet another set of profitable quarterly and annual results. Our 4th
consecutive profitable year of operations underlines our commitment to
management strategies that provide consistency in corporate stability and
growth. Despite the weakening chartering market and the depressed worldwide
economic environment that we have had to face and are still facing, our
Company maintains its strong position. Our Company's Board of Directors
decided to declare a quarterly dividend of $0.05 per share, payable on or
about March 24, 2011 to shareholders of record as of the close of business
on March 14, 2011. Including our latest declaration, Paragon will have
distributed $0.20 per share in dividends since the beginning of 2010,
which, based on our current stock price, represents an annual dividend
yield of 6.5%."
Mr. Bodouroglou concluded, "Paragon steps with the right foot into 2011, a
year that has already been titled by various sources as one of the most
challenging ones in recent shipping history. In 2010, we set the basis for
a stable financial position. As a result of our chartering strategy, we
have managed to provide our shareholders with visible cash flows. Due to
our fleet renewal policy we improved the average age of our fleet from 8.4
years at the end of 2009, to 6.6 years as of today. Taking advantage of
favorable conditions in the asset market, we entered into 7 newbuilding
agreements at competitive prices and have secured favorable financing for
these vessels. Furthermore, we diversified our operations into the
containership sector with our two accretive acquisitions, the Box Voyager
and the Box Trader. Paragon remains committed to excellence and sustainable
growth."
Fourth Quarter 2010 Financial Results:
Time charter revenue for the fourth quarter of 2010 was $28.7 million,
compared to $37.1 million for the fourth quarter of 2009. The Company
reported net income of $2.3 million, or $0.04 per basic and diluted share
for the fourth quarter of 2010, calculated on 50,796,008 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 2009, the Company reported net income of $12.7 million, or $0.26
per basic and diluted share, calculated on 47,547,627 weighted average
number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the
fourth quarter of 2010 was $4.1 million, or $0.08 per basic and diluted
share. This compares to adjusted net income of $8.6 million, or $0.17 per
basic and diluted share for the fourth quarter of 2009. Please refer to the
table at the back of this 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 $13.9 million for the fourth quarter of 2010, compared to $22.4
million for the fourth quarter of 2009. This was calculated by adding to
net income of $2.3 million for the fourth quarter of 2010, net interest
expense and depreciation that in the aggregate amounted to $11.6 million
for the fourth quarter of 2010. Adjusted EBITDA, excluding all non-cash
items described below, was $15.0 million for the fourth quarter of 2010,
compared to $17.6 million for the fourth quarter of 2009. Please see the
table at the back of this release for a reconciliation of EBITDA and
Adjusted EBITDA to net income.
The Company operated an average of 13.1 vessels during the fourth quarter
of 2010, earning an average time charter equivalent rate, or TCE rate, of
$23,053 per day, compared to an average of 12.0 vessels during the fourth
quarter of 2009, earning an average TCE rate of $32,350 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 2010 were $10.8
million, or approximately $8,921 per day, including vessel operating
expenses, management fees, general and administrative expenses and
drydocking costs, but excluding $3.4 million of share-based compensation
for the period. For the fourth quarter of 2009, total adjusted operating
expenses 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.
Fourth Quarter 2010 Non-cash Items
The Company's results for the three months ended December 31, 2010 included
the following non-cash items:
-- Depreciation expense of $0.7 million, or $0.01 per basic and diluted
share, associated with below market time charters attached to vessels
acquired, which increases depreciation expense (amortized over the
remaining useful life of the vessel).
-- Gain on sale of MV Clean Seas of $0.2 million, or $0.01 per basic and
diluted share.
-- An unrealized gain from interest rate swaps of $2.1 million, or $0.04
per basic and diluted share.
-- Non-cash expenses of $3.4 million, or $0.07 per basic and diluted
share, relating to the amortization of the compensation cost recognized
for non-vested share 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 decreased net income by $1.8
million, which represents a $0.04 decrease in earnings per basic and
diluted share, for the three months ended December 31, 2010.
