ATHENS, Greece, Nov. 19, 2020 (GLOBE NEWSWIRE) — 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 nine-month period ended September 30, 2020.
Third
Quarter
2020
Highlights:
- Total net revenues of $12.3 million. Net income of $0.2 million; net income attributable to common shareholders (after a $0.2 million dividend on Series B Preferred Shares) of $0.03 million or $0.01 earnings per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $1.5 million or $0.261 per share basic and diluted.
- Adjusted EBITDA1 was $1.2 million.
- An average of 16.52 vessels were owned and operated during the third quarter of 2020 earning an average time charter equivalent rate of $8,403 per day.
- The Company declared a dividend of $0.2 million on its Series B Preferred Shares as required. The dividend will be paid in-kind by issuing additional Series B Preferred Shares.
- On August 3, 2020, the Company issued and sold 200,000 shares of its common stock through its at-the-market offering for net proceeds of approximately $0.7 million.
- In September 2020, the Company completed the sale of M/V Ninos for a total of approximately $2.3 million of net proceeds of which $1.0 million was used to repay the outstanding loan of the vessel.
Nine Months 2020 Highlights:
- Total net revenues of $41.3 million. Net income of $3.5 million; net income attributable to common shareholders (after a $0.5 million dividend on Series B Preferred Shares) of $2.9 million or $0.52 earnings per share basic and diluted. Adjusted net income attributable to common shareholders1 for the period was $0.9 million or $0.151 per share basic and diluted.
- Adjusted EBITDA1 was $9.7 million.
- An average of 18.17 vessels were owned and operated during the first nine months of 2020 earning an average time charter equivalent rate of $9,171 per day.
Recent developments
| In November 2020, the Company completed the sale of M/V EM Athens for a total of approximately $4.9 million of net proceeds of which $3.75 million was used to repay the outstanding loan of the vessel. Also, in November 2020, the Company made a supplementary payment of $125,000 in common shares for each of the four vessels it acquired in November 2019 pursuant to the terms of the purchase agreement. The payment was contingent to certain market indices exceeding an agreed upon level, and as a result, the Company issued a total of approximately 161,000 common shares. |
Aristides Pittas, Chairman and CEO of Euroseas commented
:
“Over the second and third quarters of this year we disposed four of our vessels, including the three eldest ones in our fleet, while in November we also sold the M/V EM Athens, a vessel that would have faced a significant drydocking expense later this year. After the above sales, our fleet numbers 14 vessels with an average age of 15.5 years. In parallel, since July, the feeder and intermediate containership markets have been getting stronger every week reaching –and for several size vessels exceeding – the highs observed over the last decade. If the present levels of rates are sustained, we expect that our vessels will generate significant cash flow and earnings, especially, when the present legacy charters are replaced with ones reflecting the levels of the market.
We are cautiously optimistic about the charter rate developments over the next year as we believe the potential return to normality after the pandemic could restore containerized trade to pre-pandemic -or, likely, higher- growth rates. Such a development when combined with the very low expected fleet growth, as the orderbook is at its lowest level of, at least, the last two decades, could support the current level of charter rates and even propel them to higher levels. We believe our current fleet is well positioned in terms of type and size of vessels to take full advantage of such developments.”
Tasos Aslidis, Chief Financial Officer of Euroseas commented:
“The results of the third quarter of 2020 reflect the increased net revenues compared to the same period of 2019 as we operated an average of 16.52 vessels, versus 13.5 vessels during the same period last year, partly offset by the slightly lower time charter rates our vessels earned in the third quarter of 2020 compared to the corresponding period of 2019. At the same time, total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, during the third quarter of 2020, averaged $6,759 per vessel per day, as compared to $6,388 for the same period of last year and $6,234 per vessel per day for the first nine months of 2020 as compared to $6,348 per vessel per day for the same period of 2019. The increased operating expenses for the third quarter of 2020 is mainly due to increased crewing costs for our vessels compared to the same period of 2019, resulting from difficulties in crew rotation due to COVID-19 related restrictions. In that respect, we are pleased to report that we have been able to rotate the crews on all of our vessels; the safety and well-being of our crew and the safety of our vessel operations are our first priority.
