Euroseas Ltd. (NASDAQ:ESEA) (the “Company” or “Euroseas”), an owner
and operator of drybulk and container carrier vessels and provider
of seaborne transportation for drybulk and containerized cargoes,
announced today its results for the three month period and full
year ended December 31, 2017.
Fourth Quarter 2017
Highlights:
- Total net revenues of $13.5 million. Net income attributable to
common shareholders of $1.5 million or $0.13 earnings per share
basic and diluted. This income includes, amongst other items, a
$0.5 million dividend on Series B Preferred Shares and a $0.3
million gain on the sale of M/V Aggeliki P. Adjusted net income
attributable to common shareholders1 for the period was $1.1
million or $0.10 earnings per share basic and diluted.
- Adjusted EBITDA1 was $4.4 million.
- An average of 16.3 vessels were owned and operated during the
fourth quarter of 2017 earning an average time charter equivalent
rate of $9,083 per day.
- The Company declared its sixteenth dividend of $0.5 million on
its Series B Preferred Shares; the dividend was paid in-kind by
issuing additional Series B Preferred Shares.
Full year 2017 Highlights:
- Total net revenues of $42.9 million. Net loss attributable to
common shareholders of $7.9 million or $0.71 loss per share basic
and diluted. This loss includes, among other items, a $1.8 million
dividend on Series B Preferred Shares and a $4.6 million loss on
write-down of M/V Aggeliki P and M/V Monica P, which were held for
sale since September 30, 2017. M/V Aggeliki P was sold in December
2017. Adjusted net loss attributable to common shareholders1 for
the period was $4.2 million or $0.38 loss per share basic and
diluted.
- Adjusted EBITDA1 was $9.3 million.
- An average of 14.2 vessels were owned and operated during the
twelve months of 2017 earning an average time charter equivalent
rate of $8,290 per day.
Aristides Pittas, Chairman and CEO of
Euroseas, commented: “During the last quarter of 2017,
Euroseas returned to profitability not only because of the recovery
of the drybulk and containership markets but also due to its
continuous efforts to control its operating, financial and capital
cost structure and cash flows. We believe that, over the last
couple of years, we have positioned the Company to benefit from the
unfolding market recovery by renewing and expanding our fleet in
both sectors we operate. In the drybulk sector, after the upcoming
delivery of our Kamsarmax newbuilding and the planned sale of our
elder handymax unit, we will own a fleet of six vessels from
ultramax to kamsarmax size, three Chinese-built in the last two
years and three Japanese-built of 2000-04 vintage. In the
containership sector, we have a fleet of eleven medium age and
elder feeder units that produce earnings at present market levels
with low capital investment. ”
“At the same time, we are optimistic about the
prospects for both bulkers and containerships as demand for ships
is expected by most analysts to remain strong over the next couple
of years on the back of strong worldwide economic growth and modest
supply pressure. As we have stated in the past, we believe, we can
provide a publicly-listed consolidation platform in both sectors.
The latter along with accretive acquisitions remain our main
strategy for 2018.”
Tasos Aslidis, Chief Financial Officer
of Euroseas, commented: “The operating results of the
fourth quarter of 2017 reflect the recovered level of charter rates
in both the drybulk and containership markets. On average during
the fourth quarter of 2017, our vessels earned 19.4% higher time
charter equivalent rates than in the fourth quarter of 2016.”
“Total daily vessel operating expenses,
including management fees, general and administrative expenses, but
excluding drydocking costs, decreased approximately 4.6% during the
fourth quarter of 2017 compared to the same quarter of last year,
while for the full year 2017 the decrease was approximately
3.8%. As always, we want to emphasize that cost control
remains a key component of our strategy.”
“As of December 31, 2017, our outstanding debt
(excluding the unamortized loan fees) was $74.4 million versus
restricted and unrestricted cash of approximately $13.2 million.
We complied with all our debt covenants as of December 31,
2017.”
Fourth Quarter 2017 Results:For
the fourth quarter of 2017, the Company reported total net revenues
of $13.5 million representing a 85.2% increase over total net
revenues of $7.3 million during the fourth quarter of 2016. The
Company reported a net income for the period of $2.0 million and a
net income attributable to common shareholders of $1.5 million, as
compared to a net loss of $17.6 million and a net loss attributable
to common shareholders of $18.1 million for the fourth quarter of
2016. On average, 16.3 vessels were owned and operated during the
fourth quarter of 2017 earning an average time charter equivalent
rate of $9,083 per day compared to 12.1 vessels in the same period
of 2016 earning an average time charter equivalent rate of $7,609
per day.
The results for the fourth quarter of 2017
include a $0.1 million net gain on derivatives and a $0.3 million
net gain on sale of a vessel, as compared to a $0.1 million net
gain on derivatives, a $5.9 million loss on write-down of vessel
held for sale, a $3.8 million loss on termination of a shipbuilding
contract and a $4.5 million impairment loss in other investment and
investment in joint venture for the same period of 2016.
