Euroseas Ltd. (NASDAQ: ESEA, the “Company” or “Euroseas”), an owner
and operator of container carrier vessels and provider of seaborne
transportation for containerized cargoes, announced today its
results for the three and six month periods ended June 30, 2022.
Second Quarter 2022 Financial
Highlights:
- Total net revenues of $48.5
million. Net income and net income attributable to common
shareholders of $30.7 million or $4.26 and $4.24 earnings per share
basic and diluted, respectively. Adjusted net income attributable
to common shareholders1 for the period was $29.6 million or $4.10
and $4.08 per share basic and diluted.
- Adjusted EBITDA1 was $34.2
million.
- An average of 16.46 vessels were
owned and operated during the second quarter of 2022 earning an
average time charter equivalent rate of $33,714 per day.
- Declared a quarterly dividend of
$0.50 per share for the second quarter of 2022 payable on or about
September 16, 2022 to shareholders of record on September 9, 2022
as part of the Company’s common stock dividend plan.
- As of August 10, 2022 we had
repurchased 40,196 of our common stock in the open market for $0.9
million, under our share repurchase plan of up to $20 million
announced in May 2022.
First Half 2022 Financial Highlights:
- Total net revenues of $93.9
million. Net income and net income attributable to common
shareholders of $60.7 million or $8.40 and $8.36 earnings per share
basic and diluted, respectively. Adjusted net income attributable
to common shareholders1 for the period was $56.4 million or $7.81
and $7.77 per share basic and diluted, respectively.
- Adjusted EBITDA1 was $65.3
million.
- An average of 16.23 vessels were
owned and operated during the first half of 2022 earning an average
time charter equivalent rate of $33,843 per day.
________________________1 Adjusted EBITDA,
Adjusted net income and Adjusted earnings per share are not
recognized measurements under US GAAP (GAAP) and should not be used
in isolation or as a substitute for Euroseas 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.
Aristides Pittas, Chairman and CEO of
Euroseas commented: “We are very pleased
with our results for the last quarter which are the best results we
have ever had since the inception of the company. The extremely
high charter coverage that we have achieved for the remainder of
the year but also for 2023 and 2024 suggest that we should continue
experiencing highly profitable quarters regardless of charter rates
development.
“One-year time charter rates decreased in July
and August by about 10-20% from their all-time highs but still
remain at record high levels by any historical comparison. The most
notable effect in the market place has been the lack of demand for
longer term (three-year plus) charters partly due to the limited
availability of vessels and partly because of the wait-and-see
attitude of charterers. It appears that demand for transport of
finished goods has been influenced by the geopolitical uncertainty
and fears of a looming recession fueled by increases in interest
rates used by central banks to fight inflation amongst other
reasons. In addition to this, the continuing COVID pandemic and its
regional flare-ups prompted some countries, mainly China, to impose
regional lock-downs that negatively affected containerized trade
but also contributed to the inefficiencies of the transportation
system.
“There are indeed question marks on how the
market will develop in 2023 and 2024 as various contradicting
forces come into play. The relatively high orderbook as a
percentage of the fleet is likely to result in increased deliveries
starting in the latter half of 2023 and during 2024 onwards but on
the other hand they will be offset by the effective capacity
reductions resulting from the scheduled introduction of the
regulations for the greenhouse gases (coming to effect from 2023
onwards) as the new regulations are expected to increase scraping
and lower the operating speed of the fleet.
“We feel well prepared to navigate such an
uncertain environment as our chartered fleet between now and the
end of 2024 is to generate significant cash flow reserves. We
intend to use the cash flow we are generating not only to reward
our shareholders via our on-going dividend and share repurchase
program but also to fund the equity portion of our nine-vessel
newbuilding program and still have a significant war chest to
pursue investment opportunities in an accretive way to our
shareholders.”
Tasos Aslidis, Chief Financial Officer
of Euroseas commented: “The results of the second quarter
of 2022 reflect the strong charter rates our vessels earned
compared to the same period of 2021. Our net revenues increased to
$48.5 million in the second quarter of 2022 compared to $18.3
million during the same period of last year. On a
per-vessel-per-day basis, our vessels earned a 127.0% higher
average charter rate in the second quarter of 2022 as compared to
the same period of 2021.
“Total daily vessel operating expenses,
including management fees, general and administrative expenses but
excluding drydocking costs, averaged $7,732 per vessel per day
during the second quarter of 2022 as compared to $6,860 per vessel
per day for the same quarter of last year, and $7,534 per vessel
per day for the first half of 2022 as compared to $6,887 per vessel
per day for the same period of 2021, reflecting a 12.7% and 9.4%
increase, respectively, which was mainly attributable to an
increase in hull and machinery insurance premiums, the increased
crewing costs for our vessels resulting from difficulties in crew
rotation due to COVID-19 related restrictions, and the increased
lubricants oil costs as a result of the war in Ukraine.