Dividend Declared
The Company's Board of Directors declared a quarterly dividend of $0.05 per
share with respect to the fourth quarter of 2010, payable on or about March
24, 2011 to shareholders of record as of the close of business on March 14,
2011.
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping Inc. mainly
employs vessels under fixed rate time charters for periods ranging from one
to five years. Assuming all charter options are exercised but excluding the
newbuilding vessels which are under construction, the Company has secured
under such contracts 98%, 55% and 25% of its fleet capacity in 2011, 2012
and 2013, respectively (which includes 8%, 8% and 7% in 2011, 2012 and
2013, respectively, relating to our charter contract with Korea Line
Corporation).
Cash Flows
For the year ended December 31, 2010, the Company generated net cash from
operating activities of $60.6 million, compared to $80.4 million for the
year ended December 31, 2009. For the year ended December 31, 2010, net
cash used in investing activities was $142.2 million and net cash used in
financing activities was $17.6 million. 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.
Financing Update
On February 25, 2011, we entered into commitment for a new $135.0 million
senior secured amortizing credit facility with a syndicate of major
European banks to fully-finance our current outstanding newbuilding program
commitments. Under the terms of the commitment, amounts borrowed under the
new facility will bear interest at LIBOR, plus a margin of 2.75%. The
six-year facility is still subject to the execution of definitive
documentation.
Year ended December 31, 2010 Financial Results:
Time charter revenue for the year ended December 31, 2010, was $118.4
million, compared to $161.1 million for the year ended December 31, 2009.
The Company reported net income of $22.9 million, or $0.44 per basic and
diluted share for the year ended December 31, 2010, calculated on
49,812,716 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, 2009, the Company reported net
income of $65.7 million, or $1.69 per basic and diluted share, calculated
on 38,026,523 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the
year ended December 31, 2010, was $27.7 million, or $0.54 per basic and
diluted share. This compares to adjusted net income of $55.0 million, or
$1.42 per basic and diluted share for the year ended December 31, 2009.
Please refer to the table at the back of this 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 $66.5 million for the year ended December 31, 2010, compared to
$109.8 million for the year ended December 31, 2009. This was calculated by
adding to net income of $22.9 million for the year ended December 31, 2010,
net interest expense and depreciation that in the aggregate amounted to
$43.6 million for the year ended December 31, 2010. Adjusted EBITDA,
excluding all non-cash items described below, was $68.6 million for the
year ended December 31, 2010, compared to $96.4 million for the year ended
December 31, 2009. Please see the table at the back of this release for a
reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated 12.1 vessels during the year ended December 31, 2010,
earning an average TCE rate of $25,911 per day, compared to an average of
12.0 vessels during the year ended December 31, 2009, earning an average
TCE rate of $35,250 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, 2010,
were $33.9 million, or approximately $7,680 per day, including vessel
operating expenses, management fees, general and administrative expenses
and dry-docking costs, but excluding $10.7 million of share-based
compensation for the period. For the year ended December 31, 2009, total
adjusted operating expenses were $31.0 million, or approximately $7,069 per
day, including vessel operating expenses, management fees and general and
administrative expenses and drydocking costs, but excluding $3.1 million of
share-based compensation.
Year ended December 31, 2010 Non-cash Items
The Company's results for the year ended December 31, 2010, included the
following non-cash items:
-- Non-cash revenue of $5.3 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),
respectively. These non-cash items contributed an aggregate of
$2.5 million to net income, or $0.05 to basic and diluted earnings per
share.
-- Gain on sale of MV Blue Seas and MV Clean Seas of $0.5 million in the
aggregate, or $0.01 per basic and diluted share.
-- An unrealized gain from interest rate swaps of $2.9 million, or $0.06
per basic and diluted share, respectively.
-- Non-cash expenses of $10.7 million, or $0.21 per basic and diluted
share, relating to the amortization of the compensation cost recognized
for restricted common shares issued to executive officers, directors
and employees and related to share based compensation to the management
company.