Depreciation expenses for the fourth quarter of
2017 were $1.9 million, compared to the $2.2 million for the same
period of 2016. Although the average number of vessels
increased, the new vessels acquired have a lower average daily
depreciation charge as a result of their lower initial values
(acquisition price) and greater remaining useful life (i.e. m/v
Alexandros P) compared to the remaining vessels. In the fourth
quarter of 2017, there was no equity loss in joint venture as
compared to equity loss of $1.0 million and impairment loss in
other investment and investment in joint venture of $4.5 million
for the three months ended December 31, 2016, as in 2016, the
Company concluded that its equity investment in Euromar and the
invested portion of its investment in preferred units of Euromar
were entirely impaired and hence the Company ceased recognising
income on the preferred units. Euromar is a wholly owned subsidiary
of Euroseas since September 2017, but its vessels were
substantially under the control of its lenders and were all sold by
the end of 2017, and, thus, it has not been consolidated in our
results nor any gain or loss from it has been recognized.
Adjusted EBITDA for the fourth quarter of 2017
was $4.4 million compared to $(0.6) million for the same of the
fourth quarter of 2016. Please see below for Adjusted EBITDA
reconciliation to net loss and cash flow provided by operating
activities.
Basic and diluted earnings per share
attributable to common shareholders for the fourth quarter of 2017
was $0.13 calculated on 11,113,718 basic and diluted weighted
average number of shares outstanding, compared to basic and diluted
loss per share of $2.17 for the fourth quarter of 2016, calculated
on 8,312,708 basic and diluted weighted average number of shares
outstanding.
Excluding the effect on the income/(loss)
attributable to common shareholders for the quarter of the net gain
on derivatives, the net gain on sale of a vessel, the loss on
termination of a shipbuilding contract, the loss on write-down of
vessels held for sale and the impairment loss of other investment
and investment in joint venture, the adjusted earnings per share
attributable to common shareholders for the quarter ended December
31, 2017 would have been $0.10 per share basic and diluted compared
to net loss of $0.47 per share basic and diluted for the quarter
ended December 31, 2016. Usually, security analysts do not include
the above items in their published estimates of earnings per
share.
Full Year 2017 Results:For the
full year of 2017, the Company reported total net revenues of $42.9
million representing a 51.0% increase over total net revenues of
$28.4 million during the twelve months of 2016. The Company
reported a net loss for the period of $6.1 million and a net loss
attributable to common shareholders of $7.9 million, as compared to
a net loss of $44.2 million and a net loss attributable to common
shareholders $45.9 million for the twelve months of 2016. On
average, 14.2 vessels were owned and operated during 2017 earning
an average time charter equivalent rate of $8,290 per day compared
to 11.52 vessels in the same period of 2016 earning on average
$7,259 per day.
The results for the twelve months of 2017
include a $0.1 million net gain on derivatives, a $0.8 million net
gain on sale of two vessels and a $4.6 million loss on write-down
of two vessels held for sale, as compared to a $0.1 million net
loss on derivatives, a $5.9 million loss on write-down of vessel
held for sale, a $7.1 million loss on termination of shipbuilding
contracts and a $18.5 million impairment loss in other investment
and investment in joint venture for the same period of 2016.
Depreciation expenses for 2017 were $8.4 million
compared to $8.8 million during the same period of 2016. Although
the average number of vessels increased in the twelve months of
2017 compared to the same period of 2016, the new vessels acquired
have a lower average daily depreciation charge as a result of their
lower initial values (acquisition price) and greater remaining
useful life (i.e. m/v Alexandros P) compared to the remaining
vessels. During 2017, there was no equity loss in joint venture and
other investment income, as compared to equity loss of $2.4 million
and other investment income of $1.0 million for the twelve months
ended December 31, 2016, since the equity investment in Euromar and
the invested portion of its investment in preferred units of
Euromar was entirely impaired in 2016, as mentioned above.
Adjusted EBITDA for 2017 was $9.3 million
increasing from the ($1.3) million recorded during 2016. Please see
below for Adjusted EBITDA reconciliation to net loss and cash flow
provided by operating activities.
Basic and diluted loss per share attributable to
common shareholders for 2017 was $0.71 calculated on 11,067,524
basic and diluted weighted average number of shares outstanding,
compared to basic and diluted loss per share of $5.63 for 2016,
calculated on 8,165,703 basic and diluted weighted average number
of shares outstanding.
Excluding the effect on the loss attributable to
common shareholders of the net gain/loss on derivatives, the net
gain on sale of vessels and loss on write-down of vessels held for
sale, the loss on termination of shipbuilding contracts and the
impairment loss of other investment and investment in joint
venture, the adjusted net loss per share attributable to common
shareholders for 2017 would have been $0.38 compared to a loss of
$1.76 per share basic and diluted for 2016. Usually, security
analysts do not include the above items in their published
estimates of earnings per share.