Adjusted EBITDA during the third quarter of 2020 was $1.2 million versus $1.6 million in the third quarter of last year, and it reached $9.7 million versus $4.1 million for the respective nine-month periods of 2020 and 2019.
As of September 30, 2020, our outstanding debt (excluding the unamortized loan fees) was $75.5 million versus restricted and unrestricted cash of $4.8 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $14.7 million excluding the unamortized loan fees).”
Third
Quarter
2020
Results:
For the third quarter of 2020, the Company reported total net revenues of $12.3 million representing a 19.7% increase over total net revenues of $10.3 million during the third quarter of 2019 which was the result of the increased average number of vessels operating in the third quarter of 2020, partly offset by the lower time charter rates our vessels earned in the third quarter of 2020 compared to the corresponding period of 2019. The Company reported net income for the period of $0.2 million and net income attributable to common shareholders of $0.03 million, as compared to a net loss of $0.2 million and a net loss attributable to common shareholders of $0.3 million respectively, for the third quarter of 2019. The results for the third quarter of 2020 include a $0.3 million amortization of below market time charters acquired and a $1.3 million of net gain on sale of vessels. Related party management fees for the three months ended September 30, 2020 were $1.4 million compared to $0.9 million for the same period of 2019. The increase is due to the higher average number of vessels operated by the Company in the third quarter of 2020 as compared to the same period of 2019. Depreciation expense for the third quarter of 2020 was $1.6 million as compared to $1.1 million for the same period of 2019 due to the increased number of vessels operated by the Company.
Vessel operating expenses for the same period of 2020 amounted to $8.2 million as compared to $6.3 million for the same period of 2019. The increased amount is mainly due to the higher number of vessels owned and operated in the three months of 2020 compared to the same period of 2019. Additionally, some of our vessels incurred increased crewing costs in the third quarter of 2020 compared to the same period of 2019, resulting from difficulties in crew rotation due to COVID-19 related restrictions.
On average, 16.52 vessels were owned and operated during the third quarter of 2020 earning an average time charter equivalent rate of $8,403 per day compared to 13.5 vessels in the same period of 2019 earning on average $8,554 per day.
Interest and other financing costs for the third quarter of 2020 amounted to $0.9 million compared to $0.8 million for the same period of 2019. This increase is due to the increased amount of debt in the current period compared to the same period of 2019, partly offset by the decreased Libor rates of our bank loans during the period as compared to the same period of last year.
Adjusted EBITDA1 for the third quarter of 2020 was $1.2 million compared to $1.6 million achieved during the third quarter of 2019.
Basic and diluted earnings per share attributable to common shareholders for the third quarter of 2020 was $0.01 calculated on 5,708,610 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.10 for the third quarter of 2019, calculated on 3,283,551 basic and diluted weighted average number of shares outstanding.
Excluding the effect on the loss attributable to common shareholders for the quarter of the amortization of below market time charters acquired, the net gain on sale of vessels and the unrealized loss on derivative, the adjusted loss attributable to common shareholders for the quarter ended September 30, 2020 would have been $0.26 per share basic and diluted compared to an adjusted loss of $0.15 per share basic and diluted for the quarter ended September 30, 2019. Usually, security analysts do not include the above items in their published estimates of earnings per share.
Nine Months
2020
Results:
For the first nine months of 2020, the Company reported total net revenues of $41.3 million representing a 54.5% increase over total net revenues of $26.7 million during the first nine months of 2019, as a result of the increased average number of vessels combined with the higher time charter rates our vessels earned in the first nine months of 2020 compared to the corresponding period of 2019. The Company reported net income for the period of $3.5 million and net income attributable to common shareholders of $2.9 million, as compared to a net loss of $0.9 million and a net loss attributable to common shareholders of $2.5 million, respectively, for the first nine months of 2019. The results for the first nine months of 2020 include a $1.3 million net gain on sale of vessels, $1.5 million of amortization of below market time charters acquired, a $0.1 loss on write down of vessel held for sale and $0.6 million of unrealized loss on derivative. The results for the first nine months of 2019 include $0.2 million of amortization of below market time charters acquired and $0.04 million of unrealized gain on derivative. Related party management fees for the nine months ended September 30, 2020 were $4.0 million compared to $2.5 million for the same period of 2019. The increase is due to the higher average number of vessels operated by the Company in the first nine months of 2020 as compared to the same period of 2019. Depreciation expense for the first nine months of 2020 was $5.0 million compared to $2.7 million during the same period of 2019.
