MAROUSSI, ATHENS, GREECE -- (Marketwire) -- 08/11/09 -- Euroseas Ltd. (NASDAQ: ESEA), an
owner and operator of drybulk and container carrier vessels and provider of
seaborne transportation for drybulk and containerized cargoes, announced
today its results for the three and six month periods ended June 30, 2009.
Second Quarter 2009 Highlights:
-- Net loss of $5.4 million or $0.18 loss per share basic and diluted on
total net revenues of $14.8 million. Excluding the effect of unrealized
loss on derivatives, unrealized gain on trading securities and amortization
of the fair value of charters acquired, the net income for the period would
have been $0.5 million, or $0.02 per share basic and diluted.
-- Adjusted EBITDA was $5.8 million. Please refer to a subsequent section
of the Press Release for a reconciliation of adjusted EBITDA to net income.
-- An average of 16 vessels were owned and operated during the second
quarter of 2009 earning an average time charter equivalent rate of $13,062
per day.
-- Declared a quarterly dividend of $0.10 per share for the second
quarter of 2009 payable on September 4, 2009 to shareholders of record on
August 27, 2009. This is the sixteenth consecutive quarterly dividend
declared.
First Half 2009 Highlights:
-- Net loss of $1.5 million or $0.05 loss per share basic and diluted on
total net revenues of $30.2 million. Excluding the effect of unrealized
loss on derivatives, unrealized gain on trading securities and amortization
of the fair value of charters acquired, the net income for the period would
have been $2.4 million, or $0.08 per share basic and diluted.
-- Adjusted EBITDA was $12.0 million. Please refer to a subsequent
section of the Press Release for a reconciliation of adjusted EBITDA to net
income.
-- An average of 15.85 vessels were owned and operated during the first
half of 2009, earning an average time charter equivalent rate of $12,875
per day.
-- Declared two quarterly dividends for a total of $0.20 per share during
the first half of 2009.
Aristides Pittas, Chairman and CEO of Euroseas, commented: "The first half
of 2009 presented us with a mix of opportunities and challenges: it has
proven to be a very difficult chartering environment for our container
fleet, but, at the same time, it gave us the opportunity to expand and
renew our bulker fleet by purchasing three younger panamax bulkers at
attractive prices. We continue evaluating further investment opportunities
in drybulk vessels and containerships as we see unique opportunities
potentially emerging in both subsectors.
"As we have stated before, we expect to face a difficult and volatile
market environment well into 2010. Thus, we have covered 100% of our
drybulk fleet for 2009 and 75% for 2010 via either time charter contracts
or Freight Forward Agreement ("FFA") contracts. Our containership coverage
is currently 57% for the remaining of 2009 and 22% for 2010. We have
started seeing some signs that the container market as well may have passed
its trough, especially, in the case of containerships below 2,000 teu, like
ours. The number of smaller containerships being laid up has decreased and
there is more enquiry for such ships than for larger vessels, most likely
due to a better balance between supply and demand: the fleet supply side
reflects a significantly lower orderbook and more scrapping due to the
older age profile, and, the demand side reflects a relative increased
activity as shipment sizes tend to reduce in periods of austerity, thus
favoring smaller vessels, and intra-regional trade is faring better
compared to trade across the oceans.
"Our Board reconfirmed its intention to continue paying healthy dividends
to our shareholders throughout the market cycle without compromising our
expansion program. In that respect, we have maintained our quarterly
dividend at $0.10 per share which represents a yield of about 7.6% on the
basis of our stock price on July 31, 2009."
Tasos Aslidis, Chief Financial Officer of Euroseas, commented: "The results
of the second quarter of 2009 reflect the lower level of the charter
markets compared to the same period a year ago. Our results were
negatively influenced by non-cash losses mainly on FFA contracts despite
some non-cash gains on interest rate swaps.
"Total daily vessel operating expenses, including management fees and
general and administrative expenses, during the second quarter of 2009
reflect a decreased by about 19% on a per vessel per day basis compared to
the second quarter of 2008. Part of this decrease (about 8%) is due to the
fact that three of our vessels were laid-up during the second quarter of
2009 and, thus, incurred significantly lower daily costs, but, a
significant part (about 11%) is associated with the success of our
manager's cost reduction and optimization plan launched in mid-2008. Cost
control remains a key component of our strategy.
"As of June 30, 2009, our net debt position was close to zero with our
outstanding debt at $69.5 million versus restricted and unrestricted cash
of about $68.4 million. As of the same date, our scheduled debt repayments
over the next 12 months amounted to about $12.3 million a number low enough
to provide us with significant operational cash flow comfort. I would like
to repeat that we continue to enjoy our bankers' support and have been able
to finance all three of our vessel purchases this year with about 50% debt
as further evidenced by the $13 million loan we about to conclude to partly
finance M/V 'Pantelis,' a vessel that we purchased last month."