Fleet Profile: The Euroseas
Ltd. fleet profile as of February 26, 2018 is as follows:
|
|
|
|
|
|
|
Name |
Type |
Dwt |
TEU |
Year Built |
Employment(*) |
TCE Rate
($/day) |
Dry Bulk Vessels |
|
|
|
|
|
|
XENIA |
Kamsarmax |
82,000 |
|
2016 |
TC 'till Jan-2020 + 1 year in Charterers
Option |
$14,100 $14,350 |
EIRINI P |
Panamax |
76,466 |
|
2004 |
TC 'till Mar-18 |
Hire 104% of Average BPI(***)
4TC |
TASOS |
Panamax |
75,100 |
|
2000 |
TC 'till Mar-18 |
$8,500 |
PANTELIS |
Panamax |
74,020 |
|
2000 |
TC 'till Mar-18 |
$ 9,650 |
ALEXANDROS P. |
Ultramax |
63,500 |
|
2017 |
TC ‘till July-18 |
Hire 114% of Average Supra Index |
MONICA P (****) |
Handymax |
46,667 |
|
1998 |
TC 'till Mar-18 |
$ 6,500 |
Vessel under construction(**) |
|
|
|
|
|
|
EKATERINI |
Kamsarmax |
82,000 |
|
2018 |
|
|
Total Dry Bulk Vessels |
7 |
499,753 |
|
|
|
|
Container Carriers |
|
|
|
|
|
|
AKINADA BRIDGE |
Intermediate |
71,366 |
5,600 |
2001 |
TC 'till Mar-18 |
$11,250 |
EM ASTORIA |
Feeder |
35,600 |
2,788 |
2004 |
TC 'till May-18 |
$8,000 |
EVRIDIKI G |
Feeder |
34,677 |
2,556 |
2001 |
TC 'till Nov-18 |
$9,950 |
EM CORFU |
Feeder |
34,654 |
2,556 |
2001 |
TC 'till Dec-18 |
$9,950 |
EM ATHENS |
Feeder |
32,350 |
2,506 |
2000 |
TC 'till Mar-18 |
$7,000 |
EM OINOUSSES |
Feeder |
32,350 |
2,506 |
2000 |
TC 'till Aug-18 + 12 months in Charterers Option |
$8,500 $15,000 |
JOANNA |
Feeder |
22,301 |
1,732 |
1999 |
TC 'till Mar-18 |
$7,000 |
MANOLIS P |
Feeder |
20,346 |
1,452 |
1995 |
TC 'till Apr-18 |
$7,000 |
AEGEAN EXPRESS |
Feeder |
18,581 |
1,439 |
1997 |
TC 'till Mar-18 |
$8,250 |
NINOS |
Feeder |
18,253 |
1,169 |
1990 |
TC 'till Mar-18 |
$8,950 |
KUO HSIUNG |
Feeder |
18,154 |
1,169 |
1993 |
TC 'till Apr-18 |
$8,950 |
Total Container Carriers |
11 |
338,632 |
25,473 |
|
|
|
Fleet Grand Total |
18 |
838,385 |
25,473 |
|
|
|
(*) Represents the earliest redelivery date(**) Ekaterini will
be delivered to Euroseas by June 2018.(***) BPI stands for Baltic
Panamax Index; the Average BPI 4TC is an index based on four time
charter routes. (****) Vessel is classified as held for sale as of
December 31, 2017.
|
|
|
|
|
Summary Fleet
Data: |
|
|
|
|
|
Three months, ended
December 31, 2016 |
Three months, ended December
31, 2017 |
Year ended
December 31, 2016 |
Year ended
December 31, 2017 |
FLEET DATA |
|
|
|
|
Average number of vessels (1) |
12.1 |
|
16.3 |
|
11.52 |
|
14.2 |
|
Calendar days for fleet (2) |
1,113.0 |
|
1,500.0 |
|
4,218.0 |
|
5,188.0 |
|
Scheduled off-hire days incl. laid-up (3) |
89.8 |
|
24.5 |
|
147.5 |
|
100.7 |
|
Available days for fleet (4) = (2) - (3) |
1,023.2 |
|
1,475.5 |
|
4,070.5 |
|
5,087.3 |
|
Commercial off-hire days (5) |
39.2 |
|
41.1 |
|
135.4 |
|
83.8 |
|
Operational off-hire days (6) |
1.7 |
|
11.7 |
|
9.2 |
|
39.0 |
|
Voyage days for fleet (7) = (4) - (5) - (6) |
982.3 |
|
1,422.7 |
|
3,925.9 |
|
4,964.5 |
|
Fleet utilization (8) = (7) / (4) |
96.0 |
% |
96.4 |
% |
96.4 |
% |
97.6 |
% |
Fleet utilization, commercial (9) = ((4) - (5)) / (4) |
96.2 |
% |
97.2 |
% |
96.7 |
% |
98.4 |
% |
Fleet utilization, operational (10) = ((4) - (6)) / (4) |
99.8 |
% |
99.2 |
% |
99.8 |
% |
99.2 |
% |
|
|
|
|
|
AVERAGE DAILY RESULTS |
|
|
|
|
Time charter equivalent rate (11) |
7,609 |
|
9,083 |
|
7,259 |
|
8,290 |
|
Vessel operating expenses excl. drydocking expenses (12) |
4,826 |
|
4,765 |
|
5,060 |
|
5,003 |
|
General and administrative expenses (13) |
699 |
|
508 |
|
823 |
|
659 |
|
Total vessel operating expenses (14) |
5,525 |
|
5,273 |
|
5,883 |
|
5,662 |
|
Drydocking expenses (15) |
431 |
|
303 |
|
523 |
|
135 |
|
|
|
|
|
|
|
|
|
|
(1) Average number of vessels is the number of
vessels that constituted the Company’s fleet for the relevant
period, as measured by the sum of the number of calendar days each
vessel was a part of the Company’s fleet during the period divided
by the number of calendar days in that period.
