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,
2018.
The Spin-off
On May 30, 2018, the Company spun-off its
drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier,
which was agreed to be sold) into EuroDry Ltd., a separate publicly
listed company also listed on the Nasdaq Capital Market.
Shareholders of the Company received one EuroDry Ltd. share for
every five shares of the Company they held. As a result of the
spin-off and the subsequent sale of M/V Monica P, the Company has
become a pure containership company and the only publicly listed
company concentrating on the feeder containership sector.
The results below refer to Euroseas Ltd.
“continuing operations” excluding the contribution from Euroseas
Ltd. of vessels spun-off into EuroDry Ltd. in May 2018
(“discontinued operations”); historical comparative periods have
been adjusted accordingly.
Third Quarter 2018
Highlights:
- Total net revenues of $8.3 million.
Net loss of $0.9 million; net loss attributable to common
shareholders (after a $0.2 million dividend on Series B Preferred
Shares) of $1.1 million or $0.10 loss per share basic and
diluted. Adjusted net loss attributable to common
shareholders1 for the period was $1.1 million or
$0.101 per share basic and diluted.
- Adjusted EBITDA1 was $0.6
million.
- An average of 11.0 vessels were
owned and operated during the third quarter of 2018 earning an
average time charter equivalent rate of $9,704 per day.
- The Company declared its nineteenth
dividend of $0.2 million on its Series B Preferred Shares; the
dividend was paid in-kind by issuing additional Series B Preferred
Shares.
First Nine Months 2018
Highlights:
- Total net revenues of $26.4
million. Net loss of $0.1 million; net loss attributable to common
shareholders (after a $1.1 million dividend on Series B Preferred
Shares) of $1.2 million or $0.11 loss per share basic and
diluted. Adjusted net loss per share attributable to common
shareholders1 for the period was $2.5 million or $0.231 per share
basic and diluted.
- Adjusted EBITDA1 was
$3.1 million.
- An average of 11.64 vessels were
owned and operated during the first nine months of 2018 earning an
average time charter equivalent rate of $9,371 per day.
_________________________________________1Adjusted EBITDA,
Adjusted net loss and Adjusted 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.
Aristides Pittas, Chairman and CEO of
Euroseas commented: “The feeder containership markets have
softened since July with rates declining gradually and with
chartering activity levels dropping notably, especially, for larger
vessels. As a result of this slowdown, our largest containership,
M/V Akinada Bridge, also experienced some idle time during the
quarter. Despite the slowdown, which we expect to continue through
the upcoming holiday period, near and medium term market prospects
appear positive assuming that trade tensions do not escalate
further. With orderbook-to-fleet ratio still at historically low
levels and the implementation of emissions and water ballast
treatment regulations looming, we expect that supply pressures over
the next couple of years will be minimal; thus, trade growth will
shape demand for ships and market rate levels. Within this
framework, we have tried to position Euroseas – the only publicly
listed company focused on the feeder sector – to be ready to take
advantage of any investment opportunities either in the form of
single vessel acquisitions, or, by exploiting our public platform
to consolidate other fleets and taking advantage of our efficient
operating cost structure.”
Tasos Aslidis, Chief Financial Officer
of Euroseas commented: “The results of the third quarter
of 2018 reflect the state of the containership market and the fact
that one of our vessels was undergoing repairs while another one
was partly idle. Our vessels earned during the quarter rates that
on average were approximately 22% higher than the daily rates
earned during the same period of 2017 and did we not have the
vessel under repair and idle time mentioned above we would likely
have turned a positive result for the period.
“Total daily vessel operating expenses,
including management fees, general and administrative expenses but
excluding drydocking costs, remained at the same levels for the
third quarter as compared to the same period of last year and
increased by about 5.1% for the nine month period ended September
30, 2018 over the same period of 2017. Adjusted EBITDA during the
third quarter of 2018 was $0.6 million versus $0.5 million in the
third quarter of last year, and it reached $3.1 million versus $0.4
million for the respective nine-month periods of 2018 and 2017.
“As of September 30, 2018, our outstanding debt
(excluding the unamortized loan fees) was $31.8 million versus
restricted and unrestricted cash of $4.6 million. As of the same
date, our scheduled debt repayments over the next 12 months
amounted to about $4.3 million (excluding the unamortized loan
fees).”
