-- Non-cash 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) for the three months ended
September 30, 2010.
-- An unrealized loss from interest rate swaps of $1.6 million, or $0.03
per basic and diluted share, for the three months ended September 30,
2010.
-- Non-cash expenses of $2.4 million, or $0.05 per basic and diluted
share, relating to the amortization for the three months ended
September 30, 2010, of the compensation cost recognized for non-vested
share awards issued to executive officers, directors and employees.
In the aggregate, these non-cash items decreased net income by $4.7
million, or $0.09 to earnings per basic and diluted share, for the three
months ended September 30, 2010.
Dividend Declared
The Company's Board of Directors declared a quarterly dividend of $0.05 per
share with respect to the third quarter of 2010, payable on or about
December 6, 2010 to shareholders of record as of the close of business on
November 26, 2010.
Recent Fleet Developments
On July 5, 2010, the Company had entered into a Memorandum of Agreement for
the sale of the M/V Clean Seas, a 1995 built Handymax drybulk carrier, to
an unrelated third party for $23.5 million less 3.5% commission. On October
12, 2010, M/V Clean Seas was delivered to its new owners. The net profit
from the sale of the vessel was $0.2 million.
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 the
remainder of 2011, in 2012 and in 2013, respectively.
Cash Flows
For the nine months ended September 30, 2010, the Company generated net
cash from operating activities of $48.6 million, compared to $62.2 million
for the nine months ended September 30, 2009. For the nine months ended
September 30, 2010, net cash used in investing activities was $184.2
million and net cash from financing activities was $6.3 million. For the
nine months ended September 30, 2009, net cash used in investing activities
was $32.8 million and net cash from financing activities was $38.1 million.
Nine months ended September 30, 2010 Financial Results:
Time charter revenue for the nine months ended September 30, 2010 was $89.6
million, compared to $124.0 million for the nine months ended September 30,
2009. The Company reported net income of $20.6 million, or $0.40 per basic
and diluted share for the nine months ended September 30, 2010, calculated
on 49,481,979 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 nine months ended September 30, 2009, the Company
reported net income of $53.0 million, or $1.50 per basic and diluted share,
calculated on 34,951,005 weighted average number of basic and diluted
shares.
Excluding all non-cash items described below, adjusted net income for the
nine months ended September 30, 2010 was $23.6 million, or $0.46 per basic
and diluted share. This compares to adjusted net income of $46.4 million,
or $1.32 per basic and diluted share for the nine months ended September
30, 2009. 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 $52.6 million for the nine months ended September 30, 2010,
compared to $87.4 million for the nine months ended September 30, 2009.
This was calculated by adding to net income of $20.6 million for the nine
months ended September 30, 2010, net interest expense and depreciation that
in the aggregate amounted to $32.0 million for the nine months ended
September 30, 2010. Adjusted EBITDA, excluding all non-cash items described
below, was $53.6 million for the nine months ended September 30, 2010,
compared to $78.8 million for the nine months ended September 30, 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 11.8 vessels during the nine months ended September
30, 2010, earning an average time charter equivalent rate, or TCE rate, of
$26,980 per day, compared to an average of 12.0 vessels during the nine
months ended September 30, 2009, earning an average time charter equivalent
rate of $36,219 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 nine months ended September 30,
2010 were $23.2 million, or approximately $7,213 per day, including vessel
operating expenses, management fees, general and administrative expenses
and dry-docking costs, but excluding $7.3 million of share-based
compensation for the period. For the nine months ended September 30, 2009,
total adjusted operating expenses were $20.3 million, or approximately
$6,183 per day, including vessel operating expenses, management fees and
general and administrative expenses and drydocking costs, but excluding
$0.7 million of share-based compensation.
Nine months ended September 30, 2010 Non-cash Items
The Company's results for the nine months ended September 30, 2010 included
the following non-cash items:
-- Non-cash revenue of $5.3 million and depreciation expense of $2.1
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 $3.2 million to net income,
or $0.06 to basic and diluted earnings per share, for the nine months
ended September 30, 2010.
-- Profit on sale of MV Blue Seas of $0.3 million, or $0.01 per basic and
diluted share.
-- An unrealized gain from interest rate swaps of $0.8 million, or $0.02
per basic and diluted share, respectively, for the nine months ended
September 30, 2010.