In the aggregate, these non-cash items decreased net income by $4.8
million, which represents a $0.10 decrease in earnings per basic and
diluted share, for the year ended December 31, 2010.
Conference Call and Webcast:
The Company's management will host a conference call to discuss its fourth
quarter and year ended December 31, 2010 results on March 2, 2011 at 10:00
am 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 9, 2011. 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 in 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 and
containers. The Company's current fleet consists of eleven drybulk vessels
with a total carrying capacity of 747,994 dwt and two containerships with a
total carrying capacity of 6,852 TEU.
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 tables represent our drybulk fleet and the newbuilding
vessels that we have agreed to acquire, as well as our containership fleet
as of March 1, 2011.
Drybulk Fleet
Name Type Dwt Year Built
---------- ---------- ---------- ----------
Panamax
Dream Seas Panamax 75,151 2009
---------- ---------- ----------
Coral Seas Panamax 74,477 2006
---------- ---------- ----------
Golden Seas Panamax 74,475 2006
---------- ---------- ----------
Pearl Seas Panamax 74,483 2006
---------- ---------- ----------
Diamond Seas Panamax 74,274 2001
---------- ---------- ----------
Deep Seas Panamax 72,891 1999
---------- ---------- ----------
Calm Seas Panamax 74,047 1999
---------- ---------- ----------
Kind Seas Panamax 72,493 1999
---------- ---------- ----------
Total Panamax 8 592,291
---------- ---------- ----------
Supramax
Friendly Seas Supramax 58,779 2008
---------- ---------- ----------
Sapphire Seas Supramax 53,702 2005
---------- ---------- ----------
Total Supramax 2 112,481
---------- ---------- ----------
Handymax
---------- ---------- ----------
Crystal Seas Handymax 43,222 1995
---------- ---------- ----------
Total Handymax 1 43,222
---------- ---------- ----------
Grand Total 11 747,994
---------- ---------- ----------
Containership Fleet
Name TEU Dwt Year Built
------------ ---------- ---------- ----------
Box Voyager 3,426 42,650 2010
---------- ---------- ----------
Box Trader 3,426 42,650 2010
---------- ---------- ----------
Total 6,852 85,300
---------- ---------- ----------
Newbuildings that we have agreed to acquire
Expected
Name Type Dwt Delivery
------------ ---------- ---------- ----------
Kamsarmax
Hull no. 619 Kamsarmax 82,000 2012
---------- ---------- ----------
Hull no. 622 Kamsarmax 82,000 2012
---------- ---------- ----------
Hull no. 624 Kamsarmax 82,000 2012
---------- ---------- ----------
Total Panamax 3 246,000
---------- ---------- ----------
Handysize
Hull no. 604 Handysize 37,200 2011
---------- ---------- ----------
Hull no. 605 Handysize 37,200 2011
---------- ---------- ----------
Hull no. 612 Handysize 37,200 2012
---------- ---------- ----------
Hull no. 625 Handysize 37,200 2012
---------- ---------- ----------
Total Handymax 4 148,800
---------- ---------- ----------
Grand Total 7 394,800
---------- ---------- ----------
Summary Fleet Data
Quarter Quarter
Ended Ended
December 31, December 31,
2009 2010
------------ ------------
FLEET DATA
Average number of vessels (1) 12.0 13.1
------------ ------------
Available days for fleet (2) 1,083 1,169
------------ ------------
Calendar days for fleet (3) 1,104 1,208
------------ ------------
Fleet utilization (4) 98% 97%
------------ ------------
AVERAGE DAILY RESULTS
Time charter equivalent (5) 32,350 23,053
------------ ------------
Time charter equivalent
adjusted (5) 28,007 23,053
------------ ------------
Vessel operating expenses (6) 4,720 4,585
------------ ------------
Drydocking expenses (7) 568 486
------------ ------------
Management fees adjusted (8) 848 989
------------ ------------
General and administrative expenses
adjusted (9) 3,561 2,861
------------ ------------
Total vessel operating expenses adjusted (10) 9,697 8,921
------------ ------------
Year Ended Year Ended
December 31, December 31,
2009 2010
------------ ------------
FLEET DATA
Average number of vessels (1) 12.0 12.1
------------ ------------
Available days for fleet (2) 4,322 4,295
------------ ------------
Calendar days for fleet (3) 4,380 4,419
------------ ------------
Fleet utilization (4) 99% 97%
------------ ------------
AVERAGE DAILY RESULTS
Time charter equivalent (5) 35,250 25,911
------------ ------------
Time charter equivalent
adjusted (5) 30,942 24,683
------------ ------------
Vessel operating expenses (6) 4,574 4,520
------------ ------------
Drydocking expenses (7) 163 596
------------ ------------
Management fees adjusted (8) 822 920
------------ ------------
General and administrative expenses
adjusted (9) 1,510 1,644
------------ ------------
Total vessel operating expenses adjusted (10) 7,069 7,680
------------ ------------
(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
off-hire days for 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 adjustments provide additional
information on 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 share 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 share awards and share based
compensation to the management company have been excluded.