“Adjusted EBITDA during the second quarter of
2022 was $34.2 million versus $10.3 million in the second quarter
of last year. As of June 30, 2022, our outstanding debt (excluding
the unamortized loan fees) was $105.2 million versus restricted and
unrestricted cash of $10.5 million. As of the same date, our
scheduled bank debt repayments over the next 12 months amounted to
about $40.0 million (excluding the unamortized loan fees), and we
are in compliance with all our loan covenants.”
Second Quarter 2022 Results:For the second
quarter of 2022, the Company reported total net revenues of $48.5
million representing a 165.1% increase over total net revenues of
$18.3 million during the second quarter of 2021 which was a result
of the increased time charter rates our vessels earned in the
second quarter of 2022 compared to the same period of 2021 and the
increase in the average number of vessels owned and operated in the
second quarter of 2022 compared to the same period of 2021. On
average, 16.46 vessels were owned and operated during the second
quarter of 2022 earning an average time charter equivalent rate of
$33,714 per day compared to 14.00 vessels in the same period of
2021 earning on average $14,853 per day. The Company reported a net
income and net income attributable to common shareholders for the
period of $30.7 million, as compared to a net income of $7.9
million and a net income attributable to common shareholders of
$7.6 million, respectively, for the same period of 2021.
Vessel operating expenses were $9.4 million in
the second quarter of 2022 as compared to $6.9 million for the
second quarter of 2021. The increase is due to the higher average
number of vessels owned and operated in the second quarter of 2022
compared to the corresponding period of 2021, the increased crewing
costs for our vessels compared to the same period of 2021,
resulting from difficulties in crew rotation due to COVID-19
related restrictions, the higher prices in the supply of lubricants
and the increase in hull and machinery insurance premiums.
Depreciation expense for the second quarter of
2022 amounted to $4.1 million compared to $1.6 million for the same
period of 2021 due to the increased number of vessels in the
Company’s fleet and the fact that the new vessels acquired in the
fourth quarter of 2021 have a higher average daily depreciation
charge as a result of their higher acquisition price compared to
the remaining vessels.
Related party management fees for the second
quarter of 2022 were also slightly increased to $1.2 million from
$1.1 million for the same period of 2021 due to the higher number
of vessels in our fleet. General and administrative expenses
amounted to $1.0 million for the second quarter of 2022, as
compared to $0.7 million for the second quarter of 2021. This
increase is mainly attributable to the increased cost of our stock
incentive plan.
In the second quarter of 2022 one of our vessels
completed her intermediate survey in water, while another one was
drydocked in order to pass her special survey, which was completed
in the third quarter of 2022. The above drydocking expenses
amounted to $0.7 million during the second quarter of 2022. In the
corresponding period of 2021, the total cost was $0.1 million,
incurred in connection with upcoming drydockings.
During the second quarter of 2021 the Company
incurred other operating income of $1.1 million, net, mainly
consisting of the proceeds of a claim award related to the sale of
one of our vessels, M/V “Manolis P”, for scrap in March 2020 that
initially failed to be completed due to COVID-related reasons with
the vessel finally being sold to another buyer within the second
quarter of 2020. For the same period of 2022, the Company did not
incur any other operating income or expense.
Interest and other financing costs for the
second quarter of 2022 amounted to $1.1 million compared to $0.7
million for the same period of 2021. This increase is due to the
increased amount of debt and the increase in the weighted average
LIBOR rate in the current period compared to the same period of
2021.
For the three months ended June 30, 2022 the
Company recognized a $0.03 million loss on its interest rate swap
contracts. For the three months ended June 30, 2021 the Company
recognized a $0.1 million loss on its interest rate swap contract.
Adjusted EBITDA for the second quarter of 2022
was $34.2 million compared to $10.3 million achieved during the
second quarter of 2021.
Basic and diluted earnings per share
attributable to common shareholders for the second quarter of 2022
was $4.26 and $4.24, calculated on 7,224,424 basic and 7,258,436
diluted weighted average number of shares outstanding, compared to
basic and diluted earnings per share of $1.12 and $1.11,
respectively, for the second quarter of 2021, calculated on
6,778,829 basic and 6,826,305 diluted weighted average number of
shares outstanding.