Vessel operating expenses for the same period of 2020 amounted to $24.7 million as compared to $16.1 million for the same period of 2019. The increased amount is mainly due to the higher number of vessels owned and operated in the nine months of 2020 compared to the same period of 2019.
Drydocking expenses amounted to $0.4 million for the nine months of 2020 (one vessel passed its intermediate survey in-water and two vessels their special survey in-water), compared to $1.2 million for the same period of 2019 where one of our vessels completed her special survey with drydock, another one completed her intermediate survey in-water and one vessel entered into drydock that was completed in the fourth quarter of 2019.
On average, 18.17 vessels were owned and operated during the first nine months of 2020 earning an average time charter equivalent rate of $9,171 per day compared to 11.83 vessels in the same period of 2019 earning on average $8,638 per day.
Interest and other financing costs for the first nine months of 2020 amounted to $3.3 million compared to $2.3 million for the same period of 2019. This increase is due to the increased amount of debt in the current period compared to the same period of 2019, partly offset by the decreased Libor rates of our bank loans during the period as compared to the same period of last year. Adjusted EBITDA1 for the first nine months of 2020 was $9.7 million compared to $4.1 million during the first nine months of 2019.
Basic and diluted earnings per share attributable to common shareholders for the first nine months of 2020 were $0.52, calculated on 5,621,159 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $1.19 for the first nine months of 2019, calculated on 2,129,233 basic and diluted weighted average number of shares outstanding.
Excluding the effect on the income attributable to common shareholders for the first nine months of 2020 of the unrealized loss on derivative, the net gain on sale of vessels, the loss on write down of vessel held for sale and the amortization of the below market time charters acquired, the adjusted earnings per share attributable to common shareholders for the nine-month period ended September 30, 2020 would have been $0.15, compared to an adjusted loss of $1.30 per share basic and diluted for the same period in 2019. As mentioned above, usually, security analysts do not include the above items in their published estimates of earnings per share.
Fleet Profile:
The Euroseas Ltd. fleet profile as of November 17, 2020, is as follows:
| Name | Type | Dwt | TEU | Year Built | Employment(*) | TCE Rate ($/day) | |
|
Container Carriers |
|||||||
| AKINADA BRIDGE | Intermediate | 71,366 | 5,610 | 2001 | TC until Nov-21 plus 10-12 months option | $17,250; option $20,000 |
|
| SYNERGY BUSAN | Intermediate | 50,726 | 4,253 | 2009 | TC until Feb-21 plus 4-6 months option | $8,100; option $12,000 |
|
| SYNERGY ANTWERP | Intermediate | 50,726 | 4,253 | 2008 | TC until Mar-21 | $8,000 | |
| SYNERGY OAKLAND | Intermediate | 50,787 | 4,253 | 2009 | TC until Jun-21 | CONTEX(**) 4,250 TEU less 10% |
|
| SYNERGY KEELUNG | Intermediate | 50,969 | 4,253 | 2009 | TC until Dec-20/Jun-22 plus 8-12 months option | $10,000 until Jun-21; $11,750 until Jun-22; option $14,500 |
|
| EM KEA (+) | Feeder | 42,165 | 3,100 | 2007 | TC until Jun-21 | $8,100 | |
| EM ASTORIA (+) | Feeder | 35,600 | 2,788 | 2004 | TC until Dec-20 | $8,500 | |
| EM CORFU | Feeder | 34,654 | 2,556 | 2001 | TC until Sep-21 | $10,200 | |
| EVRIDIKI G | Feeder | 34,677 | 2,556 | 2001 | TC until Dec-20 | $8,250 | |
| DIAMANTIS P. | Feeder | 30,360 | 2,008 | 1998 | TC until Aug-21 | $6,500 | |
| EM SPETSES | Feeder | 23,224 | 1,740 | 2007 | TC until Nov-20 plus 5-7 months option | $7,000; option $8,100 | |
| EM HYDRA | Feeder | 23,351 | 1,740 | 2005 | TC until Feb-21 | $7,200 | |
| JOANNA | Feeder | 22,301 | 1,732 | 1999 | TC until Feb-21 | $8,050 | |
| AEGEAN EXPRESS | Feeder | 18,581 | 1,439 | 1997 | TC until Dec-20 | $5,900 | |
| Total Container Carriers |
1 4 |
539,487 |
4 2 , 281 |
||||
Note:
(*) Represents the earliest redelivery date under each time charter 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.