Third Quarter 2018 Results:For
the third quarter of 2018, the Company reported total net revenues
of $8.3 million representing a 45.7% increase over total net
revenues of $5.7 million during the third quarter of 2017. The
Company reported net loss for the period of $0.9 million and a net
loss attributable to common shareholders of $1.1 million, as
compared to a net loss of $5.5 million and a net loss attributable
to common shareholders of $5.9 million respectively, for the third
quarter of 2017. The results for the third quarter of 2018 include
a $0.02 million of unrealized gain on derivative and a $0.08
million realized loss on derivative. The results for the third
quarter of 2017 include a $4.6 million loss on the write-down of
two vessels classified as held for sale. Drydocking expenses
amounted to $1.3 million during the third quarter of 2018
comprising the drydocking cost of one vessel that underwent
drydocking. Depreciation expense for the third quarter of 2018 was
$0.8 million slightly lower compared to the same period of 2017.
Although the average number of vessels increased the new vessels
acquired have a lower average daily depreciation charge as a result
of their lower acquisition cost and greater remaining useful life
compared to the remaining vessels.
On average, 11.0 vessels were owned and operated
during the third quarter of 2018 earning an average time charter
equivalent rate of $9,704 per day compared to 9.02 vessels in the
same period of 2017 earning on average $7,094 per day.
Adjusted EBITDA1 for the third quarter of 2018
was $0.6 million compared to $0.5 million achieved during the third
quarter of 2017. Please see below for Adjusted EBITDA
reconciliation to net loss.
Basic and diluted loss per share attributable to
common shareholders for the third quarter of 2018 was $0.10
calculated on 11,183,899 basic and diluted weighted average number
of shares outstanding, compared to basic and diluted loss per share
of $0.53 for the third quarter of 2017, calculated on 11,093,672
basic and diluted weighted average number of shares
outstanding.
Excluding the effect on the loss attributable to
common shareholders for the quarter of the gain /loss on
derivative, the adjusted net loss per share attributable to common
shareholders for the quarter ended September 30, 2018 would have
been $0.10 per share basic and diluted compared to adjusted net
loss of $0.12 per share basic and diluted for the quarter ended
September 30, 2017. Usually, security analysts do not include the
above items in their published estimates of earnings per share.
First Nine Months 2018
Results:For the first nine months of 2018, the Company
reported total net revenues of $26.4 million representing a 65.4%
increase over total net revenues of $16.0 million during the first
nine months of 2017. The Company reported a net loss for the period
of $0.1 million and a net loss attributable to common shareholders
of $1.2 million, as compared to net loss of $7.6 million and a net
loss attributable to common shareholders of $9.0 million,
respectively, for the first nine months of 2017. The results for
the first nine months of 2018 include a $1.3 million gain on sale
of a vessel, $0.1 million of unrealized gain on derivative and a
$0.2 million of realized loss on derivative. The results for the
first nine months of 2017 include a $0.02 million loss on
derivative, a $0.5 million gain on sale of a vessel, and a $4.6
million loss on write-down on two vessels held for sale.
Depreciation expense for the first nine months of 2018 was $2.5
million compared to $2.9 million during the same period of 2017.
Although the average number of vessels increased, one vessel which
was held for sale during the second semester of 2018 did not
contribute to the depreciation charge and the new vessels acquired
have a lower average daily depreciation charge as a result of their
lower acquisition cost and greater remaining useful life compared
to the remaining vessels.
Vessel operating expenses for the same period of
2018 amounted to $15.4 million as compared to $10.5 million for the
same period of 2017. The increased amount is mainly due to the
higher number of vessels owned and operated in the nine months of
2018 compared to the same period of 2017.
Drydocking expenses amounted to $2.4 million for
the nine months of 2018 (three of our vessels completed their
special surveys with drydocks and another two completed their
intermediate surveys in-water), compared to $0.1 million for the
same period of 2017 where one of our vessels completed its
intermediate survey.
On average, 11.64 vessels were owned and
operated during the first nine months of 2018 earning an average
time charter equivalent rate of $9,371 per day compared to 8.58
vessels in the same period of 2017 earning on average $6,993 per
day.
Interest and other financing costs for the first
nine months of 2018 amounted to $2.1 million compared to $1.1
million for the same period of 2017. This increase is due to the
increased amount of debt and increased LIBOR in the current period
compared to the same period of 2017.
Adjusted EBITDA1 for the first nine months of
2018 was $3.1 million compared to $0.4 million during the first
nine months of 2017. Please see below for Adjusted EBITDA
reconciliation to net loss.
Basic and diluted loss per share attributable to
common shareholders for the first nine months of 2018 was $0.11,
calculated on 11,150,659 basic and diluted weighted average number
of shares outstanding compared to basic and diluted loss per share
of $0.81 for the first nine months of 2017, calculated on
11,051,957 basic and diluted weighted average number of shares
outstanding.