-- Non-cash expenses of $7.3 million, or $0.15 per basic and diluted
share, relating to the amortization for the nine months ended September
30, 2010, of the compensation cost recognized for restricted common
shares issued to executive officers, directors and employees.
In the aggregate, these non-cash items decreased net income by $3.0
million, or $0.06 to earnings per basic and diluted share, for the nine
months ended September 30, 2010.
Conference Call and Webcast:
The Company's management will host a conference call to discuss its third
quarter and nine months ended September 30, 2010 results on November 16,
2010 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 November 23, 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 and
containers. The Company's current fleet consists of eleven drybulk vessels
with a total carrying capacity of 747,994 dwt and two containership 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 November 15, 2010.
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
---------- ---------- ----------
Handymax
--------
Crystal Seas Handymax 43,222 1995
---------- ---------- ----------
Total Handymax 1 43,222
---------- ---------- ----------
Supramax
--------
Friendly Seas Supramax 58,779 2008
---------- ---------- ----------
Sapphire Seas Supramax 53,702 2005
---------- ---------- ----------
Total Supramax 2 112,481
---------- ---------- ----------
Grand Total 11 747,994
---------- ---------- ----------
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
---------- ---------- ----------
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
---------- ---------- ----------
Summary Fleet Data
Quarter Ended Quarter Ended
September 30, 2009 September 30, 2010
------------------ ------------------
FLEET DATA
----------
Average number of vessels (1) 12.0 13.1
------------------ ------------------
Available days for fleet (2) 1,097 1,180
------------------ ------------------
Calendar days for fleet (3) 1,104 1,206
------------------ ------------------
Fleet utilization (4) 99% 98%
------------------ ------------------
AVERAGE DAILY RESULTS
---------------------
Time charter equivalent (5) 34,687 22,864
------------------ ------------------
Time charter equivalent adjusted
(5) 30,399 22,864
------------------ ------------------
Vessel operating expenses (6) 4,278 4,522
------------------ ------------------
Drydocking expenses (7) 22 659
------------------ ------------------
Management fees (8) 818 931
------------------ ------------------
General and administrative expenses
adjusted (9) 865 1,038
------------------ ------------------
Total vessel operating expenses
adjusted (10) 5,983 7,150
------------------ ------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2010
------------------ ------------------
FLEET DATA
----------
Average number of vessels (1) 12.0 11.8
------------------ ------------------
Available days for fleet (2) 3,239 3,126
------------------ ------------------
Calendar days for fleet (3) 3,276 3,211
------------------ ------------------
Fleet utilization (4) 99% 97%
------------------ ------------------
AVERAGE DAILY RESULTS
---------------------
Time charter equivalent (5) 36,219 26,980
------------------ ------------------
Time charter equivalent adjusted
(5) 31,923 25,293
------------------ ------------------
Vessel operating expenses (6) 4,525 4,496
------------------ ------------------
Drydocking expenses (7) 27 637
------------------ ------------------
Management fees (8) 813 894
------------------ ------------------
General and administrative expenses
adjusted (9) 818 1,186
------------------ ------------------
Total vessel operating expenses
adjusted (10) 6,183 7,213
------------------ ------------------
(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 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.
(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 have been excluded.