Excluding the effect on the income attributable
to common shareholders of the unrealized gain on derivatives, the
amortization of below market time charters acquired and the vessel
depreciation on portion of the consideration of vessels acquired
with attached time charters allocated to below market time
charters, the adjusted earnings attributable to common shareholders
for the quarter ended June 30, 2022 would have been $4.10 per share
basic and $4.08 diluted, respectively, compared to adjusted
earnings of $1.12 per share basic and diluted for the quarter ended
June 30, 2021, after excluding unrealized loss on derivatives.
Usually, security analysts do not include the above item in their
published estimates of earnings per share.
First Half 2022 Results:For the first half of
2022, the Company reported total net revenues of $93.9 million
representing a 187.9% increase over total net revenues of $32.6
million during the first half of 2021. On average, the Company
owned and operated 16.23 vessels during the first half of 2022,
earning an average time charter equivalent rate of $33,843 per day.
For the same period of 2021 the Company owned and operated 14.0
vessels that earned on average $13,523 per day. The Company
reported a net income and net income attributable to common
shareholders for the period of $60.7 million, as compared to a net
income of $11.7 million and a net income attributable to common
shareholders of $11.1 million, for the first half of 2021.
Vessel operating expenses for the first half of
2022 amounted to $17.8 million as compared to $13.8 million for the
same period of 2021. The increase is due to the higher average
number of vessels owned and operated in the first half of 2022
compared to the corresponding period of 2021, in addition to the
increased crewing costs for our vessels compared to the same period
of 2021, resulting from difficulties in crew rotation due to
COVID-19 related restrictions, the higher prices in the supply of
lubricants and the increase in hull and machinery insurance
premiums.
Depreciation expenses for the first half of 2022
were $7.8 million compared to $3.2 million during the same period
of 2021, due to the increased number of vessels in the Company’s
fleet and the fact that the new vessels acquired in the fourth
quarter of 2021 have a higher average daily depreciation charge as
a result of their higher acquisition price compared to the
remaining vessels.
Related party management fees for the first half
of 2022 increased to $2.3 million from $2.1 million for the same
period of 2021 as a result of the higher number of vessels in our
fleet.
General and administrative expenses amounted to
$2.0 million for the first half of 2022, as compared to $1.5
million for the same period of 2021. This increase is mainly
attributable to the increased cost of our stock incentive plan.
In the first half of 2022 three of our vessels
completed their intermediate survey in water, one of our vessels
completed her special survey with drydock and another entered into
a drydock in order to complete her special survey; the latter was
completed within the third quarter of 2022. The total cost of the
drydockings for the first half of 2022 was $2.5 million. In the
same period of 2021, none of our vessels underwent drydocking and
certain expenses were incurred in connection with upcoming
drydockings.
Finally, during the first half of 2022 and 2021,
we had other operating expenses of $0.35 million and other
operating income of $1.3 million, respectively. The operating
expense for the first half of 2022 relates to the settlement of
accounts with charterers, while the operating income for the first
half of 2021 mainly consisted of the proceeds from a claim award
related to the sale of one of our vessels, M/V “Manolis P”, for
scrap in March 2020 that initially failed to be completed due to
COVID-related reasons with the vessel finally being sold to another
buyer within the second quarter of 2020.
Interest and other financing costs for the first
half of 2022 amounted to $2.1 million compared to $1.4 million for
the same period of 2021. This increase is due to the increased
amount of debt and the increase in the weighted average LIBOR rate
of our bank loans in the current period compared to the same period
of 2021. For the six months ended June 30, 2022 the Company
recognized a $2.3 million gain on its interest rate swap contracts.
For the six months ended June 30, 2021 the Company recognized a
$0.4 million gain on its interest rate swap
contract.
Adjusted EBITDA for the first half of 2022 was
$65.3 million compared to $15.9 million achieved during the first
half of 2021.
Basic and diluted earnings per share
attributable to common shareholders for the first half of 2022 was
$8.40 calculated on 7,223,189 basic and $8.36, calculated on
7,256,434 diluted weighted average number of shares outstanding
compared to basic and diluted earnings per share of $1.65 and $1.64
respectively, for the first half of 2021, calculated on 6,745,305
basic and 6,789,718 diluted weighted average number of shares
outstanding.
Excluding the effect on the income attributable
to common shareholders for the first half of the year of the
unrealized gain on derivatives, the amortization of below market
time charters acquired and the vessel depreciation on portion of
the consideration of vessels acquired with attached time charters
allocated to below market time charters, the adjusted earnings per
share attributable to common shareholders for the six-month period
ended June 30, 2022 would have been $7.81 and $7.77, basic and
diluted, respectively, compared to adjusted earnings of $1.58 per
share basic and $1.57 diluted for the same period in 2021, after
excluding unrealized gain on derivatives and loss on sale of a
vessel. As mentioned above, usually, security analysts do not
include the above items in their published estimates of earnings
per share.