Summary Fleet Data:
|
Three M onths, E nded September 30, 2019 |
Three M onths, E nded September 30, 2020 |
Nine M onths, E nded September 30, 2019 |
Nine Months, Ended September 30, 2020 |
|||||
| FLEET DATA | ||||||||
| Average number of vessels (1) | 13.50 | 16.52 | 11.83 | 18.17 | ||||
| Calendar days for fleet (2) | 1,242.0 | 1,520.0 | 3,233.0 | 4,978.0 | ||||
| Scheduled off-hire days incl. laid-up (3) | 6.5 | – | 42.8 | 210.3 | ||||
| Available days for fleet (4) = (2) – (3) | 1,235.5 | 1,520.0 | 3,190.2 | 4,767.7 | ||||
| Commercial off-hire days (5) | – | 32.3 | 38.4 | 132.1 | ||||
| Operational off-hire days (6) | 0.9 | 1.8 | 1.3 | 71.5 | ||||
| Voyage days for fleet (7) = (4) – (5) – (6) | 1,234.6 | 1,485.9 | 3,150.5 | 4,564.1 | ||||
| Fleet utilization (8) = (7) / (4) | 99.9 | % | 97.8 | % | 98.8 | % | 95.7 | % |
| Fleet utilization, commercial (9) = ((4) – (5)) / (4) | 100.0 | % | 97.9 | % | 98.8 | % | 97.2 | % |
| Fleet utilization, operational (10) = ((4) – (6)) / (4) | 99.9 | % | 99.9 | % | 100.0 | % | 98.5 | % |
|
AVERAGE DAILY RESULTS (usd/day) |
||||||||
| Time charter equivalent rate (11) | 8,554 | 8,403 | 8,638 | 9,171 | ||||
| Vessel operating expenses excl. drydocking expenses (12) | 5,858 | 6,307 | 5,756 | 5,777 | ||||
| General and administrative expenses (13) | 530 | 452 | 592 | 457 | ||||
| Total vessel operating expenses (14) | 6,388 | 6,759 | 6,348 | 6,234 | ||||
| Drydocking expenses (15) | 333 | 40 | 365 | 88 | ||||
(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, vessels committed for sale or vessels that suffered unrepaired damages, are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up, or of vessels that were committed for sale or suffered unrepaired damages.
(4) Available days. We define available days as the Calendar days in a period net of scheduled off-hire days as defined above. 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 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 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.
Conference Call and Webcast:
Tomorrow, Friday, November 20, 2020 at 9:30 a.m. Eastern Standard Time 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 (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 “Euroseas” to the operator.
A telephonic replay of the conference call will be available until Thursday, November 26, 2020, 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). 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 Third Quarter 2020 results 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
number of
share
s
)
|
Three Months Ended September 30, 2019 |
Three Months Ended September 30, 2020 |
Nine Months Ended September 30, 2019 |
Nine Months Ended September 30, 2020 |
||||||
| Revenues | |||||||||
| Time charter revenue | 10,783,133 | 12,882,144 | 27,952,803 | 43,148,575 | |||||
| Commissions | (484,708 | ) | (553,920 | ) | (1,234,728 | ) | (1,878,833 | ) | |
|
Net revenue s |
10,2 98 ,4 25 |
1 2 , 328 , 224 |
26, 718 , 075 |
41 , 269 , 742 |
|||||
| Operating expenses | |||||||||
| Voyage expenses | 222,389 | 395,743 | 737,952 | 1,290,792 | |||||
| Vessel operating expenses | 6,326,195 | 8,180,727 | 16,114,329 | 24,710,877 | |||||
| Drydocking expenses | 413,591 | 60,737 | 1,181,614 | 437,106 | |||||
| Vessel depreciation | 1,090,126 | 1,615,111 | 2,687,550 | 5,001,837 | |||||