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
Quarter Ended Quarter Ended
September 30, 2009 September 30, 2010
------------------ ------------------
Time Charter Revenues 40,100,204 28,736,569
------------------ ------------------
Less Voyage Expenses (26,846) (60,333)
------------------ ------------------
Less Commission (2,022,143) (1,696,816)
------------------ ------------------
Total Revenue, net of voyage
expenses 38,051,215 26,979,420
------------------ ------------------
Total available days 1,097 1,180
------------------ ------------------
Time Charter Equivalent 34,687 22,864
------------------ ------------------
Time Charter Equivalent Adjusted
Reconciliation
--------------------------------
Time Charter Revenues 40,100,204 28,736,569
------------------ ------------------
Less Voyage Expenses (26,846) (60,333)
------------------ ------------------
Less Commission (2,022,143) (1,696,816)
------------------ ------------------
Total Revenue, net of voyage
expenses 38,051,215 26,979,420
------------------ ------------------
Less Amortization of Below Market
Acquired Time Charters (4,703,848) -
------------------ ------------------
Total Revenue, net of voyage
expenses Adjusted 33,347,367 26,979,420
------------------ ------------------
Total available days 1,097 1,180
------------------ ------------------
Time Charter Equivalent Adjusted 30,399 22,864
------------------ ------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2010
------------------ ------------------
Time Charter Revenues 123,990,931 89,637,904
------------------ ------------------
Less Voyage Expenses (212,142) (245,977)
------------------ ------------------
Less Commission (6,464,805) (5,053,971)
------------------ ------------------
Total Revenue, net of voyage
expenses 117,313,984 84,337,956
------------------ ------------------
Total available days 3,239 3,126
------------------ ------------------
Time Charter Equivalent 36,219 26,980
------------------ ------------------
Time Charter Equivalent Adjusted
Reconciliation
--------------------------------
Time Charter Revenues 123,990,931 89,637,904
------------------ ------------------
Less Voyage Expenses (212,142) (245,977)
------------------ ------------------
Less Commission (6,464,805) (5,053,971)
------------------ ------------------
Total Revenue, net of voyage
expenses 117,313,984 84,337,956
------------------ ------------------
Less Amortization of Below Market
Acquired Time Charters (13,914,851) (5,272,803)
------------------ ------------------
Total Revenue, net of voyage
expenses Adjusted 103,399,133 79,065,153
------------------ ------------------
Total available days 3,239 3,126
------------------ ------------------
Time Charter Equivalent Adjusted 31,923 25,293
------------------ ------------------
PARAGON SHIPPING INC.
Condensed Cash Flow Information
(Expressed in United States Dollars)
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2010
------------------ ------------------
Cash and Cash Equivalents,
beginning of period 68,441,752 133,960,178
------------------ ------------------
Operating Activities 62,219,000 48,632,762
------------------ ------------------
Investing Activities (32,800,000) (184,244,729)
------------------ ------------------
Financing Activities 38,127,575 6,263,228
------------------ ------------------
Net increase / (decrease) in Cash
and Cash Equivalents 67,546,575 (129,348,739)
------------------ ------------------
Cash and Cash Equivalents,
end of period 135,988,327 4,611,439
------------------ ------------------
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
Quarter Ended Quarter Ended
September 30, 2009 September 30, 2010
------------------ ------------------
Net Income 17,976,781 4,132,175
------------------ ------------------
Plus Net Interest expense 2,004,378 2,797,052
------------------ ------------------
Plus Depreciation 8,405,012 8,609,539
------------------ ------------------
EBITDA 28,386,171 15,538,766
------------------ ------------------
Adjusted EBITDA Reconciliation
------------------------------
Net Income 17,976,781 4,132,175
------------------ ------------------
Non-cash revenue and depreciation
due to below market acquired time
charters (4,008,067) 695,825
------------------ ------------------
Impairment loss 654,570 -
------------------ ------------------
Unrealized loss from interest rate
swaps 160,208 1,571,978
------------------ ------------------
Non-cash expenses from the
amortization of share based
compensation cost recognized 355,546 2,449,193
------------------ ------------------
Adjusted Net Income 15,139,038 8,849,171
------------------ ------------------
Plus Net Interest expense 2,004,378 2,797,052
------------------ ------------------