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
Quarter Quarter
Ended Ended
December 31, December 31,
2009 2010
------------ ------------
Time Charter Revenues 37,120,851 28,744,697
------------ ------------
Less Voyage Expenses (185,515) (166,872)
------------ ------------
Less Commission (1,899,856) (1,628,521)
------------ ------------
Total Revenue, net of voyage expenses 35,035,480 26,949,304
------------ ------------
Total available days 1,083 1,169
------------ ------------
Time Charter Equivalent 32,350 23,053
------------ ------------
Time Charter Equivalent Adjusted Reconciliation
Time Charter Revenues 37,120,851 28,744,697
------------ ------------
Less Voyage Expenses (185,515) (166,872)
------------ ------------
Less Commission (1,899,856) (1,628,521)
------------ ------------
Total Revenue, net of voyage expenses 35,035,480 26,949,304
------------ ------------
Less Amortization of Below Market Acquired Time
Charters (4,703,848) -
------------ ------------
Total Revenue, net of voyage expenses Adjusted 30,331,632 26,949,304
------------ ------------
Total available days 1,083 1,169
------------ ------------
Time Charter Equivalent Adjusted 28,007 23,053
------------ ------------
Year Ended Year Ended
December 31, December 31,
2009 2010
------------ ------------
Time Charter Revenues 161,111,782 118,382,601
------------ ------------
Less Voyage Expenses (397,657) (412,849)
------------ ------------
Less Commission (8,364,661) (6,682,492)
------------ ------------
Total Revenue, net of voyage expenses 152,349,464 111,287,260
------------ ------------
Total available days 4,322 4,295
------------ ------------
Time Charter Equivalent 35,250 25,911
------------ ------------
Time Charter Equivalent Adjusted Reconciliation
Time Charter Revenues 161,111,782 118,382,601
------------ ------------
Less Voyage Expenses (397,657) (412,849)
------------ ------------
Less Commission (8,364,661) (6,682,492)
------------ ------------
Total Revenue, net of voyage expenses 152,349,464 111,287,260
------------ ------------
Less Amortization of Below Market Acquired Time
Charters (18,618,699) (5,272,801)
------------ ------------
Total Revenue, net of voyage expenses Adjusted 133,730,765 106,014,459
------------ ------------
Total available days 4,322 4,295
------------ ------------
Time Charter Equivalent Adjusted 30,942 24,683
------------ ------------
PARAGON SHIPPING INC.
