EDRY EuroDry Ltd

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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         Exhibit 1

EuroDry Ltd.

Reports Results for the Year and Quarter Ended December 31, 2020

Maroussi, Athens, Greece – February 16, 2021– EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three- and twelve-month periods ended December 31, 2020.  

Full Year 2020 Highlights:

·

 Total net revenues of $22.3 million.

·

Net loss of $5.9 million; net loss attributable to common shareholders (after a $1.6 million dividend on Series B Preferred Shares) of $7.5 million or $3.28 loss basic and diluted. Adjusted net loss attributable to common shareholders¹ for the period was $6.9 million or $3.04 adjusted loss per share basic and diluted.

·

Adjusted EBITDA was $3.7 million.

·

An average of 7.0 vessels were owned and operated during the twelve months of 2020 earning an average time charter equivalent rate of $9,387 per day.

Fourth Quarter 2020 Highlights:

·

Total net revenues of $6.4 million.

·

Net loss of $0.3 million; net loss attributable to common shareholders (after a $0.4 million dividend on Series B Preferred Shares) of $0.7 million or $0.31 loss per share basic and diluted. Adjusted net loss attributable to common shareholders¹ for the period was $0.8 million or $0.34 adjusted loss per share basic and diluted.

·

Adjusted EBITDA¹ was $1.8 million.

·

An average of 7.0 vessels were owned and operated during the fourth quarter of 2020 earning an average time charter equivalent rate of $10,761 per day.

·

The Company declared a dividend of $0.4 million on its Series B Preferred Shares. The dividend will be paid in-kind by issuing additional Series B Preferred Shares.  

¹Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s financial results presented in accordance with 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 GAAP.

Recent developments

·

In January 2021, the Company refinanced the outstanding loans of two of its vessels, M/V Alexandros and M/V Xenia, with a new loan of $26.7 million which, after repaying the outstanding loans of the vessels, resulted in approximately $3.9 million of additional funds available to the Company. The loan is to be repaid in 24 quarterly installments of $0.5 million along with a balloon payment of $14.7 million to be paid together with the last installment.

·

In January and February 2021, the Company redeemed a net amount of $3 million of its Series B Preferred Shares (“Preferred Shares”) and, contemporaneously, agreed with its preferred shareholders to reduce the dividend rate of its Preferred Shares to 8% per annum for two years from the 14% per annum level it was set to increase on January 29, 2021. Over the next two years, the Company has also the option to pay the preferred dividends in kind at a rate of 9%. The dividend will reset to 14% per annum in January 2023. The partial redemption and the reduction of the dividend rate for two years would result in about $0.50 per share higher earnings per year over the next two years and $0.18 higher earnings per share thereafter.

·

The Company has agreed to refinance the outstanding loan of M/V Eirini P with a loan of $5 million which, after repaying the outstanding loan of the vessel, will result in approximately $1.6 million of additional funds available to the Company. The loan will be repaid in 20 quarterly instalments of $0.21 million along with a balloon payment of $0.8 million to be paid together with the last installment. The loan is subject to customary documentation and is expected to be finalized in February 2021.

Aristides Pittas, Chairman and CEO of EuroDry, commented:

“During the fourth quarter of 2020 and especially in the beginning of 2021, the drybulk market improved gradually and reached levels last seen in the fall of 2019 just before the COVID-19 pandemic took center stage. Given the historically low orderbook, at only about 6% of the existing fleet, and the expected rebound of drybulk seaborne trade as vaccines help control COVID-19, we anticipate economic fundamentals that would support a strong charter market throughout 2021.  We believe, our fleet is well positioned to take advantage of the higher market rates as the equivalent of 85% of our fleet is exposed to market. Our fourth quarter results were influenced by the scheduled drydocking of M/V Xenia the cost of which was a contributing factor in the quarter’s loss; with no drydockings scheduled within this year and assuming charter rates remain near current levels, we would expect a meaningfully profitable year during 2021.

“At the same time, our increased liquidity, following our recent debt refinancings and preferred shares dividend rate reduction, allows us to pursue some of our fleet expansion plans. As always, we are looking at the capital markets, private and public, to fund our broader growth strategy which includes taking advantage of our public listing to provide a consolidation platform for other owners and fleets.”

Tasos Aslidis, Chief Financial Officer of EuroDry, commented: “Comparing our results for the fourth quarter of 2020 with the same period of 2019, our net revenues decreased by about $1.2 million, due to the lower time charter equivalent rates our vessels earned as compared to the fourth quarter of 2019.

“Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, increased by approximately 5.1% during the fourth quarter of 2020 compared to the same quarter of last year, while for the full year 2020 we had an increase of approximately 5.8%. This increase is mainly due to increased supply of stores and spare parts for our vessels in 2020 compared to 2019 and increased crewing costs, the latter resulting from difficulties in crew rotation due to COVID-19 related restrictions. As always, we want to emphasize that cost control remains a key component of our strategy.

“Adjusted EBITDA during the fourth quarter of 2020 was $1.8 million compared to $3.8 million achieved for the fourth quarter of last year. As of December 31, 2020, our outstanding debt (excluding the unamortized loan fees) was $51.4 million versus restricted and unrestricted cash of approximately $4.6 million.”

Fourth Quarter 2020 Results:

For the fourth quarter of 2020, the Company reported total net revenues of $6.4 million representing a 15.7% decrease over total net revenues of $7.6 million during the fourth quarter of 2019 which was the result of the decreased average time charter equivalent rate our vessels earned in the fourth quarter of 2020 compared to the same period of 2019. The Company reported a net loss for the period of $0.3 million and a net loss attributable to common shareholders of $0.7 million, as compared to net income of $1.4 million and net income attributable to common shareholders of $1.0 million for the same period of 2019. Gain on derivatives of $0.03 million and drydocking expenses of $0.5 million contributed to the result for the quarter as compared to gain on derivatives of $0.2 million and drydocking expenses of $0.07 million during the fourth quarter of 2019. Depreciation expenses for the fourth quarter of 2020 amounted to $1.65 million, remaining unchanged compared to the same period of 2019.