(2) Calendar days. We define calendar days as
the total number of days in a period during which each vessel in
our fleet was in our possession including off-hire days associated
with major repairs, drydockings or special or intermediate surveys
or days of vessels in lay-up. Calendar days are an indicator of the
size of our fleet over a period and affect both the amount of
revenues and the amount of expenses that we record during that
period. (3) The scheduled off-hire days including vessels laid-up
are days associated with scheduled repairs, drydockings or special
or intermediate surveys or days of vessels in lay-up. (4) Available
days. We define available days as the total number of days in a
period during which each vessel in our fleet was in our possession
net of scheduled off-hire days. We use available days to measure
the number of days in a period during which vessels were available
to generate revenues. (5) Commercial off-hire days. We define
commercial off-hire days as days a vessel is idle without
employment (this definition has been revised starting from April 1,
2017 to exclude from commercial offhire days, days the vessel is
sailing for repositioning purposes; previous periods' commercial
offihire has been adjusted accordingly if necessary). (6)
Operational off-hire days. We define operational off-hire days as
days associated with unscheduled repairs or other off-hire time
related to the operation of the vessels. (7) Voyage days. We define
voyage days as the total number of days in a period during which
each vessel in our fleet was in our possession net of commercial
and operational off-hire days. We use voyage days to measure the
number of days in a period during which vessels actually generate
revenues or are sailing for repositioning purposes. (8) Fleet
utilization. We calculate fleet utilization by dividing the number
of our voyage days during a period by the number of our available
days during that period. We use fleet utilization to measure a
company's efficiency in finding suitable employment for its vessels
and minimizing the amount of days that its vessels are off-hire for
reasons such as unscheduled repairs or days waiting to find
employment. (9) Fleet utilization, commercial. We calculate
commercial fleet utilization by dividing our available days net of
commercial off-hire days during a period by our available days
during that period. (10) Fleet utilization, operational. We
calculate operational fleet utilization by dividing our available
days net of operational off-hire days during a period by our
available days during that period. (11) Time charter
equivalent, or TCE, is a measure of the average daily revenue
performance of a vessel on a per voyage basis. Our method of
calculating TCE is determined by dividing revenue generated from
charters net of voyage expenses by voyage days for the relevant
time period. Voyage expenses primarily consist of port, canal and
fuel costs that are unique to a particular voyage, which would
otherwise be paid by the charterer under a time charter contract.
TCE is a standard shipping industry performance measure used
primarily to compare period-to-period changes in a shipping
company's performance despite changes in the mix of charter types
(i.e., spot voyage charters, time charters and bareboat charters)
under which the vessels may be employed between the periods. Our
definition of TCE may not be comparable to that used by other
companies in the shipping industry (12) Daily vessel operating
expenses, which includes crew costs, provisions, deck and engine
stores, lubricating oil, insurance, maintenance and repairs and
management fees are calculated by dividing vessel operating
expenses by fleet calendar days for the relevant time period.
Drydocking expenses are reported separately. (13) Daily
general and administrative expense is calculated by dividing
general and administrative expense by fleet calendar days for the
relevant time period. (14) Total vessel operating expenses,
or TVOE, is a measure of our total expenses associated with
operating our vessels. TVOE is the sum of vessel operating expenses
excluding drydocking expenses and general and administrative
expenses. Daily TVOE is calculated by dividing TVOE by fleet
calendar days for the relevant time period. (15) Drydocking
expenses, which include expenses during drydockings that would have
been capitalized and amortized under the deferral method divided by
the fleet calendar days for the relevant period. Drydocking
expenses could vary substantially from period to period depending
on how many vessels underwent drydocking during the period.
Conference Call and Webcast:
Later today, Monday, March 5, 2018 at 10:00 a.m.
EST, the company's management will host a conference call to
discuss the results.
Conference Call
details:Participants should dial into the call 10 minutes
before the scheduled time using the following numbers: 1 (866)
819-7111 (from the US), 0(800) 953-0329 (from the UK) or (+44) (0)
1452 542 301 (from outside the US). Please quote "Euroseas."
A replay of the conference call will be
available until Monday, March 12, 2018. The United States replay
number is 1(866) 247-4222; from the UK 0(800) 953-1533; the
standard international replay number is (+44) (0) 1452 550 000 and
the access code required for the replay is: 6973591#.
Audio Webcast - Slides
Presentation:There will be a live and then archived audio
webcast of the conference call, via the internet through the
Euroseas website (www.euroseas.gr). Participants to the live
webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
The slide presentation on the fourth quarter
ended December 31, 2017, will also be available in PDF format 10
minutes prior to the conference call and webcast, accessible on the
company's website (www.euroseas.gr) on the webcast page.