Second Quarter 2009 Results:
For the second quarter of 2009, the Company reported total net revenues of
$14.8 million representing a 56.9% decrease over total net revenues of
$34.5 million during the second quarter of 2008. The Company reported a net
loss for the period of $5.4 million as compared to net income of $15.6
million for the second quarter of 2008. The results for the second quarter
of 2009 include a $6.3 million net unrealized loss on derivatives and
trading securities as compared to $0.2 million unrealized gain on trading
securities for the same period of 2008. Depreciation expenses for the
second quarter of 2009 were $4.8 million compared to $7.5 million during
the same period of 2008. The decline was due to a change in estimates (see
below) and the sale of M/V Nikolaos P and M/V Ioanna P, which contributed
$2.0 million to the depreciation expenses in the second quarter of 2008,
partly balanced by the depreciation of two vessels purchased in 2009. On
average, 16 vessels were owned and operated during the second quarter of
2009 earning an average time charter equivalent rate of $13,062 per day
compared to 15.44 vessels in the same period of 2008 earning on average
$25,918 per day. Three of the Company's containerships were laid-up
throughout the second quarter of 2009.
Adjusted EBITDA for the second quarter of 2009 was $5.8 million, a 71.9%
decrease from $20.7 million achieved during the second quarter of 2008.
Please see below for Adjusted EBITDA reconciliation to net income and cash
flow provided by operating activities.
Basic and diluted loss per share for the second quarter of 2009 was $0.18,
calculated on 30,575,611 weighted average number of shares outstanding,
compared to basic and diluted earnings per share of $0.51 for the second
quarter of 2008, calculated on 30,428,810 and 30,554,537 weighted average
number of shares outstanding, respectively.
Excluding the effect on the earnings for the quarter of the unrealized loss
on derivatives, unrealized gain on trading securities and amortization of
the fair value of time charter contracts acquired, the earnings per share
for the quarter ended June 30, 2009 would have been $0.02 per share basic
and diluted, and, for the quarter ended June 30, 2008 would have been $0.43
per share basic and diluted. Usually, security analysts do not include the
above items in their published estimates of earnings per share.
First Half 2009 Results:
For the first half of 2009, the Company reported total net revenues of
$30.2 million representing a 55.2% decrease over total net revenues of
$67.3 million during the first half of 2008. The Company reported a net
loss for the period of $1.5 million as compared to net income of $29.3
million for the first half of 2008. The results for the first half of 2009
include a $4.5 million net unrealized loss on derivatives and trading
securities as compared to $0.2 million unrealized gain on trading
securities for the same period of 2008. Depreciation expenses for the first
half of 2009 were $9.3 million compared to $14.8 million during the same
period of 2008. The decline was due to a change in estimates (see below)
and the sale of M/V Nikolaos P and M/V Ioanna P, which contributed $4.0
million to the depreciation expenses in the first half of 2008, partly
balanced by the depreciation of two of the vessels purchased in 2009 that
contributed to the depreciation expense for the first half. On average,
15.85 vessels were owned and operated during the first half of 2009 earning
an average time charter equivalent rate of $12,875 per day compared to
15.22 vessels in the same period of 2008 earning on average $25,824 per
day. One of the Company's vessels was laid up during the entire first half
of 2009 and two more vessels for the second quarter of 2009.
Adjusted EBITDA for the first half of 2009 was $12.0 million, a 69.6%
decrease from $39.4 million achieved during the first half of 2008. Please
see below for Adjusted EBITDA reconciliation to net income and cash flow
provided by operating activities.
Basic and diluted loss per share for the first half of 2009 was $0.05,
calculated on 30,575,611 weighted average number of shares outstanding,
compared to basic and diluted earnings per share of $0.96 basic and diluted
per share for the first half of 2008, calculated on 30,375,182 and
30,501,654 weighted average number of shares outstanding, respectively.
Excluding the effect on the earnings for the first half of 2009 of the
unrealized loss on derivatives, unrealized gain on trading securities and
amortization of the fair value of time charter contracts acquired, the
earnings per share for the six-month period ended June 30, 2009 would have
been $0.08 per share basic and diluted, and, for the same period in 2008
would have been $0.81 per share basic and diluted. Usually, security
analysts do not include the above items in their published estimates of
earnings per share.
Change in accounting principle and change in estimates:
Beginning with the first quarter of 2009, the Company changed its
accounting policy of drydocking costs from the deferral method, under which
the Company amortized drydocking costs over the estimated period of benefit
between drydockings, to the direct expense method, under which the Company
expenses all drydocking costs as incurred. The Company believes that the
direct expense method is preferable as it eliminates the significant amount
of time and subjectivity involved in determining which costs and activities
related to drydocking qualify for the deferral method. When the accounting
principle was retrospectively applied, net income for the three-month and
for the six-month periods ended June 30, 2008 decreased by $0.1 and $1.6
million, respectively.