Interest and other financing costs for the fourth quarter of 2020 amounted to $0.5 million compared to $0.8 million for the same period of 2019. Interest during the fourth quarter of 2020 was lower due to lower debt during the period and the decreased Libor rates of our loans during the period as compared to the same period of last year.

On average, 7.0 vessels were owned and operated during the fourth quarter of 2020 earning an average time charter equivalent rate of $10,761 per day compared to 7.0 vessels in the same period of 2019 earning on average $12,439 per day.  

Adjusted EBITDA for the fourth quarter of 2020 was $1.8 million compared to $3.8 million achieved during the fourth quarter of 2019.

Basic and diluted loss per share attributable to common shareholders for the fourth quarter of 2020 was $0.31 calculated on 2,285,601 basic and diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $0.45 for the fourth quarter of 2019, calculated on 2,261,103 basic and diluted weighted average number of shares outstanding.  

Excluding the effect on the loss attributable to common shareholders for the quarter of the unrealized (gain)/ loss on derivatives, the adjusted loss attributable to common shareholders for the quarter ended December 31, 2020 would have been $0.34 per share basic and diluted compared to adjusted earnings of $0.43 per share basic and diluted for the quarter ended December 31, 2019. Usually, security analysts do not include the above item in their published estimates of earnings per share.

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Full Year 2020 Results:

For the full year of 2020, the Company reported total net revenues of $22.3 million representing a 18.2% decrease over total net revenues of $27.2 million during the twelve months of 2019, as a result of the decreased average time charter equivalent rate our vessels earned in the twelve months of 2020 compared to the same period of 2019. The Company reported a net loss for the period of $5.9 million and a net loss attributable to common shareholders of $7.5 million, as compared to net income for the period of $0.02 million and a net loss attributable to common shareholders of $1.9 million, for the twelve months of 2019. For the twelve months of 2020, a gain on bunkers resulted in decreased voyage expenses of $0.3 million for the period as compared to voyage expenses of $1.1 million in the same period of 2019. Vessel operating expenses were $11.6 million for the twelve months of 2020 as compared to $10.8 million for the same period of 2019, mainly due to increased supply of stores and spare parts for our vessels in 2020 compared to 2019 and increased crewing costs resulting from difficulties in crew rotation due to COVID-19 related restrictions. Depreciation expenses for the twelve months of 2020 were $6.6 million compared to $6.5 million during the same period of 2019. Interest and other financing costs for the twelve months of 2020 amounted to $2.3 million compared to $3.5 million for the same period of 2019. This decrease is due to lower average outstanding debt in the twelve months of 2020 compared to 2019 and the decreased Libor rates of our loans in 2020 compared to the previous year.

On average, 7.0 vessels were owned and operated during the twelve months of 2020 earning an average time charter equivalent rate of $9,387 per day compared to 7.0 vessels in the same period of 2019 earning on average $11,190 per day. In the twelve months of 2020, three vessels underwent special survey for a total cost of $2.3 million, as compared to two vessels that underwent special survey and one vessel that underwent an intermediate survey for a total cost of $1.7 million in the twelve months of 2019. For the twelve months of 2020, the Company recognized a $0.5 million loss on three interest rate swaps and a $0.3 million loss on FFA contracts as compared to a gain on derivatives of $0.5 million for the same period of 2019, comprising of a $0.8 million gain on FFA contracts and a $0.3 million loss on one interest rate swap.

Adjusted EBITDA for the twelve months of 2020 was $3.7 million compared to $10.3 million achieved during the twelve months of 2019.

Basic and diluted loss per share attributable to common shareholders for the twelve months of 2020 was $3.28, calculated on 2,275,062 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss of $0.85 per share for the twelve months of 2019, calculated on 2,251,439 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the year of the unrealized (gain) / loss on derivatives, the adjusted loss attributable to common shareholders for the year ended December 31, 2020 would have been $3.04 per share compared to a loss of $0.69 per share basic and diluted for 2019. As previously mentioned, usually, security analysts do not include the above item in their published estimates of earnings per share.

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Note:  

(*)

Represents the earliest redelivery date

(**) 

BPI stands for the Baltic Panamax Index; the average BPI 4TC is an index based on four time charter routes. 

(***)

The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.

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(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 incl. laid up. 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.

(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 our vessels. Our method of calculating TCE is determined by dividing time charter revenue and voyage charter revenue 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 or are related to repositioning the vessel for the next charter. 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, pool agreements 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 include 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 expenses 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, management fees and general and administrative expenses; drydocking expenses are not included. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

(15) Drydocking expenses 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. The Company expenses drydocking expenses as incurred.

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Conference Call and Webcast:

Tomorrow, February 17, 2021 at 10:00 a.m. Eastern Time, the Company's management will host a conference call and webcast to discuss the results. 

Conference Call details:

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238- 0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote "EuroDry" to the operator. 

A telephonic replay of the conference call will be available until February 23, 2021 by dialing 1 (866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44(0) 3333 009785 (Standard International Dial In) and the access code required for the replay is: 2489743#.

Audio webcast - Slides Presentation:

There will be a live and then archived audio webcast of the conference call, via the internet through the EuroDry website (www.eurodry.gr). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. A slide presentation on the Fourth Quarter 2020 results in PDF format will also be available 10 minutes prior to the conference call and webcast accessible on the company's website (www.eurodry.gr) on the webcast page. Participants to the webcast can download the PDF presentation. 

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