Participants to the webcast can download the PDF
presentation.
|
Euroseas Ltd. |
Unaudited Consolidated Condensed Statements of
Operations |
(All amounts expressed in U.S. Dollars –
except share amounts) |
|
|
Three Months Ended December 31, |
Three Months Ended December 31, |
Year Ended December 31, |
Year Ended December 31, |
|
2016 |
2017 |
2016 |
2017 |
|
|
|
|
|
Revenues |
|
|
|
|
Voyage revenue |
7,677,560 |
|
14,188,705 |
|
29,789,036 |
|
45,117,582 |
|
Related party revenue |
60,000 |
|
60,000 |
|
240,000 |
|
240,000 |
|
Commissions |
(425,111 |
) |
(702,764 |
) |
(1,604,747 |
) |
(2,440,444 |
) |
Net revenues |
7,312,449 |
|
13,545,941 |
|
28,424,289 |
|
42,917,138 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Voyage expenses |
203,079 |
|
1,266,495 |
|
1,291,712 |
|
3,960,807 |
|
Vessel operating expenses |
4,553,266 |
|
5,908,527 |
|
18,161,862 |
|
21,911,730 |
|
Other operating income |
- |
|
(499,103 |
) |
- |
|
(499,103 |
) |
Drydocking expenses |
479,544 |
|
454,226 |
|
2,204,784 |
|
698,800 |
|
Depreciation |
2,218,143 |
|
1,913,295 |
|
8,788,121 |
|
8,372,237 |
|
Management fees |
817,775 |
|
1,239,958 |
|
3,179,596 |
|
4,042,353 |
|
Loss on termination of shipbuilding contracts |
3,848,149 |
|
- |
|
7,050,179 |
|
- |
|
Other general and administrative expenses |
778,170 |
|
762,594 |
|
3,472,422 |
|
3,419,363 |
|
Loss on write-down of vessels held for sale |
5,924,668 |
|
- |
|
5,924,668 |
|
4,595,819 |
|
Net gain on sale of vessels |
- |
|
(287,456 |
) |
(10,597 |
) |
(803,811 |
) |
Total operating expenses |
18,822,794 |
|
10,758,536 |
|
50,062,747 |
|
45,698,195 |
|
|
|
|
|
|
Operating (loss) / income |
(11,510,345 |
) |
2,787,405 |
|
(21,638,458 |
) |
(2,781,057 |
) |
|
|
|
|
|
Other income/(expenses) |
|
|
|
|
Interest and finance cost |
(688,585 |
) |
(927,793 |
) |
(2,531,999 |
) |
(3,372,269 |
) |
Gain / (loss) on derivatives, net |
96,685 |
|
85,087 |
|
(119,154 |
) |
61,556 |
|
Other investment income |
- |
|
- |
|
1,024,714 |
|
- |
|
Impairment of other investment |
(4,421,452 |
) |
- |
|
(4,421,452 |
) |
- |
|
Foreign exchange (loss) /gain |
(5,610 |
) |
1,223 |
|
(41,402 |
) |
(40,763 |
) |
Interest income |
5,765 |
|
8,577 |
|
22,330 |
|
37,972 |
|
Other expenses, net |
(5,013,197 |
) |
(832,906 |
) |
(6,066,963 |
) |
(3,313,504 |
) |
Equity loss in joint venture |
(1,034,306 |
) |
- |
|
(2,444,627 |
) |
- |
|
Impairment in joint venture |
(71,075 |
) |
- |
|
(14,071,075 |
) |
- |
|
Net (loss) / income |
(17,628,923 |
) |
1,954,499 |
|
(44,221,123 |
) |
(6,094,561 |
) |
Dividend Series B preferred shares |
(441,891 |
) |
(464,403 |
) |
(1,725,699 |
) |
(1,808,811 |
) |
Net (loss) / income attributable to common
shareholders |
(18,070,814 |
) |
1,490,096 |
|
(45,946,822 |
) |
(7,903,372 |
) |
Loss, per share, basic and diluted |
(2.17 |
) |
0.13 |
|
(5.63 |
) |
(0.71 |
) |
Weighted average number of shares, basic and diluted |
8,312,708 |
|
11,113,718 |
|
8,165,703 |
|
11,067,524 |
|
|
|
|
|
|
|
|
|
|
|
Euroseas Ltd. |
Unaudited Consolidated Condensed Balance
Sheets |
(All amounts expressed in U,S, Dollars –
except share amounts) |
|
|
December
31,2016 |
December 31,
2017 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash and cash
equivalents |
3,208,092 |
|
4,115,985 |
|
Trade accounts
receivable |
1,432,114 |
|
1,479,282 |
|
Other
receivables, net |
870,415 |
|
1,609,099 |
|
Inventories |
1,291,279 |
|
1,645,209 |
|
Restricted
cash |
655,739 |
|
1,998,452 |
|
Prepaid
expenses |
172,398 |
|
319,559 |
|
Vessel held for
sale |
2,814,046 |
|
4,914,782 |
|
Total current
assets |
10,444,083 |
|
16,082,368 |
|
|
|
|
|
|
Fixed
assets: |
|
|
|
|
Vessels,
net |
105,584,633 |
|
134,111,715 |
|
Advances for
vessels under construction and vessel acquisition deposit |
17,753,737 |
|
5,051,211 |
|
Long-term
assets: |
|
|
|
|
Restricted
cash |
5,484,268 |
|
7,084,267 |
|
Deferred
charges |
426,783 |
|
- |
|
Other
investment |
4,000,000 |
|
- |
|
Total long-term assets |
133,249,421 |
|
146,247,193 |
|
Total assets |
143,693,504 |
|
162,329,561 |
|
LIABILITIES,
MEZZANNINE EQUITY AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Long term debt,
current portion |
5,549,218 |
|
12,170,528 |