Plus Depreciation (2) 7,709,231 7,913,714
------------------ ------------------
Adjusted EBITDA 24,852,647 19,559,937
------------------ ------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2010
------------------ ------------------
Net Income 52,978,021 20,597,799
------------------ ------------------
Plus Net Interest expense 8,846,523 7,278,697
------------------ ------------------
Plus Depreciation 25,604,655 24,770,574
------------------ ------------------
EBITDA 87,429,199 52,647,070
------------------ ------------------
Adjusted EBITDA Reconciliation
------------------------------
Net Income 52,978,021 20,597,799
------------------ ------------------
Non-cash revenue and depreciation
due to below market acquired time
charters (11,851,688) (3,208,119)
------------------ ------------------
Impairment loss 6,659,570 -
------------------ ------------------
Profit on sale of vessel - (262,490)
------------------ ------------------
Unrealized gain from interest rate
swaps (1,994,214) (809,342)
------------------ ------------------
Non-cash expenses from the
amortization of share based
compensation cost recognized 658,205 7,296,067
------------------ ------------------
Adjusted Net Income 46,449,894 23,613,915
------------------ ------------------
Plus Net Interest expense 8,846,523 7,278,697
------------------ ------------------
Plus Depreciation (2) 23,541,492 22,705,890
------------------ ------------------
Adjusted EBITDA 78,837,909 53,598,502
------------------ ------------------
(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 September 30, 2009 September 30, 2010
------------------ ------------------
Net Income 17,976,781 4,132,175
------------------ ------------------
Weighted average number of Class A
common shares basic and diluted 44,653,942 49,482,858
------------------ ------------------
Earnings per Class A common shares
basic and diluted 0.40 0.08
------------------ ------------------
Reconciliation of Net Income to
Adjusted Net Income
-------------------------------
Net Income 17,976,781 4,132,175
------------------ ------------------
Non-cash revenue and depreciation
due to below market acquired time
charters (4,008,067) 695,825
------------------ ------------------
Impairment loss 654,570 -
------------------ ------------------
Unrealized loss from interest rate
swaps 160,208 1,571,978
------------------ ------------------
Non-cash expenses from the
amortization of compensation cost
recognized 355,546 2,449,193
------------------ ------------------
Adjusted Net Income 15,139,038 8,849,171
------------------ ------------------
Weighted average number of common
shares basic and diluted 44,653,942 49,482,858
------------------ ------------------
Adjusted earnings per share basic
and diluted(1) 0.33 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)
Nine Months Ended Nine Months Ended
GAAP Financial Information September 30, 2009 September 30, 2010
------------------ ------------------
Net Income 52,978,021 20,597,799
------------------ ------------------
Weighted average number of Class A
common shares basic and diluted 34,951,005 49,481,979
------------------ ------------------
Earnings per Class A common shares
basic and diluted 1.50 0.40
------------------ ------------------
Reconciliation of Net Income to
Adjusted Net Income
-------------------------------
Net Income 52,978,021 20,597,799
------------------ ------------------
Non-cash revenue and depreciation
due to below market acquired time
charters (11,851,688) (3,208,119)
------------------ ------------------
Impairment loss 6,659,570 -
------------------ ------------------
Profit on sale of vessel - (262,490)
------------------ ------------------
Unrealized gain from interest rate
swaps (1,994,214) (809,342)
------------------ ------------------
Non-cash expenses from the
amortization of compensation cost
recognized 658,205 7,296,067
------------------ ------------------
Adjusted Net Income 46,449,894 23,613,915
------------------ ------------------
Weighted average number of common
shares basic and diluted 34,951,005 49,481,979
------------------ ------------------
Adjusted earnings per share basic
and diluted(1) 1.32 0.46
------------------ ------------------
(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, 2009 and September 30, 2010
(Expressed in United States Dollars)
December 31, September 30,
2009 2010
Assets
Current assets
Cash and cash equivalents 133,960,178 4,611,439
Restricted cash 31,000,000 28,144,000
Assets held for sale 18,050,402 22,442,509
Trade receivables 2,187,039 953,636
Other receivables 2,233,809 1,241,480
Prepaid expenses 464,804 318,465
Due from management company 1,231,879 2,613,829
Inventories 921,325 1,270,368
------------ ------------