Condensed Cash Flow Information
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, December 31,
2009 2010
------------ ------------
Cash and Cash Equivalents,
beginning of period 68,441,752 133,960,178
------------ ------------
Cash provided by / (used in):
Operating Activities 80,406,754 60,613,801
------------ ------------
Investing Activities (40,500,000) (142,151,113)
------------ ------------
Financing Activities 25,611,672 (17,634,931)
------------ ------------
Net increase / (decrease) in Cash and Cash
Equivalents 65,518,426 (99,172,243)
------------ ------------
Cash and Cash Equivalents,
end of period 133,960,178 34,787,935
------------ ------------
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
Quarter Quarter
Ended Ended
December 31, December 31,
2009 2010
------------ ------------
Net Income 12,700,593 2,297,481
------------ ------------
Plus Net Interest expense 1,482,756 2,635,111
------------ ------------
Plus Depreciation 8,210,208 8,949,138
------------ ------------
EBITDA 22,393,557 13,881,730
------------ ------------
Adjusted EBITDA Reconciliation
Net Income 12,700,593 2,297,481
------------ ------------
Non-cash revenue, depreciation and write off
due to below market acquired time charters (4,557,042) 695,825
------------ ------------
Vessel fair value gain (654,570) -
------------ ------------
Profit on sale of vessel - (212,993)
------------ ------------
Unrealized gain from interest rate swaps (1,373,140) (2,062,995)
------------ ------------
Non-cash expenses from the amortization of
share based compensation cost recognized and
share based compensation to the management
company 2,443,486 3,391,596
------------ ------------
Adjusted Net Income 8,559,327 4,108,914
------------ ------------
Plus Net Interest expense 1,482,756 2,635,111
------------ ------------
Plus Depreciation (2) 7,514,383 8,253,313
------------ ------------
Adjusted EBITDA 17,556,466 14,997,338
------------ ------------
Year Ended Year Ended
December 31, December 31,
2009 2010
------------ ------------
Net Income 65,678,614 22,895,280
------------ ------------
Plus Net Interest expense 10,329,279 9,913,808
------------ ------------
Plus Depreciation 33,814,863 33,719,712
------------ ------------
EBITDA 109,822,756 66,528,800
------------ ------------
Adjusted EBITDA Reconciliation
Net Income 65,678,614 22,895,280
------------ ------------
Non-cash revenue, depreciation and write off
due to below market acquired time charters (16,408,730) (2,512,292)
------------ ------------
Impairment loss 6,005,000 -
------------ ------------
Profit on sale of vessel - (475,483)
------------ ------------
Unrealized gain from interest rate swaps (3,367,354) (2,872,337)
------------ ------------
Non-cash expenses from the amortization of
share based compensation cost recognized and
share based compensation to the management
company 3,101,691 10,687,663
------------ ------------
Adjusted Net Income 55,009,221 27,722,831
------------ ------------
Plus Net Interest expense 10,329,279 9,913,808
------------ ------------
Plus Depreciation (2) 31,055,875 30,959,203
------------ ------------
Adjusted EBITDA 96,394,375 68,595,842
------------ ------------
(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 these adjustments provide
additional information on 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 Quarter
Ended Ended
December 31, December 31,
GAAP Financial Information 2009 2010
------------ ------------
Net Income 12,700,593 2,297,481
------------ ------------
Income attributable to non-vested share awards (571,819) (104,912)
------------ ------------
Net Income available to common shareholders 12,128,774 2,192,569
------------ ------------
Weighted average number of Class A common
shares basic and diluted 47,547,627 50,796,008
------------ ------------
Earnings per Class A common shares basic and
diluted 0.26 0.04
------------ ------------
Reconciliation of Net Income to Adjusted Net
Income
------------ ------------
Net Income 12,700,593 2,297,481
------------ ------------
Non-cash revenue, depreciation and write off
due to below market acquired time charters (4,557,042) 695,825
------------ ------------
Vessel fair value gain (654,570) -
------------ ------------
Profit on sale of vessel - (212,993)
------------ ------------