| Related party management fees | 948,931 | 1,406,437 | 2,496,070 | 4,048,805 | |||||
| Net gain on sale of vessels | – | (1,305,016 | ) | – | (1,305,016 | ) | |||
| General and administrative expenses | 658,013 | 686,928 | 1,913,764 | 2,274,205 | |||||
| Other operating income | – | – | – | (2,687,205 | ) | ||||
| Loss on write down of vessel held for sale | – | – | – | 121,165 | |||||
| Total operating expenses | 9,659,245 |
11 , 040 , 667 |
25,131,279 |
3 3 , 892 , 566 |
|||||
| Operating income | 639,180 |
1, 287 , 557 |
1,586,796 |
7 , 377 , 176 |
|||||
| Other income/(expenses) | |||||||||
| Interest and other financing costs | (810,203 | ) | (930,886 | ) | (2,272,181 | ) | (3,320,074 | ) | |
| Loss on debt extinguishment | – | – | (328,291 | ) | – | ||||
| Loss on derivative, net | – | (96,485 | ) | (2,885 | ) | (564,631 | ) | ||
| Foreign exchange gain / (loss) | 8,725 | (44,721 | ) | 7,875 | (42,538 | ) | |||
| Interest income | 5,065 | 3,411 | 91,141 | 16,191 | |||||
| Other expenses, net | (796,413 | ) |
( 1,068 , 6 81 |
) |
(2, 504 , 341 |
) |
( 3 , 911 , 052 |
) | |
|
Net (loss) / income |
(157,233 | ) |
21 8 , 876 |
(917,545 | ) |
3, 466 , 124 |
|||
| Dividend Series B Preferred shares | (161,315 | ) | (185,552 | ) | (1,110,467 | ) | (524,621 | ) | |
| Preferred deemed dividend | – | – | (504,577 | ) | – | ||||
|
Net ( loss ) / income attributable to common shareholders |
(318,548 | ) |
33 , 324 |
(2,532,589 | ) |
2 , 941 , 503 |
|||
| Weighted average number of shares outstanding, basic and diluted | 3,283,551 | 5,708,610 | 2,129,233 | 5,621,159 | |||||
|
(L oss ) / e arnings per share, basic and diluted |
(0. 1 0 |
) |
0. 0 1 |
( 1 . 19 |
) |
0. 52 |
|||
Euroseas Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)
|
December 31, 2019 |
September 30, 2020 |
|||
| ASSETS | ||||
|
Current Assets : |
||||
| Cash and cash equivalents | 985,418 | 2,271,069 | ||
| Trade accounts receivable, net | 715,097 | 1,114,449 | ||
| Other receivables | 1,570,506 | 1,552,352 | ||
| Inventories | 1,889,164 | 2,214,978 | ||
| Restricted cash | 610,376 | 208,593 | ||
| Prepaid expenses | 526,531 | 300,203 | ||
| Total current assets |
6 , 297 , 092 |
7 , 66 1, 644 |
||
| Fixed Assets: | ||||
| Vessels, net | 116,230,333 | 103,068,797 | ||
| Long-term assets: | ||||
| Restricted cash | 4,334,267 | 2,334,267 | ||
| Total assets |
126 , 861 , 692 |
113 , 064 , 708 |
||
|
LIABILITIES , MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY |
||||
|
Current liabilities : |
||||
| Long-term bank loans, current portion | 12,295,320 | 10,059,860 | ||
| Related party loan, current | 5,000,000 | 4,375,000 | ||
| Trade accounts payable | 3,899,967 | 2,717,260 | ||
| Accrued expenses | 1,725,321 | 1,491,029 | ||
| Accrued preferred dividends | 161,315 | – | ||
| Derivative | – | 336,420 | ||
| Deferred revenue | 973,774 | 550,298 | ||
| Due to related company | 795,562 | 328,133 | ||
| Total current liabilities |
24 , 851 , 259 |
19 , 85 8,000 |
||
| Long-term liabilities | ||||
| Long -term bank loans, net of current portion | 72,187,785 | 60,563,619 | ||
| Derivative | – | 246,430 | ||
| Fair value of below market time charters acquired | 1,714,370 | 240,639 | ||
| Total long term liabilities |
73 , 902 , 155 |
61 , 050,688 |
||
| Total liabilities |
98 , 753 , 414 |
80 , 908 , 688 |
||
| Mezzanine equity: | ||||