|
Loan from
related party |
2,000,000 |
|
- |
|
Trade accounts
payable and accrued expenses |
3,176,556 |
|
4,023,578 |
|
Deferred
revenue |
437,322 |
|
879,916 |
|
Due to related
company |
11,539 |
|
1,280,577 |
|
Derivatives |
- |
|
177,998 |
|
Total current
liabilities |
11,174,635 |
|
18,532,597 |
|
|
|
|
|
|
Long-term
liabilities: |
|
|
|
|
Long term debt,
net of current portion |
44,366,976 |
|
60,175,276 |
|
Derivatives |
240,181 |
|
16,631 |
|
Vessel profit
participation liability |
- |
|
1,297,100 |
|
Total long-term
liabilities |
44,607,157 |
|
61,489,007 |
|
Total
liabilities |
55,781,792 |
|
80,021,604 |
|
|
|
|
|
|
Mezzanine
equity: |
|
|
|
|
Series B Preferred shares (par value $0.01, 20,000,000 shares
authorized, 35,505 and 37,314 issued and outstanding
respectively) |
33,804,948 |
|
35,613,759 |
|
Shareholders'
equity: |
|
|
|
|
Common stock (par value $0.03, 200,000,000 shares authorized,
10,876,112 and 11,274,126, respectively, issued and
outstanding) |
326,283 |
|
338,230 |
|
Additional
paid-in capital |
283,757,739 |
|
284,236,597 |
|
Accumulated
deficit |
(229,977,258 |
) |
(237,880,629 |
) |
Total shareholders' equity |
54,106,764 |
|
46,694,198 |
|
Total liabilities, mezzanine equity and shareholders'
equity |
143,693,504 |
|
162,329,561 |
|
|
|
|
|
|
|
Euroseas Ltd. |
Unaudited Consolidated Condensed Statements of
Cash Flows |
(All amounts expressed in U,S,
Dollars) |
|
|
Year Ended December 31, |
Year Ended December 31, |
2016 |
2017 |
|
|
|
Cash flows from
operating activities: |
|
|
Net loss |
(44,221,123 |
) |
(6,094,561 |
) |
Adjustments to
reconcile net loss to net cash (used in) / provided by operating
activities: |
|
|
Depreciation of
vessels |
8,788,121 |
|
8,372,237 |
|
Other operating
income |
- |
|
(499,103 |
) |
Loss on write-down of
vessels held for sale |
5,924,668 |
|
4,595,819 |
|
Amortization and write
off of deferred charges |
613,326 |
|
322,475 |
|
Amortization of debt
discount |
- |
|
60,988 |
|
Equity loss and
impairment of investment in joint venture |
16,515,702 |
|
- |
|
Share-based
compensation |
294,341 |
|
116,562 |
|
Gain on sale of
vessels |
(10,597 |
) |
(803,811 |
) |
Loss on termination of
shipbuilding contracts |
7,050,179 |
|
- |
|
Unrealized gain on
derivatives, net |
(12,921 |
) |
(45,552 |
) |
Other investment
income |
(1,024,714 |
) |
- |
|
Impairment on other
investment |
4,421,452 |
|
- |
|
Changes in operating
assets and liabilities |
829,328 |
|
1,938,258 |
|
Net cash (used in) / provided by operating
activities |
(832,238 |
) |
7,963,312 |
|
|
|
|
Cash flows from
investing activities: |
|
|
Proceeds from sale
of vessels |
4,196,268 |
|
9,552,260 |
|
Cash paid for vessels
under construction and acquisition |
(27,329,824 |
) |
(39,698,984 |
) |
Cash released from
other investment |
- |
|
4,000,000 |
|
Net
cash used in investing activities |
(23,133,556 |
) |
(26,146,724 |
) |
|
|
|
Cash flows from
financing activities: |
|
|
Proceeds from issuance
of common stock |
3,168,058 |
|
549,495 |
|
Offering expenses
paid |
(82,377 |
) |
(341,072 |
) |
Loan arrangement fees
paid |
(790,042 |
) |
(229,762 |
) |
Proceeds from related
party loan |
2,000,000 |
|
- |
|
Repayment of related
party loan |
- |
|
(2,000,000 |
) |
Proceeds from long-term
debt |
28,300,000 |
|
33,112,500 |
|
Repayment of long-term
debt |
(18,464,125 |
) |
(9,057,144 |
) |
Net
cash provided by financing activities |
14,131,514 |
|
22,034,017 |
|
|
|
|
Net (decrease) /
increase in cash, cash equivalents and restricted cash |
(9,834,280 |
) |
3,850,605 |
|
Cash, cash equivalents
and restricted cash at beginning of year |
19,182,379 |
|
9,348,099 |
|
Cash, cash equivalents and restricted cash at end of
year |
9,348,099 |
|
13,198,704 |
|
Cash
Breakdown |
|
|
Cash and cash
equivalents |
3,208,092 |
|
4,115,985 |
|
Restricted cash,
current |
655,739 |
|
1,998,452 |
|
Restricted cash, long term |
5,484,268 |
|
7,084,267 |
|
Total cash,
cash equivalents and restricted cash shown in the statement of cash
flows |
9,348,099 |
|
13,198,704 |
|
|
|
|
|
|
|
Euroseas Ltd. |
Reconciliation of Adjusted EBITDA
to |
Net loss and Cash Flow Provided By Operating
Activities |
(All amounts expressed in U.S.