Unrealized gain from interest rate swaps (1,373,140) (2,062,995)
------------ ------------
Non-cash expenses from the amortization of
compensation cost recognized and share based
compensation to the management company 2,443,486 3,391,596
------------ ------------
Adjusted Net Income 8,559,327 4,108,914
------------ ------------
Income attributable to non-vested share awards (385,367) (187,629)
------------ ------------
Adjusted Net Income available to common
shareholders 8,173,960 3,921,285
------------ ------------
Weighted average number of common shares basic
and diluted 47,547,627 50,796,008
------------ ------------
Adjusted earnings per share basic and
diluted(1) 0.17 0.08
------------ ------------
(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 adjustments provide additional
information on the fleet operational results.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, December 31,
GAAP Financial Information 2009 2010
------------ ------------
Net Income 65,678,614 22,895,280
------------ ------------
Income attributable to non-vested share awards (1,278,992) (849,650)
------------ ------------
Net Income available to common shareholders 64,399,622 22,045,630
------------ ------------
Weighted average number of Class A common
shares basic and diluted 38,026,523 49,812,716
------------ ------------
Earnings per Class A common shares basic and
diluted 1.69 0.44
------------ ------------
Reconciliation of Net Income to Adjusted Net
Income
------------ ------------
Net Income 65,678,614 22,895,280
------------ ------------
Non-cash revenue, depreciation and write off
due to below market acquired time charters (16,408,730) (2,512,294)
------------ ------------
Impairment loss 6,005,000 -
------------ ------------
Profit on sale of vessel - (475,483)
------------ ------------
Unrealized gain from interest rate swaps (3,367,354) (2,872,337)
------------ ------------
Non-cash expenses from the amortization of
compensation cost recognized and share based
compensation to the management company 3,101,691 10,687,663
------------ ------------
Adjusted Net Income 55,009,221 27,722,829
------------ ------------
Income attributable to non-vested share awards (1,071,222) (1,028,802)
------------ ------------
Adjusted Net Income available to common
shareholders 53,937,999 26,694,027
------------ ------------
Weighted average number of common shares basic
and diluted 38,026,523 49,812,716
------------ ------------
Adjusted earnings per share basic and
diluted(1) 1.42 0.54
------------ ------------
(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 adjustments provide additional
information on the fleet operational results.
Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2009 and December 31, 2010
(Expressed in United States Dollars)
December 31, December 31,
2009 2010
Assets
Current assets
Cash and cash equivalents 133,960,178 34,787,935
Restricted cash 31,000,000 14,990,000
Assets held for sale 18,050,402 -
Trade receivables (net) 2,187,039 1,087,304
Other receivables 2,233,809 1,464,051
Prepaid expenses 464,804 528,475
Due from management company 1,231,879 1,579,192
Inventories 921,325 1,066,321
------------- -------------
Total current assets 190,049,436 55,503,278
------------- -------------
Fixed assets
Vessels, net 604,732,557 695,148,227
Advances for vessels under construction - 58,460,129
Other fixed assets, net 51,718 231,745
------------- -------------
Total fixed assets, net 604,784,275 753,840,101
------------- -------------
Other assets 1,380,577 1,922,631
Restricted cash 15,510,000 10,010,000
Other long-term receivables 968,560 -
------------- -------------
Total Assets 812,692,848 821,276,010
------------- -------------
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable (including balance due
to a related party of $17,300 and $44,625 as
of December 31, 2009 and 2010 respectively) 1,951,695 1,939,685
Accrued expenses 2,416,524 2,230,475
Interest rate swaps 6,820,289 3,881,173
Deferred income 3,701,832 2,083,034
Current portion of long-term debt 39,200,000 35,077,988
Liability associated with vessel held for sale 24,900,000 -
------------- -------------
Total current liabilities 78,990,340 45,212,355
------------- -------------
Long-Term Liabilities
Long-term debt 270,235,000 282,757,012