The Company reflected this change as a change in accounting principle from
an accepted accounting principle to a preferable accounting principle in
accordance with Statement of Financial Accounting Standards No. 154,
Accounting Changes and Error Corrections. The new accounting principle will
be applied retrospectively to all periods presented in earnings releases
and filings.
During the fourth quarter of 2008, the Company also changed its estimates
of the scrap price and useful life of its containerships to better reflect
the present market environment, industry practice and intended use. The
effect of these changes increased net income for the three and six-month
periods ended June 30, 2009 by $1.6 and $3.3 million, respectively.
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
Year
Name Type Dwt TEU Built Employment TCERate ($/day)
------------ ------- ------ ----- --------- -----------------
Dry Bulk
Vessels
------------ ------- ------ ----- --------- -----------------
TC 'til
PANTELIS Panamax 74,020 2000 Dec-09 $25,200
------------ ------- ------ ----- --------- -----------------
TC 'til
ELENI P Panamax 72,119 1997 May-10 $15,350
------------ ------- ------ ----- --------- -----------------
Baumarine
IRINI (*) Panamax 69,734 1988 Pool
------------ ------- ------ ----- --------- -----------------
TC 'til
ARISTIDES N.P. Panamax 69,268 1993 Jan-10 $12,350
------------ ------- ------ ----- --------- -----------------
Bulk-
MONICA P (**) handling
Handymax 46,667 1998 Pool
------------ ------- ------ ----- --------- -----------------
GREGOS Handysize 38,691 1984 Spot
------------ ------- ------ ----- --------- -----------------
Total Dry
Bulk Vessels 6 370,499
------------ ------- ------ ----- --------- -----------------
Multipurpose
Dry Cargo
Vessels
------------ ------- ------ ----- --------- -----------------
$9,500
TC 'til 'til Dec-10,
TASMAN TRADER 1 22,568 950 1990 Mar-12 $9,000
'til Mar-12
------------ ------- ------ ----- --------- -----------------
Container
Carriers
------------ ------- ------ ----- --------- -----------------
$16,800
TC 'til 'til Aug-11
Aug-11 $18,735
(3 annual 'til Aug-12
MAERSK Intermediate 34,677 2,556 2001 options $19,240
NOUMEA 'til 'til Aug-13
Aug-14) $19,750
'til Aug-14
------------ ------- ------ ----- --------- -----------------
TIGER TC 'til
BRIDGE Intermediate 31,627 2,228 1990 Mar-10 $7,500
------------ ------- ------ ----- --------- -----------------
ARTEMIS Intermediate 29,693 2,098 1987 Laid-up
------------ ------- ------ ----- --------- -----------------
DESPINA P Handy size 33,667 1,932 1990 Laid-up
------------ ------- ------ ----- --------- -----------------
JONATHAN P
(ex-OEL
INTEGRITY) Handy size 33,667 1,932 1990 Laid-up
------------ ------- ------ ----- --------- -----------------
OEL TRANSWORLD
(ex-CLAN TC 'til
GLADIATOR) Handy size 30,007 1,742 1992 Sep-09 $18,000
------------ ------- ------ ----- --------- -----------------
TC 'til
Sep-09
(option
'til
YM XINGANG I Handy size 23,596 1,599 1993 Dec-09) $3,850
------------ ------- ------ ----- --------- -----------------
TC 'til
MANOLIS P Handy size 20,346 1,452 1995 Oct-09 $15,800
------------ ------- ------ ----- --------- -----------------
NINOS
(ex-YM TC 'til
QINGDAO I) Feeder 18,253 1,169 1990 Apr-10 $8,060
------------ ------- ------ ----- --------- -----------------
TC 'til
Dec-09
(option
'til
KUO HSIUNG Feeder 18,154 1,169 1993 Jun-10) $3,850
------------ ------- ------ ----- --------- -----------------
Total
Container
Carriers 10 273,687 17,877
------------ ------- ------ ----- --------- -----------------
Fleet Grand
Total 17 666,754 18,827
------------ ------- ------ ----- --------- -----------------
(*) "IRINI" is employed in the Baumarine spot pool that is managed by
Klaveness, a major global charterer in the dry bulk area.
(**) "Monica P" is employed in the Bulkhandling spot pool that is also
managed by Klaveness.
Summary Fleet Data:
3 3 6 6
months, months, months, months,
ended ended ended ended
June 30, June 30, June 30, June 30,
2008 2009 2008 2009
------- ------- ------- -------
FLEET DATA
Average number of vessels (1) 15.44 16.00 15.22 15.85
Calendar days for fleet (2) 1,405.0 1,456.0 2,770.0 2,869.0
Scheduled off-hire days incl.