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
Name |
Type |
Dwt |
TEU |
Year Built |
Employment(*) |
TCE Rate ($/day) |
Container Carriers |
|
|
|
|
|
|
MARCOS V(*) |
Intermediate |
72,968 |
6,350 |
2005 |
TC until Dec-24 plus 12 months option |
$42,200Option $15,000 |
AKINADA BRIDGE(+) |
Intermediate |
71,366 |
5,610 |
2001 |
TC until Nov-22 |
$20,000 |
SYNERGY BUSAN(*) |
Intermediate |
50,726 |
4,253 |
2009 |
TC until Aug-24 |
$25,000 |
SYNERGY ANTWERP(+) |
Intermediate |
50,726 |
4,253 |
2008 |
TC until Dec-23 |
$18,000 |
SYNERGY OAKLAND(*) |
Intermediate |
50,787 |
4,253 |
2009 |
TC until May-26 |
$42,000 |
SYNERGY KEELUNG(+) |
Intermediate |
50,969 |
4,253 |
2009 |
TC until Feb-23 |
$14,500 |
EMMANUEL P(*) |
Intermediate |
50,796 |
4,250 |
2005 |
TC until Mar-25 |
$19,000 |
RENA P(*) |
Intermediate |
50,796 |
4,250 |
2007 |
TC until Apr-24 then until Feb-25 |
$20,250then CONTEX(**) basis ($13,000 floor and $21,000
ceiling) |
EM KEA(*) |
Feeder |
42,165 |
3,100 |
2007 |
TC until May-23 |
$22,000 |
EM ASTORIA(*) |
Feeder |
35,600 |
2,788 |
2004 |
TC until Feb-23then until Feb-24then until Feb-25 |
$65,000$50,000$20,000 |
EVRIDIKI G(*) |
Feeder |
34,677 |
2,556 |
2001 |
TC until Feb-25 |
$40,000 |
EM CORFU(*) |
Feeder |
34,654 |
2,556 |
2001 |
TC until Feb-25 |
$40,000 |
DIAMANTIS P(*) |
Feeder |
30,360 |
2,008 |
1998 |
TC until Oct-24 |
$27,000 |
EM SPETSES(*) |
Feeder |
23,224 |
1,740 |
2007 |
TC until Aug-24 |
$29,500 |
JONATHAN P(*) |
Feeder |
23,357 |
1,740 |
2006 |
TC until Sep-24 |
$26,662(***) |
EM HYDRA(*) |
Feeder |
23,351 |
1,740 |
2005 |
TC until Apr-23 |
$20,000 |
JOANNA(+) |
Feeder |
22,301 |
1,732 |
1999 |
TC until Feb-23 |
$16,800 |
AEGEAN EXPRESS(*) |
Feeder |
18,581 |
1,439 |
1997 |
TC until Apr-25 |
$41,000 |
Total Container Carriers on the Water |
18 |
737,404 |
58,871 |
|
|
|
Vessels under construction |
Type |
Dwt |
TEU |
To be delivered |
Employment |
TCE Rate (4/day) |
GREGOS (*) (H4201) |
Feeder |
37,237 |
2,800 |
Q1 2023 |
TC until Mar-26 |
$48,000 |
TERATAKI (*) (H4202) |
Feeder |
37,237 |
2,800 |
Q2 2023 |
TC until Jun-26 |
$48,000 |
TENDER SOUL (H4236) |
Feeder |
37,237 |
2,800 |
Q4 2023 |
|
|
LEONIDAS Z (H4237) |
Feeder |
37,237 |
2,800 |
Q1 2024 |
|
|
MONICA (H4248) |
Feeder |
22,262 |
1,800 |
Q2 2024 |
|
|
STEPHANIA K (H4249) |
Feeder |
22,262 |
1,800 |
Q2 2024 |
|
|
PEPI STAR (H4250) |
Feeder |
22,262 |
1,800 |
Q2 2024 |
|
|
DEAR PANEL (H4251) |
Feeder |
37,237 |
2,800 |
Q4 2024 |
|
|
SYMEON P (H4252) |
Feeder |
37,237 |
2,800 |
Q4 2024 |
|
|
Total under construction |
9 |
290,208 |
22,200 |
|
|
|
Note:
(*) TC denotes time charter. Charter duration
indicates the earliest redelivery date; All dates listed are the
earliest redelivery dates under each TC unless the contract rate is
lower than the current market rate in which cases the latest
redelivery date is assumed; vessels with the latest redelivery date
shown are marked by (+).