Deferred income 461,390 1,300,699
Interest rate swaps 1,467,499 1,534,277
Below market acquired time charters 5,272,801 -
------------- -------------
Total long-term liabilities 277,436,690 285,591,988
------------- -------------
Total Liabilities 356,427,030 330,804,343
------------- -------------
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par value; 25,000,000
authorized, none issued, none outstanding at
December 31, 2009 and 2010, respectively - -
Class A common shares, $0.001 par value;
120,000,000 and 750,000,000 authorized at
December 31, 2009 and 2010 respectively;
51,189,033 and 55,870,299 issued and outstanding
at December 31, 2009 and 2010, respectively 51,189 55,870
Class B common shares, $0.001 par value;
5,000,000 authorized none issued and outstanding
at December 31, 2009 and 2010, respectively - -
Additional paid-in capital 408,619,010 430,339,354
Retained earnings 47,595,619 60,076,443
------------- -------------
Total shareholders' equity 456,265,818 490,471,667
------------- -------------
Total Liabilities and Shareholders' Equity 812,692,848 821,276,010
------------- -------------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the three months ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Three Months Three Months
Ended Ended
December 31, December 31,
2009 2010
Revenue
Time charter revenue (including amortization of
below and above market acquired time charters of
$4,703,848 and $0 for the three months ended
December 31, 2009 and 2010, respectively) 37,120,851 28,744,697
Less: commissions (including related party
commissions of $433,030 and $366,494 for the
three months ended December 31, 2009 and 2010,
respectively) 1,899,856 1,628,521
------------ ------------
Net Revenue 35,220,995 27,116,176
------------ ------------
Expenses / (Income)
Voyage expenses 185,515 166,872
Vessels operating expenses (including expenses
charged by a related party of $49,800 and
$82,733 for the three months ended
December 31, 2009 and 2010, respectively) 5,210,933 5,539,101
Dry-docking expenses 627,230 586,802
Management fees charged by a related party
(including share based compensation of $762,732
and $226,459 for the three months ended
December 31, 2009 and 2010, respectively) 1,699,244 1,420,535
Depreciation 8,210,208 8,949,138
General and administrative expenses (including
share based compensation of $1,680,754 and
$3,165,137 for the three months ended
December 31, 2009 and 2010, respectively) 5,611,591 6,621,259
Vessel fair value gain (654,570) -
Gain on sale of assets - (212,993)
Gain from vessel early redelivery (549,019) -
------------ ------------
Operating Income 14,879,863 4,045,462
------------ ------------
Other Income / (Expenses)
Interest and finance costs (1,971,147) (2,667,205)
(Loss)/gain on derivatives (690,507) 913,457
Interest income 488,391 32,094
Foreign currency loss (6,007) (26,327)
------------ ------------
Total Other Expenses, net (2,179,270) (1,747,981)
------------ ------------
Net Income 12,700,593 2,297,481
Earnings per Class A common share, basic and
diluted $ 0.26 $ 0.04
Weighted average number of Class A common
shares, basic and diluted 47,547,627 50,796,008
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, December 31,
2009 2010
Revenue
Time charter revenue (including amortization of
below and above market acquired time charters of
$18,618,699 and $5,272,801 for the year ended
December 31, 2009 and 2010, respectively) 161,111,782 118,382,601
Less: commissions (including related party
commissions of $1,776,959 and $1,427,823 for
the year ended December 31, 2009 and 2010,
respectively) 8,364,661 6,682,492
------------ ------------
Net Revenue 152,747,121 111,700,109
------------ ------------
Expenses / (Income)
Voyage expenses 397,657 412,849
Vessels operating expenses (including expenses
charged by a related party of $194,900 and
$324,061 for the year ended December 31, 2009
and 2010, respectively) 20,034,664 19,974,806
Dry-docking expenses 715,308 2,632,479
Management fees charged by a related party
(including share based compensation of $762,732
and $226,459 for the year ended December 31,
2009 and 2010, respectively) 4,362,908 4,292,291
Depreciation 33,814,863 33,719,712
General and administrative expenses (including
share based compensation of $2,338,959 and