| Series B Preferred shares (par value $0.01, 20,000,000 shares authorized, 8,000 and 8,363 issued and outstanding, respectively) |
7 , 654 , 577 |
8 , 019 , 636 |
||
| Shareholders’ equity: | ||||
| Common stock (par value $0.03, 200,000,000 shares authorized, 5,600,259 and 5,800,259 issued and outstanding) | 168,008 | 174,008 | ||
| Additional paid-in capital | 253,967,708 | 254,702,888 | ||
| Accumulated deficit | (233,682,015 | ) | (230,740,512 | ) |
| Total shareholders’ equity |
20 , 453 , 701 |
24,136,384 |
||
| Total liabilities, mezzanine equity and shareholders’ equity |
126 , 861 , 692 |
11 3 , 064 , 708 |
||
Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
| Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | |||
| Cash flows from operating activities: | ||||
| Net (loss) / income | (917,545 | ) | 3,466,124 | |
| Adjustments to reconcile net (loss) / income to net cash provided by operating activities: | ||||
| Vessel depreciation | 2,687,550 | 5,001,837 | ||
| Amortization of deferred charges | 154,959 | 216,524 | ||
| Share-based compensation | 72,404 | 91,546 | ||
| Net gain on sale of vessels | – | (1,305,016 | ) | |
| Loss on write down of vessel held for sale | – | 121,165 | ||
| Gain on hull and machinery claim | – | (2,687,205 | ) | |
| Amortization of fair value of below market time charters acquired | (184,950 | ) | (1,473,731 | ) |
| Unrealized (gain) / loss on derivative | (41,435 | ) | 582,850 | |
| Amortization of debt discount | 95,214 | – | ||
| Loss on debt extinguishment | 328,291 | – | ||
| Changes in operating assets and liabilities | 739,918 | (2,309,846 | ) | |
|
Net cash provided by operating activities |
2,934,406 |
1,704,248 |
||
| Cash flows from investing activities: | ||||
| Cash paid for vessel acquisitions and capitalized expenses | (15,153,626 | ) | – | |
| Cash paid for vessel improvements | – | (451,846 | ) | |
| Proceeds from vessels sale | – | 9,752,649 | ||
| Insurance proceeds | 2,226,140 | |||
|
Net cash (used in) / provided by investing activities |
(15,153,626 | ) |
11, 526 , 943 |
|
| Cash flows from financing activities: | ||||
| Proceeds from issuance of common stock, net of commissions paid | – | 715,550 | ||
| Redemption of Series B preferred shares | (11,686,000 | ) | – | |
| Preferred dividends paid | (870,512 | ) | (320,877 | ) |
| Loan arrangement fees paid | (214,500 | ) | – | |
| Offering expenses paid | – | (40,846 | ) | |
| Proceeds from long- term bank loans | 28,167,680 | – | ||
| Proceeds from related party loan | 2,500,000 | – | ||
| Repayment of long-term bank loans and vessel profit participation liability | (11,516,000 | ) | (14,076,150 | ) |
| Repayment of related party loan | – | (625,000 | ) | |
|
Net cash provided by / (used in) financing activities |
6,380,668 | (14,347,323 | ) | |
| Net decrease in cash, cash equivalents and restricted cash | (5,838,552 | ) | (1,116,132 | ) |
| Cash, cash equivalents and restricted cash at beginning of period | 13,211,588 | 5,930,061 | ||
| Cash, cash equivalents and restricted cash at end of period |
7 , 373 , 036 |
4 , 813 , 929 |
||
| Cash breakdown | ||||
| Cash and cash equivalents | 3,164,030 | 2,271,069 | ||
| Restricted cash, current | 624,739 | 208,593 | ||
| Restricted cash, long term | 3,584,267 | 2,334,267 | ||
| Total cash, cash equivalents and restricted cash shown in the statement of cash flows |
7 , 373 , 036 |
4 , 813 , 929 |
||
Euroseas Ltd.