Total current assets 190,049,436 61,595,726
------------ ------------
Fixed assets
Vessels at cost 683,721,898 800,368,623
Less: accumulated depreciation (78,989,341) (96,282,026)
Advances for vessels under construction - 58,290,464
Other fixed assets 51,718 196,292
------------ ------------
Total fixed assets 604,784,275 762,573,353
------------ ------------
Other assets 1,380,577 1,927,374
Restricted cash 15,510,000 16,510,000
Other long-term receivables 968,560 -
------------ ------------
Total Assets 812,692,848 842,606,453
------------ ------------
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable (including balance due
to a related party of $17,300 and $32,421 as
of December 31, 2009 and September 30, 2010
respectively) 1,951,695 3,068,452
Accrued expenses 2,416,524 2,333,152
Interest rate swaps 6,820,289 4,259,003
Deferred income 3,701,832 2,502,281
Current portion of long-term debt 39,200,000 36,933,491
Liability associated with vessel held for sale 24,900,000 12,700,000
------------ ------------
Total current liabilities 78,990,340 61,796,379
------------ ------------
Long-Term Liabilities
Long-term debt 270,235,000 300,026,509
Deferred income 461,390 1,088,578
Interest rate swaps 1,467,499 3,219,443
Below market acquired time charters 5,272,801 -
------------ ------------
Total long-term liabilities 277,436,690 304,334,530
------------ ------------
Total Liabilities 356,427,030 366,130,909
------------ ------------
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par value; 25,000,000
authorized, none issued, none outstanding at
December 31, 2009 and September 30, 2010 - -
Class A common shares, $0.001 par value;
120,000,000 and 750,000,000 authorized;
51,189,033 and 51,224,599 issued
and outstanding at December 31, 2009 and
September 30, 2010, respectively 51,189 51,225
Class B common shares, $0.001 par value;
5,000,000 authorized none issued and
outstanding at December 31, 2008 and
September 30, 2010 - -
Additional paid-in capital 408,619,010 415,915,042
Retained earnings 47,595,619 60,509,277
------------ ------------
Total shareholders' equity 456,265,818 476,475,544
------------ ------------
Total Liabilities and Shareholders' Equity 812,692,848 842,606,453
------------ ------------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the three months ended September 30, 2009 and 2010
(Expressed in United States Dollars)
Three Months Three Months
Ended Ended
September 30, September 30,
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
September 30, 2009 and 2010, respectively) 40,100,204 28,736,569
Less: commissions (including related party
commissions of $425,525 and $376,069 for the
three months ended September 30, 2009 and
2010, respectively) 2,022,143 1,696,816
------------ ------------
Net Revenue 38,078,061 27,039,753
------------ ------------
Expenses/(Income)
Voyage expenses 26,846 60,333
Vessels operating expenses (including expenses
charged by a related party of $44,900 and
$94,367 for the three months ended September
30, 2009 and 2010, respectively) 4,722,549 5,453,655
Dry-docking expenses 23,821 795,037
Management fees charged by a related party 903,392 1,122,363
Depreciation 8,405,012 8,609,539
General and administrative expenses (including
share based compensation of $355,546 and
$2,449,193 for the three months ended
September 30, 2009 and 2010, respectively) 1,311,253 3,701,284
Impairment loss 654,570 -
------------ ------------
Operating Income 22,030,618 7,297,542
------------ ------------
Other Income/(Expenses)
Interest and finance costs (2,201,783) (2,838,063)
Loss on derivatives (2,014,358) (1,734,993)
Interest income 197,405 41,011
Foreign currency (loss)/gain (35,101) 1,366,678
------------ ------------
Total Other Expenses, net (4,053,837) (3,165,367)
------------ ------------
Net Income 17,976,781 4,132,175
Earnings per Class A common share, basic and
diluted $ 0.40 $ 0.08
Weighted average number of Class A common
shares, basic and diluted 44,653,942 49,482,858
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the nine months ended September 30, 2009 and 2010
(Expressed in United States Dollars)
Nine Months Nine Months
Ended Ended
September 30, September 30,
2009 2010
Revenue
Time charter revenue (including amortization of
below and above market acquired time charters
of $13,914,851 and $5,272,803 for the nine
months ended September 30, 2009 and 2010,
respectively) 123,990,931 89,637,904
Less: commissions (including related party
commissions of $1,343,929 and $1,061,329 for
the nine months ended September 30, 2009
and 2010, respectively) 6,464,805 5,053,971
------------ ------------
Net Revenue 117,526,126 84,583,933
------------ ------------
Expenses/(Income)
Voyage expenses 212,142 245,977