$10,461,204 for the year ended
December 31, 2009 and 2010, respectively) 8,949,096 17,723,987
Impairment loss 6,005,000 -
Gain on sale of assets / vessel acquisition
option - (1,064,023)
Gain on vessel early redelivery (800,874) (113,338)
------------ ------------
Operating Income 79,268,499 34,121,346
------------ ------------
Other Income / (Expenses)
Interest and finance costs (11,379,241) (10,234,928)
Loss on derivatives (3,239,236) (2,611,920)
Interest income 1,049,962 321,120
Foreign currency (loss)/gain (21,370) 1,299,662
------------ ------------
Total Other Expenses, net (13,589,885) (11,226,066)
------------ ------------
Net Income 65,678,614 22,895,280
Earnings per Class A common share, basic and
diluted $ 1.69 $ 0.44
Weighted average number of Class A common
shares, basic and diluted 38,026,523 49,812,716
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Shareholders' Equity
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars, except for number of shares)
Class A Shares
------------------
(Accumulated
Additional Deficit) /
Number of Par Paid-in Retained
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
and share based
compensation 24,051,518 24,051 90,103,519 90,127,570
Cancellation of
restricted Class
A common shares (1,000) (1) 1
Dividends
declared (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
---------- ------ ----------- ----------- -----------
Issuance of Class
A common shares,
and share based
compensation 4,689,700 4,689 21,720,336 21,725,025
Cancellation of
restricted Class
A common shares (8,434) (8) 8
Dividends
declared (0.20
per share) (10,414,456) (10,414,456)
Net Income 22,895,280 22,895,280
---------- ------ ----------- ----------- -----------
Balance December
31, 2010 55,870,299 55,870 430,339,354 60,076,443 490,471,667
---------- ------ ----------- ----------- -----------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, December 31,
2009 2010
Cash flows from operating activities
Net Income 65,678,614 22,895,280
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 33,814,863 33,719,712
Impairment loss 6,005,000 -
Profit on sale of assets / vessel acquisition
option - (1,064,023)
Amortization of below and above market acquired
time charters (18,618,699) (5,272,801)
Amortization of financing costs 970,327 907,310
Gain on vessel early redelivery (549,019) -
Share based compensation 3,101,690 10,687,663
Unrealized gain on interest rate swaps (3,367,354) (2,872,337)
Changes in assets and liabilities
Trade receivables (net) (1,814,074) 1,099,735
Other receivables (1,024,579) 769,758
Prepaid expenses (85,664) (63,671)
Inventories (407,992) (144,996)
Due from management company (245,919) (347,313)
Other long term receivables (893,800) 968,560
Trade accounts payable (638,818) (12,010)
Accrued expenses (1,952,758) 122,423
Deferred income 434,936 (779,489)
------------ ------------
Net cash from operating activities 80,406,754 60,613,801
------------ ------------
Cash flow from Investing Activities
Net proceeds from sale of assets / vessel
acquisition option - 41,556,934
Acquisition of vessels and capital expenditures - (146,551,672)
Payments for vessels under construction - (58,460,129)
Other fixed assets - (206,246)
Release of restricted cash - 23,010,000
Increase in restricted cash (40,500,000) (1,500,000)
------------ ------------
Net cash used in investing activities (40,500,000) (142,151,113)
------------ ------------
Cash flows from financing activities
Proceeds from long-term debt 30,000,000 70,000,000
Repayment of long-term debt (83,150,000) (86,500,000)
Payment of financing costs (292,563) (1,648,201)
Proceeds from the issuance of Class A common
shares (net) 87,025,880 10,927,726
Dividends paid (7,971,645) (10,414,456)
------------ ------------
Net cash from / (used in) financing activities 25,611,672 (17,634,931)
------------ ------------
Net increase / (decrease) in cash and cash
equivalents 65,518,426 (99,172,243)
Cash and cash equivalents at the beginning of
the period 68,441,752 133,960,178
------------ ------------
Cash and cash equivalents at the end of the
period 133,960,178 34,787,935
------------ ------------
Supplemental disclosure of cash flow
information
Cash paid during the period for interest 11,961,768 8,745,571
Non cash financing activities 270,353 167,737