Excluding the effect on the loss attributable to
common shareholders for the first nine months of 2018 of the net
loss on derivative, the gain on sale of a vessel and the loss on
write down of vessels held for sale, the adjusted net loss per
share attributable to common shareholders for the nine-month period
ended September 30, 2018 would have been $0.23 compared to adjusted
net loss of $0.44 per share basic and diluted for the same period
in 2017. Usually, security analysts do not include the above items
in their published estimates of earnings per share.
Fleet Profile: The Euroseas
Ltd. fleet profile is as follows:
Name |
Type |
Dwt |
TEU |
Year Built |
Employment(*) |
TCE Rate
($/day) |
Container Carriers |
|
|
|
|
|
|
AKINADA BRIDGE |
Intermediate |
71,366 |
5,610 |
2001 |
Idle |
|
EM ASTORIA |
Feeder |
35,600 |
2,788 |
2004 |
TC until Aug-19 |
$9,650 |
EM CORFU |
Feeder |
34,654 |
2,556 |
2001 |
TC until Dec-18 |
$9,950 |
EVRIDIKI G |
Feeder |
34,677 |
2,556 |
2001 |
TC until Dec-18 |
$9,950 |
EM ATHENS |
Feeder |
32,350 |
2,506 |
2000 |
TC until Mar-19 |
$10,400 |
EM OINOUSSES |
Feeder |
32,350 |
2,506 |
2000 |
TC until Mar-19 |
$ 9,500 |
JOANNA |
Feeder |
22,301 |
1,732 |
1999 |
In drydock |
|
MANOLIS P |
Feeder |
20,346 |
1,452 |
1995 |
TC until Apr-19 |
$9,500 |
AEGEAN EXPRESS |
Feeder |
18,581 |
1,439 |
1997 |
TC until Jan-19 |
$9,250 |
KUO HSIUNG |
Feeder |
18,154 |
1,169 |
1993 |
TC until Mar-19 |
$9,750 |
NINOS |
Feeder |
18,253 |
1,169 |
1990 |
TC until Mar-19 |
$9,750 |
Total Container Carriers |
11 |
338,632 |
25,483 |
|
|
|
Summary Fleet Data:
|
ThreeMonths,EndedSeptember30,
2017 |
|
ThreeMonths,EndedSeptember30,
2018 |
|
NineMonths, EndedSeptember30,
2017 |
|
NineMonths,EndedSeptember30,
2018 |
|
FLEET DATA |
|
|
|
|
Average number of vessels (1) |
9.02 |
|
11.00 |
|
8.58 |
|
11.64 |
|
Calendar days for fleet (2) |
830.0 |
|
1,012.0 |
|
2,343.0 |
|
3,178.0 |
|
Scheduled off-hire days incl. laid-up (3) |
4.1 |
|
31.2 |
|
76.1 |
|
68.9 |
|
Available days for fleet (4) = (2) - (3) |
825.9 |
|
980.8 |
|
2,266.9 |
|
3,109.1 |
|
Commercial off-hire days (5) |
0.0 |
|
20.8 |
|
42.4 |
|
45.7 |
|
Operational off-hire days (6) |
0.0 |
|
92.3 |
|
6.2 |
|
161.3 |
|
Voyage days for fleet (7) = (4) - (5) - (6) |
825.9 |
|
867.7 |
|
2,218.3 |
|
2,902.1 |
|
Fleet utilization (8) = (7) / (4) |
100.0% |
|
88.5% |
|
97.9% |
|
93.3% |
|
Fleet utilization, commercial (9) = ((4) - (5)) / (4) |
100.0% |
|
97.9% |
|
98.1% |
|
98.5% |
|
Fleet utilization, operational (10) = ((4) - (6)) / (4) |
100.0% |
|
90.6% |
|
99.7% |
|
94.8% |
|
|
|
|
|
|
AVERAGE DAILY RESULTS |
|
|
|
|
Time charter equivalent rate (11) |
7,094 |
|
9,704 |
|
6,993 |
|
9,371 |
|
Vessel operating expenses excl. drydocking expenses (12) |
5,381 |
|
5,399 |
|
5,219 |
|
5,722 |
|
General and administrative expenses (13) |
656 |
|
594 |
|
838 |
|
646 |
|
Total vessel operating expenses (14) |
6,037 |
|
5,993 |
|
6,057 |
|
6,368 |
|
Drydocking expenses (15) |
125 |
|
1,248 |
|
60 |
|
767 |
|
(1) Average number of vessels is the number of
vessels that constituted the Company’s fleet for the relevant
period, as measured by the sum of the number of calendar days each
vessel was a part of the Company’s fleet during the period divided
by the number of calendar days in that period.