Reconciliation of Net
income / (
loss
) to Adjusted EBITDA
(All amounts expressed in U.S. Dollars)
|
Three Months Ended September 30, 2019 |
Three Months Ended September 30, 2020 |
Nine Months Ended September 30, 2019 |
Nine Months Ended September 30, 2020 |
|||||
| Net (loss) / income | (157,233 | ) | 218,876 | (917,545 | ) | 3,466,124 | ||
| Interest and other financing costs, net (incl. interest income and loss on debt extinguishment) | 805,138 | 927,475 | 2,509,331 | 3,303,883 | ||||
| Vessel depreciation | 1,090,126 | 1,615,111 | 2,687,550 | 5,001,837 | ||||
| Net gain on sale of vessels | – | (1,305,016 | ) | – | (1,305,016 | ) | ||
| Loss on write down of vessel held for sale | – | – | – | 121,165 | ||||
| Amortization of below market time charters acquired | (184,950 | ) | (312,892 | ) | (184,950 | ) | (1,473,731 | ) |
| Loss on interest rate swap derivative | – | 96,485 | 2,885 | 564,631 | ||||
|
Adjusted EBITDA |
1,553,081 |
1,240 , 039 |
4,097,271 |
9 , 678 , 893 |
||||
Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net income / (loss) before interest, income taxes, depreciation, loss on interest rate swap, net gain on sale of vessels, loss on write down of vessel held for sale and amortization of below market time charters acquired. Adjusted EBITDA does not represent and should not be considered as an alternative to net income / (loss), 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 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, net gain on sale of vessels, loss on write down of vessel held for sale, amortization of below market time charters acquired and loss on interest rate swap, and depreciation. 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 number of shares)
|
Three Months Ended September 30, 2019 |
Three Months Ended September 30, 2020 |
Nine Months Ended September 30, 2019 |
Nine Months Ended September 30, 2020 |
|||||
| Net (loss) / income | (157,233 | ) | 218,876 | (917,545 | ) | 3,466,124 | ||
| Unrealized loss / (gain) on derivative | – | 114,704 | (41,435 | ) | 582,850 | |||
| Net gain on sale of vessels | – | (1,305,016 | ) | – | (1,305,016 | ) | ||
| Loss on write down of vessel held for sale | – | – | – | 121,165 | ||||
| Amortization of below market time charters acquired | (184,950 | ) | (314,434 | ) | (184,950 | ) | (1,473,731 | ) |
|
Adjusted net ( loss ) / income |
(342,183 | ) |
( 1, 285 , 870 |
) | (1,143,930 | ) |
1, 391 , 392 |
|
| Preferred dividends | (161,315 | ) | (185,552 | ) | (1,110,467 | ) | (524,621 | ) |
| Preferred deemed dividend | – | – | (504,577 | ) | – | |||
|
Adjusted net ( loss ) / income attributable to common shareholders |
(503,498 | ) |
( 1, 471 , 422 |
) | (2,758,974 | ) |
866 , 771 |
|
| Adjusted (loss) / earnings per share, basic and diluted | (0.15 | ) | (0.26 | ) | (1.30 | ) | 0.15 | |
| Weighted average number of shares, basic and diluted | 3,283,551 | 5,708,610 | 2,129,233 | 5,621,159 | ||||
Adjusted net
(
loss
) / income
and Adjusted
(
loss
) / earnings
per share
Reconciliation:
Euroseas Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized loss / (gain) on derivative, net gain on sale of vessels, loss on write down of vessel held for sale and amortization of below market time charters acquired. Adjusted net (loss) / income and Adjusted (loss) / 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 derivative, net gain on sale of vessels, loss on write down of vessel held for sale and amortization of below market time charters acquired, which items may significantly affect results of operations between periods.
Adjusted net (loss) / income and Adjusted (loss) / earnings per share do not represent and should not be considered as an alternative to net (loss) / income or (loss) / earnings per share, as determined by GAAP. The Company’s definition of Adjusted net (loss) / income and Adjusted (loss) / 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 14 vessels, including 9 Feeder containerships and 5 Intermediate Container carriers. Euroseas 14 containerships have a cargo capacity of 42,281 teu.
Forward Looking Statement
This 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 Aslidis Chief Financial Officer Euroseas Ltd. 11 Canterbury Lane, Watchung, NJ 07069 Tel. (908) 301-9091 E-mail: [email protected] |
Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: [email protected] |
1Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under U.S. 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.