(**)The CONTEX (Container Ship Time Charter
Assessment Index) has been published by the Hamburg and Bremen
Shipbrokers’ Association (VHBS) since October 2007. The CONTEX is a
company-independent index of time charter rates for container
ships. It is based on assessments of the current day charter rates
of six selected container ship types, which are representative of
their size categories: Type 1,100 TEU and Type 1,700 TEU with a
charter period of one year, and the Types 2,500, 2,700, 3,500 and
4,250 TEU all with a charter period of two years.
(***) Rate is net of commissions (commissions
are typically 5-6.25%).
Summary Fleet Data:
|
Three months, endedJune 30,
2021 |
|
Three months, endedJune 30,
2022 |
|
Six months, endedJune 30,
2021 |
|
Six months, endedJune 30,
2022 |
|
FLEET DATA |
|
|
|
|
Average number of vessels (1) |
14.00 |
|
16.46 |
|
14.00 |
|
16.23 |
|
Calendar days for fleet (2) |
1,274.0 |
|
1,498.0 |
|
2,534.0 |
|
2,938.0 |
|
Scheduled off-hire days incl. laid-up (3) |
0.0 |
|
6.2 |
|
0.0 |
|
58.6 |
|
|
|
|
|
|
|
|
|
|
Available days for fleet (4) = (2) - (3) |
1,274.0 |
|
1,491.8 |
|
2,534.0 |
|
2,879.4 |
|
Commercial off-hire days (5) |
0.0 |
|
0.0 |
|
0.0 |
|
5.3 |
|
Operational off-hire days (6) |
1.1 |
|
4.8 |
|
42.3 |
|
11.0 |
|
Voyage days for fleet (7) = (4) - (5) - (6) |
1,272.9 |
|
1,487.0 |
|
2,491.7 |
|
2,863.1 |
|
|
|
|
|
|
|
|
|
|
Fleet utilization (8) = (7) / (4) |
99.9 |
% |
99.7 |
% |
98.3 |
% |
99.4 |
% |
Fleet utilization, commercial (9) = ((4) - (5)) / (4) |
100.0 |
% |
100.0 |
% |
100.0 |
% |
99.8 |
% |
Fleet utilization, operational (10) = ((4) - (6)) / (4) |
99.9 |
% |
99.7 |
% |
98.3 |
% |
99.6 |
% |
|
|
|
|
|
AVERAGE DAILY RESULTS |
|
|
|
|
Time charter equivalent rate (11) |
14,853 |
|
33,714 |
|
13,523 |
|
33,843 |
|
Vessel operating expenses excl. drydocking expenses (12) |
6,279 |
|
7,080 |
|
6,295 |
|
6,867 |
|
General and administrative expenses (13) |
581 |
|
652 |
|
592 |
|
667 |
|
Total vessel operating expenses (14) |
6,860 |
|
7,732 |
|
6,887 |
|
7,534 |
|
Drydocking expenses (15) |
116 |
|
477 |
|
91 |
|
852 |
|
(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 Calendar days in a period net of scheduled off-hire days
including 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 rate, or TCE rate,
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 related party
management fees are calculated by dividing vessel operating
expenses and related party management fees 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, related
party 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.
Conference Call and
Webcast:Tomorrow, August 11, 2022 at 9:00 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: 877-405-1226
or +1 201-689-7823. Alternatively, the conference call can also be
accessed by using any of the international toll-free numbers listed
here. Please quote "Euroseas" or reference the ID number [13732107]
to the operator.