(2) Calendar days. We define calendar days as
the total number of days in a period during which each vessel in
our fleet was in our possession including off-hire days associated
with major repairs, drydockings or special or intermediate surveys
or days of vessels in lay-up. Calendar days are an indicator of the
size of our fleet over a period and affect both the amount of
revenues and the amount of expenses that we record during that
period.
(3) The scheduled off-hire days including
vessels laid-up are days associated with scheduled repairs,
drydockings or special or intermediate surveys or days of vessels
in lay-up.
(4) Available days. We define available days as
the total number of days in a period during which each vessel in
our fleet was in our possession net of scheduled off-hire days
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, or TCE, is a measure of the
average daily revenue performance of a vessel on a per voyage
basis. Our method of calculating TCE is determined by dividing
revenue generated from voyage charters net of voyage expenses by
voyage days for the relevant time period. Voyage expenses primarily
consist of port, canal and fuel costs that are unique to a
particular voyage, which would otherwise be paid by the charterer
under a time charter contract, 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 other general and administrative expense by
fleet calendar days for the relevant time period.
(14) Total vessel operating expenses, or TVOE,
is a measure of our total expenses associated with operating our
vessels. TVOE is the sum of vessel operating expenses, management
fees and other 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, which include expenses
during drydockings that would have been capitalized and amortized
under the deferral method divided by the fleet calendar days for
the relevant period. Drydocking expenses could vary substantially
from period to period depending on how many vessels underwent
drydocking during the period. The Company expenses drydocking
expenses as incurred.
Conference Call and Webcast:Tomorrow, Friday,
November 16, 2018 at 11:00 a.m. Eastern 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 Friday, November 23, 2018, 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 2018
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 shares) |
|
|
Three MonthsEnded September 30, |
|
Three MonthsEnded September 30, |
|
Nine Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2018 |
|
2017 |
|
2018 |
|
|
|
|
|
|
Revenues |
|
|
|
|
Voyage revenue |
6,003,534 |
|
8,793,275 |
|
16,730,329 |
|
27,834,560 |
|
Related party revenue |
60,000 |
|
- |
|
180,000 |
|
- |
|
Commissions |
(334,640 |
) |
(444,228 |
) |
(940,645 |
) |
(1,428,265 |
) |
Net revenue, continuing
operations |
5,728,894 |
|
8,349,047 |
|
15,969,684 |
|
26,406,295 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Voyage expenses |
144,760 |
|
372,821 |
|
1,217,387 |
|
639,528 |
|
Vessel operating expenses |
3,799,090 |
|
4,586,421 |
|
10,457,937 |
|
15,445,744 |
|
Drydocking expenses |
103,781 |
|
1,263,207 |
|
141,559 |
|
2,438,573 |
|
Vessel depreciation |
980,027 |
|
798,712 |
|
2,877,809 |
|
2,507,238 |
|
Related party management fees |
667,146 |
|
877,629 |
|
1,769,247 |
|
2,738,638 |
|
Gain on sale of vessel |
- |
|
- |
|
(516,561 |
) |
(1,340,952 |
) |
Other general and administrative expenses |
544,238 |
|
601,350 |
|
1,963,209 |
|
2,052,258 |
|
Loss on write-down of vessels held for sale |
4,595,819 |
|
- |
|
4,595,819 |
|
- |
|
Total operating expenses, continuing
operations |
10,834,861 |
|
8,500,140 |
|
22,506,406 |
|
24,481,027 |
|
|
|
|
|
|
Operating (loss) / income,
continuing operations |
(5,105,967 |
) |
(151,093 |
) |
(6,536,722 |
) |
1,925,268 |
|
|
|
|
|
|
Other income/(expenses) |