Dollars) |
|
|
Three Months EndedDecember 31,
2016 |
Three Months
EndedDecember 31, 2017 |
Year
EndedDecember 31, 2016 |
Year EndedDecember 31,
2017 |
Net (loss) / income |
(17,628,923 |
) |
1,954,499 |
|
(44,221,123 |
) |
(6,094,561 |
) |
Interest and finance costs, net (incl, interest income) |
682,820 |
|
919,216 |
|
2,509,669 |
|
3,334,297 |
|
Depreciation |
2,218,143 |
|
1,913,295 |
|
8,788,121 |
|
8,372,237 |
|
Loss on termination of shipbuilding contracts |
3,848,149 |
|
- |
|
7,050,179 |
|
- |
|
Net gain on sale of vessels |
- |
|
(287,456 |
) |
(10,597 |
) |
(803,811 |
) |
Loss on write-down of vessels held for sale |
5,924,668 |
|
- |
|
5,924,668 |
|
4,595,819 |
|
Unrealized and realized (gain) / loss on derivatives, net |
(96,685 |
) |
(85,087 |
) |
119,154 |
|
(61,556 |
) |
Impairment on other investment |
4,421,452 |
|
- |
|
4,421,452 |
|
- |
|
Impairment of investment in joint venture |
71,075 |
|
- |
|
14,071,075 |
|
- |
|
Adjusted EBITDA |
(559,301 |
) |
4,414,467 |
|
(1,347,402 |
) |
9,342,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
EndedDecember 31, 2016 |
Three Months EndedDecember
31, 2017 |
Year EndedDecember 31,
2016 |
Year EndedDecember 31,
2017 |
Net cash flow (used in) / provided by operating
activities |
(1,045,657 |
) |
4,905,370 |
|
(832,238 |
) |
7,963,312 |
|
Changes in operating assets / liabilities |
956,199 |
|
(1,783,436 |
) |
(829,328 |
) |
(1,938,258 |
) |
Other operating income |
- |
|
499,103 |
|
- |
|
499,103 |
|
Realized loss / (gain) on derivatives, net |
21,295 |
|
(7,376 |
) |
132,075 |
|
(16,004 |
) |
Equity loss in joint venture and other investment income, net |
(1,034,306 |
) |
- |
|
(1,419,913 |
) |
- |
|
Share-based compensation |
(80,893 |
) |
(18,000 |
) |
(294,341 |
) |
(116,562 |
) |
Interest, net |
624,061 |
|
818,806 |
|
1,896,343 |
|
2,950,834 |
|
Adjusted EBITDA |
(559,301 |
) |
4,414,467 |
|
(1,347,402 |
) |
9,342,425 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net
income/(loss) before interest, income taxes, depreciation, gain /
loss in derivatives, other operating income, loss on termination of
shipbuilding contracts, impairment of investment in joint venture
and other investment, loss on write-down of vessels held for sale
and gain on sale of vessels. Euroseas also computes Adjusted EBITDA
by adding the net cash flow provided by / (used in) operating
activities, the changes in operating assets / liabilities of the
period, the other operating income, the realized loss or (gain) on
derivatives, the equity loss in joint venture and other investment
income, the share based compensation of the period and the net
interest of the period. Adjusted EBITDA does not represent and
should not be considered as an alternative to net loss or cash flow
from operations, as determined by United States generally accepted
accounting principles, or U.S. GAAP. Adjusted EBITDA is included
herein because it is a basis upon which the Company assesses its
financial performance and liquidity position and because the
Company believes that it presents useful information to investors
regarding a company's ability to service and/or incur indebtedness.
The Company's definition of Adjusted EBITDA may not be the same as
that used by other companies in the shipping or other
industries.