Audio Webcast - Slides
Presentation: There will be a live and then archived
webcast of the conference call and accompanying slides, available
through the Company’s website. To listen to the archived audio
file, visit our website http://www.euroseas.gr and click on
Company Presentations under our Investor Relations page
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 second quarter ended June 30, 2022 will
also be available in PDF format 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 number of shares)
|
Three Months EndedJune 30, |
Three Months EndedJune 30, |
Six Months EndedJune 30, |
Six Months EndedJune 30, |
|
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
|
(unaudited) |
(unaudited) |
Revenues |
|
|
|
|
Time charter revenue |
19,057,379 |
|
50,329,436 |
|
33,973,743 |
|
97,448,528 |
|
Commissions |
(766,732 |
) |
(1,849,827 |
) |
(1,373,981 |
) |
(3,595,381 |
) |
|
|
|
|
|
|
|
|
|
Net revenues |
18,290,647 |
|
48,479,609 |
|
32,599,762 |
|
93,853,147 |
|
|
|
|
|
|
Operating expenses/(income) |
|
|
|
|
Voyage expenses |
150,573 |
|
197,262 |
|
277,982 |
|
551,286 |
|
Vessel operating expenses |
6,937,767 |
|
9,431,572 |
|
13,802,119 |
|
17,830,465 |
|
Drydocking expenses |
147,175 |
|
714,818 |
|
229,384 |
|
2,502,744 |
|
Vessel depreciation |
1,596,543 |
|
4,106,538 |
|
3,193,086 |
|
7,827,654 |
|
Related party management fees |
1,061,816 |
|
1,173,912 |
|
2,148,221 |
|
2,345,944 |
|
Other operating (income) / expenses |
(1,080,000 |
) |
- |
|
(1,296,496 |
) |
350,000 |
|
General and administrative expenses |
739,674 |
|
977,409 |
|
1,500,651 |
|
1,960,481 |
|
|
|
|
|
|
|
|
|
|
Loss on sale of vessel |
- |
|
- |
|
9,417 |
|
- |
|
Total operating expenses |
9,553,548 |
|
16,601,511 |
|
19,864,364 |
|
33,368,574 |
|
|
|
|
|
|
Operating income |
8,737,099 |
|
31,878,098 |
|
12,735,398 |
|
60,484,573 |
|
|
|
|
|
|
Other (expenses)/income |
|
|
|
|
Interest and other financing costs |
(687,360 |
) |
(1,132,171 |
) |
(1,381,667 |
) |
(2,146,602 |
) |
(Loss) / gain on derivatives, net |
(96,765 |
) |
(32,613 |
) |
388,145 |
|
2,309,904 |
|
Foreign exchange (loss) / gain |
(7,263 |
) |
36,262 |
|
(7,504 |
) |
37,314 |
|
Interest income |
740 |
|
266 |
|
1,954 |
|
947 |
|
Other (expenses)/ income, net |
(790,648 |
) |
(1,128,256 |
) |
(999,072 |
) |
201,563 |
|
Net income |
7,946,451 |
|
30,749,842 |
|
11,736,326 |
|
60,686,136 |
|
Dividend Series B Preferred shares |
(117,055 |
) |
- |
|
(255,324 |
) |
- |
|
Preferred deemed dividend |
(259,067 |
) |
- |
|
(345,423 |
) |
- |
|
Net income attributable to common
shareholders |
7,570,329 |
|
30,749,842 |
|
11,135,579 |
|
60,686,136 |
|
Weighted average number of shares, basic |
6,778,829 |
|
7,224,424 |
|
6,745,305 |
|
7,223,189 |
|
Earnings per share, basic |
1.12 |
|
4.26 |
|
1.65 |
|
8.40 |
|
Weighted average number of shares, diluted |
6,826,305 |
|
7,258,436 |
|
6,789,718 |
|
7,256,434 |
|
Earnings per share, diluted |
1.11 |
|
4.24 |
|
1.64 |
|
8.36 |
|
Euroseas Ltd.Unaudited
Consolidated Condensed Balance Sheets(All amounts
expressed in U.S. Dollars – except number of shares)
|
December 31,2021 |
June 30,2022 |
|
|
|
ASSETS |
|
|
Current
Assets: |
|
|
Cash and cash equivalents |
26,530,944 |
4,952,773 |
Trade accounts receivable, net |
1,274,729 |
436,297 |
Other receivables |
1,722,885 |
1,056,763 |
Inventories |
2,274,454 |
2,425,346 |
Restricted cash |
167,285 |
175,234 |
Prepaid expenses |
382,729 |
685,848 |
Derivatives |
540,753 |
984,547 |
Total current
assets |
32,893,779 |
10,716,808 |
Fixed
assets: |
|
|
Vessels, net |
176,111,486 |
233,602,546 |
Long-term
assets: |
|
|
Advances for vessels under construction |
7,615,958 |
37,796,368 |