Vessels operating expenses (including expenses
charged by a related party of $145,100 and
$241,328 for the nine months ended
September 30, 2009 and 2010, respectively) 14,823,731 14,435,705
Dry-docking expenses 88,078 2,045,677
Management fees charged by a related party 2,663,664 2,871,756
Depreciation 25,604,655 24,770,574
General and administrative expenses (including
share based compensation of $658,205 and
$7,296,067 for the nine months ended
September 30, 2009 and 2010, respectively) 3,337,505 11,102,728
Impairment loss 6,659,570 -
Profit on sale of assets / vessel acquisition
option - (851,030)
Gain from vessel early redelivery (251,855) (113,338)
------------ ------------
Operating Income 64,388,636 30,075,884
------------ ------------
Other Income/(Expenses)
Interest and finance costs (9,408,094) (7,567,723)
Loss on derivatives (2,548,729) (3,525,377)
Interest income 561,571 289,026
Foreign currency (loss)/gain (15,363) 1,325,989
------------ ------------
Total Other Expenses, net (11,410,615) (9,478,085)
------------ ------------
Net Income 52,978,021 20,597,799
Earnings per Class A common share, basic and
diluted $ 1.50 $ 0.40
Weighted average number of Class A common
shares, basic and diluted 34,951,005 49,481,979
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Shareholders' Equity
For the nine months September 30, 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 20,900,600 20,900 83,369,830 83,390,730
Dividends
declared (0.15
per share) (5,412,292) (5,412,292)
Net Income 52,978,021 52,978,021
----------- ------- ----------- ----------- -----------
Balance September
30, 2009 48,039,115 48,039 401,885,320 37,454,379 439,387,738
----------- ------- ----------- ----------- -----------
Balance January 1,
2010 51,189,033 51,189 408,619,010 47,595,619 456,265,818
---------- ------ ----------- ----------- -----------
Issuance of Class A
common shares,
and share based
compensation 44,000 44 7,296,024 7,296,068
Cancellation of
restricted Class A
common shares (8,434) (8) 8
Dividends
declared (0.15
per share) (7,684,141) (7,684,141)
Net Income 20,597,799 20,597,799
---------- ------ ----------- ----------- -----------
Balance September
30, 2010 51,224,599 51,225 415,915,042 60,509,277 476,475,544
---------- ------ ----------- ----------- -----------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2009 and 2010
(Expressed in United States Dollars)
Nine Months Nine Months
Ended Ended
September September
30, 2009 30, 2010
Cash flows from operating activities
Net Income 52,978,021 20,597,799
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 25,604,655 24,770,574
Impairment loss 6,659,570 -
Profit on sale of assets / vessel acquisition
option - (851,030)
Amortization of below and above market
acquired time charters (13,914,851) (5,272,803)
Amortization of financing costs 901,185 697,606
Share based compensation 658,205 7,296,067
Unrealized gain on interest rate swaps (1,994,214) (809,342)
Changes in assets and liabilities
Trade receivables (631,832) 1,233,403
Other receivables 290,580 992,329
Prepaid expenses (478,982) 146,339
Inventories 147,982 (349,043)
Due from management company (2,548,537) (1,381,950)
Other long term receivables (1,553,196) 968,560
Trade accounts payable (754,102) 1,116,757
Accrued expenses (2,339,340) 49,859
Deferred income (806,144) (572,363)
------------ ------------
Net cash from operating activities 62,219,000 48,632,762
------------ ------------
Cash flow from Investing Activities
Net proceeds from sale of assets / vessel
acquisition option - 18,901,432
Acquisition of vessels and capital
expenditures - (146,551,672)
Payments for vessels under construction - (58,290,464)
Other fixed assets - (160,025)
Restricted cash (net) (32,800,000) 1,856,000
------------ ------------
Net cash used in investing activities (32,800,000) (184,244,729)
------------ ------------
Cash flows from financing activities
Proceeds from long-term debt 30,000,000 70,000,000
Repayment of long-term debt (68,625,000) (54,675,000)
Payment of financing costs (250,549) (1,377,631)
Proceeds from the issuance of Class A common
shares (net) 82,415,416 -
Dividends paid (5,412,292) (7,684,141)
------------ ------------
Net cash from financing activities 38,127,575 6,263,228
------------ ------------
Net increase / (decrease) in cash and cash
equivalents 67,546,575 (129,348,739)
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 135,988,327 4,611,439
------------ ------------
Supplemental disclosure of cash flow
information
Cash paid during the period for interest 10,078,148 6,066,753
Contact Information: Contacts: Investor Relations / Media Capital Link, Inc. Paul Lampoutis 230 Park Avenue Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: paragon@capitallink.com