|
Euroseas Ltd. |
Reconciliation of Net (loss) / income to
Adjusted net (loss) / income |
(All amounts expressed in U,S, Dollars – except
share data and per share amounts) |
|
|
Three Months EndedDecember 31,
2016 |
Three Months EndedDecember 31,
2017 |
Year EndedDecember 31,
2016 |
Year EndedDecember 31,
2017 |
Net (loss) / income |
(17,628,923 |
) |
1,954,499 |
|
(44,221,123 |
) |
(6,094,561 |
) |
Unrealized gain on derivatives, net |
(117,980 |
) |
(78,011 |
) |
(12,921 |
) |
(45,852 |
) |
Realized loss / (gain) on interest rate derivatives, net |
21,295 |
|
(8,157 |
) |
132,075 |
|
(16,785 |
) |
Net gain on sale of vessels |
- |
|
(287,456 |
) |
(10,597 |
) |
(803,811 |
) |
Loss on termination of shipbuilding contracts |
3,848,149 |
|
- |
|
7,050,179 |
|
- |
|
Loss on write-down of vessels held for sale |
5,924,668 |
|
- |
|
5,924,668 |
|
4,595,819 |
|
Impairment loss of other investment and investment in joint
venture |
4,492,527 |
|
- |
|
18,492,527 |
|
- |
|
Adjusted net (loss) / income |
(3,460,264 |
) |
1,580,875 |
|
(12,645,192 |
) |
(2,365,190 |
) |
Preferred dividends |
(441,891 |
) |
(464,403 |
) |
(1,725,699 |
) |
(1,808,811 |
) |
Adjusted net (loss) / income attributable to common
shareholders |
(3,902,155 |
) |
1,116,472 |
|
(14,370,891 |
) |
(4,174,001 |
) |
Adjusted net loss per share, basic and diluted |
(0.47 |
) |
0.10 |
|
(1.76 |
) |
(0.38 |
) |
Weighted average number of shares, basic and diluted |
8,312,708 |
|
11,113,718 |
|
8,165,703 |
|
11,067,524 |
|
|
|
|
|
|
|
|
|
|
"Adjusted net income/(loss)" and
"Adjusted net income/(loss) per share" Reconciliation:
Euroseas Ltd. considers "Adjusted net income/(loss)" to represent
net loss before gain / loss on derivatives, net gain on sale of
vessels, loss on write-down of vessels held for sale, loss on
termination of shipbuilding contracts and impairment loss of other
investment and investment in joint venture. "Adjusted net loss" and
"Adjusted net loss per share" is included herein because we believe
it assists our management and investors by increasing the
comparability of the Company's fundamental performance from period
to period by excluding the potentially disparate effects between
periods of gain / loss on derivatives, gain on sale of vessels,
loss on write-down of vessels held for sale, loss on termination of
shipbuilding contracts and impairment of investment in joint
venture, which items may significantly affect results of operations
between periods.
"Adjusted net income/(loss)" and "Adjusted
net income/(loss) per share" do not represent and should not be
considered as an alternative to net loss or loss per share, as
determined by U.S. GAAP. The Company's definition of "Adjusted net
loss" and "Adjusted net loss per share" may not be the same as that
used by other companies in the shipping or other industries.
______________________________1 Adjusted
EBITDA, Adjusted net loss and Adjusted loss per share
are not recognized measurements under GAAP. Refer to a subsequent
section of the Press Release for the definitions and reconciliation
of these measurements to the most directly comparable financial
measures calculated and presented in accordance with U.S. GAAP.
About Euroseas Ltd.: Euroseas
Ltd. was formed on May 5, 2005 under the laws of the Republic of
the Marshall Islands to consolidate the ship owning interests of
the Pittas family of Athens, Greece, which has been in the shipping
business over the past 140 years. Euroseas trades on the NASDAQ
Capital Market under the ticker ESEA.
Euroseas operates in the dry cargo, drybulk and
container shipping markets. Euroseas' operations are managed by
Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified
affiliated ship management company and Eurobulk (Far East) Ltd.
Inc., also an affiliated ship management company, which are
responsible for the day-to-day commercial and technical management
and operations of the vessels. Euroseas employs its vessels on spot
and period charters and through pool arrangements.
The Company has a fleet of 17 vessels, including
3 Panamax drybulk carriers, 1 Handymax drybulk carrier, 1 Kamsarmax
drybulk carrier, 1 Ultramax drybulk carrier, 10 Feeder
containerships and an intermediate containership. Euroseas 6
drybulk carriers have a total cargo capacity of 417,753 dwt, its 11
containerships have a cargo capacity of 25,473 teu. The Company has
also signed a contract for the construction of one Kamsarmax
(82,000 dwt) fuel efficient drybulk carrier. Including the
new-building, the total cargo capacity of the Company's drybulk
vessels will be 499,753 dwt.
Forward Looking StatementThis
press release contains forward-looking statements (as defined in
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended) concerning
future events and the Company's growth strategy and measures to
implement such strategy; including expected vessel acquisitions and
entering into further time charters. Words such as "expects,"
"intends," "plans," "believes," "anticipates," "hopes,"
"estimates," and variations of such words and similar expressions
are intended to identify forward-looking statements. Although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct. These
statements involve known and unknown risks and are based upon a
number of assumptions and estimates that are inherently subject to
significant uncertainties and contingencies, many of which are
beyond the control of the Company. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to changes in the demand
for dry bulk vessels and container ships, competitive factors in
the market in which the Company operates; risks associated with
operations outside the United States; and other factors listed from
time to time in the Company's filings with the Securities and
Exchange Commission. The Company expressly disclaims any
obligations or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with respect
thereto or any change in events, conditions or circumstances on
which any statement is based.
Visit the Company’s
website www.euroseas.gr
Company
Contact |
Investor
Relations / Financial Media |
Tasos AslidisChief
Financial OfficerEuroseas Ltd.11 Canterbury LaneWatchung, NJ
07069Tel. (908) 301-9091E-mail: aha@euroseas.gr |
Nicolas
BornozisPresidentCapital Link, Inc.230 Park Avenue, Suite 1536New
York, NY 10169Tel. (212) 661-7566E-mail:
euroseas@capitallink.com |
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