Derivatives |
- |
1,014,196 |
Restricted cash |
4,800,000 |
5,400,000 |
Total assets |
221,421,223 |
288,529,918 |
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
Current
liabilities: |
|
|
Long-term bank loans, current portion |
29,034,049 |
39,637,129 |
Trade accounts payable |
2,804,194 |
3,228,537 |
Accrued expenses |
1,702,925 |
1,720,132 |
Accrued dividends |
- |
31,675 |
Deferred revenue |
3,293,986 |
2,336,057 |
Due to related company |
309,970 |
100,564 |
Total current
liabilities |
37,145,124 |
47,054,094 |
|
|
|
Long-term
liabilities: |
|
|
Long-term bank loans, net of current portion |
89,004,951 |
64,797,943 |
Derivatives |
952,666 |
- |
Fair value of below market time charters acquired |
17,461,586 |
42,697,246 |
Total long-term
liabilities |
107,419,203 |
107,495,189 |
Total
liabilities |
144,564,327 |
154,549,283 |
|
|
|
Shareholders’
equity: |
|
|
|
Common stock (par value $0.03, 200,000,000 shares authorized,
7,294,541 and 7,279,939, issued and outstanding) |
218,836 |
|
218,398 |
Additional paid-in capital |
264,609,233 |
|
264,694,337 |
Accumulated deficit |
(187,971,173 |
) |
(130,932,100) |
Total shareholders’ equity |
76,856,896 |
|
133,980,635 |
Total liabilities and shareholders’ equity |
221,421,223 |
|
288,529,918 |
Euroseas Ltd.Unaudited
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
|
Six Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2022 |
|
|
|
|
Cash flows from operating
activities: |
|
Net income |
11,736,326 |
|
60,686,136 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
Vessel depreciation |
3,193,086 |
|
7,827,654 |
|
Amortization of deferred
charges |
98,560 |
|
166,993 |
|
Share-based compensation |
57,850 |
|
431,502 |
|
Unrealized gain on
derivatives |
(473,647 |
) |
(2,410,656 |
) |
Amortization of fair value of
below market time charters acquired |
- |
|
(3,063,787 |
) |
Loss on sale of vessel |
9,417 |
|
- |
|
Changes in operating assets and liabilities |
(511,343 |
) |
399,823 |
|
Net cash provided by operating activities |
14,110,249 |
|
64,037,665 |
|
|
|
|
Cash flows from investing
activities: |
|
|
Cash paid for vessels under
construction |
- |
|
(30,161,477 |
) |
Cash paid for vessel acquisitions
and capitalized expenses |
- |
|
(36,504,636 |
) |
Cash paid for vessel
improvements |
(225,136 |
) |
(580,791 |
) |
Net cash used in investing activities |
(225,136 |
) |
(67,246,904 |
) |
|
|
|
Cash flows from financing
activities: |
|
|
Redemption of Series B preferred
shares |
(2,000,000 |
) |
- |
|
Proceeds from issuance of common
stock, net of commissions paid |
743,553 |
|
- |
|
Cash paid for share
repurchase |
- |
|
(346,631 |
) |
Preferred dividends paid |
(91,608 |
) |
- |
|
Dividends paid |
- |
|
(3,615,593 |
) |
Repayment of long-term bank
loans |
(5,270,920 |
) |
(13,770,921 |
) |
Repayment of related party
loan |
(2,500,000 |
) |
- |
|
Offering expenses paid |
(60,357 |
) |
(27,838 |
) |
Net cash used in financing activities |
(9,179,332 |
) |
(17,760,983 |
) |
|
|
|
Net increase/ (decrease) in cash,
cash equivalents and restricted cash |
4,705,781 |
|
(20,970,222 |
) |
Cash, cash equivalents and restricted cash at beginning of
period |
6,338,177 |
|
31,498,229 |
|
Cash, cash equivalents and restricted cash at end of
period |
11,043,958 |
|
10,528,007 |
|
Cash
breakdown |
|
|
|
|
Cash and cash equivalents |
8,267,771 |
|
4,952,773 |
|
Restricted cash, current |
876,187 |
|
175,234 |
|
Restricted cash, long-term |
1,900,000 |
|
5,400,000 |
|
Total cash, cash equivalents and restricted cash shown in
the statement of cash flows |
11,043,958 |
|
10,528,007 |
|
Euroseas Ltd.
Reconciliation of Adjusted EBITDA to Net
income(All amounts expressed in U.S.
Dollars)
|
Three Months EndedJune 30,
2021 |
Three Months EndedJune 30,
2022 |
Six Months EndedJune 30,
2021 |
Six Months EndedJune 30,
2022 |
Net income |
7,946,451 |
30,749,842 |
|
11,736,326 |
|
60,686,136 |
|
Interest and other financing costs, net (incl. interest
income) |
686,620 |
1,131,905 |
|
1,379,713 |
|
2,145,655 |
|
Vessel depreciation |
1,596,543 |
4,106,538 |
|
3,193,086 |
|
7,827,654 |
|
Loss / (gain) on interest rate swap derivatives, net |
96,765 |
32,613 |
|
(388,145 |
) |
(2,309,904 |
) |
Amortization of below market time charters acquired |
- |
(1,845,547 |
) |
- |
|
(3,063,787 |
) |
Loss on sale of vessel |
- |
- |
|
9,417 |
|
- |
|
Adjusted EBITDA |
10,326,379 |
34,175,351 |
|
15,930,397 |
|
65,285,754 |
|
Adjusted EBITDA
Reconciliation:Euroseas Ltd. considers Adjusted EBITDA to
represent net income before interest, income taxes, depreciation,
loss / (gain) on interest rate swaps, amortization of below market
time charters acquired and loss on sale of vessel. Adjusted EBITDA
does not represent and should not be considered as an alternative
to net income, as determined by United States generally accepted
accounting principles, or 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 this non- GAAP financial measure assists our management and
investors by increasing the comparability of our performance from
period to period by excluding the potentially disparate effects
between periods of financial costs, loss / (gain) on interest rate
swaps, depreciation, amortization of below market time charters
acquired and loss on vessel sale. 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 income to Adjusted net
income(All amounts expressed in U.S. Dollars –
except share data and number of shares)
|
Three Months EndedJune 30,
2021 |
Three Months EndedJune 30,
2022 |
Six Months EndedJune
30, 2021 |
Six Months EndedJune 30,
2022 |
Net income |
7,946,451 |
|
30,749,842 |
|
11,736,326 |
|
60,686,136 |
|
Unrealized loss / (gain) on derivatives |
54,128 |
|
(26,892 |
) |
(473,647 |
) |
(2,410,656 |
) |
Amortization of below market time charters acquired |
- |
|
(1,845,547 |
) |
- |
|
(3,063,787 |
) |
Loss on sale of vessel |
- |
|
- |
|
9,417 |
|
- |
|
Vessel depreciation on portion of the consideration of vessels
acquired with attached time charters allocated to below market time
charters |
- |
|
709,793 |
|
- |
|
1,204,601 |
|
Adjusted net income |
8,000,579 |
|
29,587,196 |
|
11,272,096 |
|
56,416,294 |
|
Preferred dividends |
(117,055 |
) |
- |
|
(255,324 |
) |
- |
|
Preferred deemed dividend |
(259,067 |
) |
- |
|
(345,423 |
) |
- |
|
Adjusted net income attributable to common
shareholders |
7,624,457 |
|
29,587,196 |
|
10,671,349 |
|
56,416,294 |
|
Adjusted earnings per share, basic |
1.12 |
|
4.10 |
|
1.58 |
|
7.81 |
|
Weighted average number of shares, basic |
6,778,829 |
|
7,224,424 |
|
6,745,305 |
|
7,223,189 |
|
Adjusted earnings per share, diluted |
1.12 |
|
4.08 |
|
1.57 |
|
7.77 |
|
Weighted average number of shares, diluted |
6,826,305 |
|
7,258,436 |
|
6,789,718 |
|
7,256,434 |
|
Adjusted net income and Adjusted
earnings per share Reconciliation:Euroseas Ltd. considers
Adjusted net income to represent net income before unrealized loss
/ (gain) on derivatives, amortization of below market time charters
acquired, loss on sale of vessel and vessel depreciation on portion
of the consideration of vessels acquired with attached time
charters allocated to below market time charters. Adjusted net
income and Adjusted earnings 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 unrealized loss / (gain) on derivatives, loss on
sale of vessel, amortization of below market time charters acquired
and vessel depreciation on portion of the consideration of vessels
acquired with attached time charters allocated to below market time
charters, which items may significantly affect results of
operations between periods. Adjusted net income and Adjusted
earnings per share do not represent and should not be considered as
an alternative to net income or earnings per share, as determined
by GAAP. The Company's definition of Adjusted net income and
Adjusted earnings per share may not be the same as that used by
other companies in the shipping or other industries.
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
container shipping market. Euroseas' operations are managed by
Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified
affiliated ship management company, which is 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 18 vessels, including
10 Feeder containerships and 8 Intermediate containerships.
Euroseas 18 containerships have a cargo capacity of 58,871 teu.
After the delivery of nine feeder containership newbuildings in
2023 and 2024, Euroseas’ fleet will consist of 27 vessels with a
total carrying capacity of 81,071teu.
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 containerships, 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 our website www.euroseas.gr
Company Contact |
Investor Relations / Financial Media |
Tasos AslidisChief Financial
OfficerEuroseas Ltd.11 Canterbury Lane,Watchung, NJ 07069Tel. (908)
301-9091E-mail:aha@euroseas.gr |
Nicolas BornozisMarkella
KaraCapital Link, Inc.230 Park Avenue, Suite 1540New York, NY
10169Tel. (212) 661-7566E-mail:euroseas@capitallink.com |
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