|
|
|
|
Interest and other financing costs |
(376,288 |
) |
(717,676 |
) |
(1,062,952 |
) |
(2,062,728 |
) |
Gain / (loss) on derivative, net |
7,808 |
|
(50,528 |
) |
(21,245 |
) |
(45,374 |
) |
Foreign exchange loss |
(13,320 |
) |
- |
|
(30,916 |
) |
(3,263 |
) |
Interest income |
13,296 |
|
21,521 |
|
29,395 |
|
60,145 |
|
Other expenses, net, continuing
operations |
(368,504 |
) |
(746,683 |
) |
(1,085,718 |
) |
(2,051,220 |
) |
Net loss, continuing
operations |
(5,474,471 |
) |
(897,776 |
) |
(7,622,440 |
) |
(125,952 |
) |
Dividend Series B Preferred shares |
(458,623 |
) |
(240,994 |
) |
(1,344,408 |
) |
(1,091,701 |
) |
Net loss of continuing operations available to common
shareholders |
(5,933,094 |
) |
(1,138,770 |
) |
(8,966,848 |
) |
(1,217,653 |
) |
Loss, per share, basic and diluted, continuing operations |
(0,53 |
) |
(0,10 |
) |
(0,81 |
) |
(0,11 |
) |
Weighted average number of shares outstanding, basic and
diluted |
11,093,672 |
|
11,183,899 |
|
11,051,957 |
|
11,150,659 |
|
Net income / (loss) attributable to common shareholders,
discontinued operations |
650,922 |
|
1,415,410 |
|
(426,620 |
) |
(5,591 |
) |
Net (loss) / income attributable to common
shareholders |
(5,282,172 |
) |
276,640 |
|
(9,393,468 |
) |
(1,223,244 |
) |
|
|
|
|
|
|
|
|
|
|
Euroseas Ltd., |
Unaudited Consolidated Condensed Balance
Sheets |
(All amounts expressed in U.S. Dollars – except
number of shares) |
|
|
December 31, 2017 |
|
September 30,2018 |
|
|
|
|
|
|
ASSETS |
(unaudited) |
Current Assets |
|
|
Cash and cash equivalents |
2,858,927 |
|
4,479,115 |
|
Trade accounts receivable, net |
885,495 |
|
1,034,261 |
|
Other receivables |
965,037 |
|
1,863,877 |
|
Inventories |
1,193,018 |
|
1,252,417 |
|
Restricted cash |
1,103,953 |
|
224,776 |
|
Prepaid expenses |
247,039 |
|
177,020 |
|
Vessel held for sale |
4,914,782 |
|
- |
|
Total current assets, continuing operations |
12,168,251 |
|
9,031,466 |
|
Current assets of discontinued operations |
3,914,117 |
|
- |
|
Total current assets |
16,082,368 |
|
9,031,466 |
|
|
|
|
Long-term assets |
|
|
Vessels, net |
52,132,079 |
|
49,624,840 |
|
Restricted cash |
4,334,267 |
|
4,334,267 |
|
Due from spun-off subsidiary |
24,585,518 |
|
- |
|
Fixed and long- term assets of
discontinued operations |
65,197,615 |
|
- |
|
Total assets |
162,331,847 |
|
62,990,573 |
|
|
|
|
Liabilities, Mezzanine equity and shareholders'
equity |
|
|
Current liabilities |
|
|
Long-term bank loans, current portion |
4,203,261 |
|
3,670,720 |
|
Trade accounts payable |
1,522,473 |
|
1,724,464 |
|
Accrued expenses |
1,117,110 |
|
2,095,513 |
|
Deferred revenue |
590,178 |
|
639,594 |
|
Derivative |
229,451 |
|
74,120 |
|
Due to related company |
4,986,836 |
|
5,337,662 |
|
Total current liabilities, continuing
operations |
12,649,309 |
|
13,542,073 |
|
Current liabilities of discontinued operations |
5,885,574 |
|
- |
|
Total current liabilities |
18,534,883 |
|
13,542,073 |
|
|
|
|
Long-term liabilities |
|
|
Long -term bank loans, net of current portion |
29,811,241 |
|
26,521,045 |
|
Derivative |
16,631 |
|
- |
|
Vessel profit participation liability |
1,297,100 |
|
1,704,500 |
|
Total long-term liabilities, continuing
operations |
31,124,972 |
|
28,225,545 |
|
Long- term liabilities of discontinued operations |
30,364,035 |
|
- |
|
Total long term liabilities |
61,489,007 |
|
28,225,545 |
|
Total liabilities |
80,023,890 |
|
41,767,618 |
|
|
|
|
Mezzanine equity: |
|
|
Series B
Preferred shares (par value $0.01, 20,000,000 shares authorized,
37,314 and 19,362 issued and outstanding, respectively) |
35,613,759 |
|
18,513,330 |
|
Shareholders’ equity: |
|
|
Common
stock (par value $0.03, 200,000,000 shares authorized, 11,274,126
and 11,274,126 issued and outstanding) |
338,230 |
|
338,230 |
|
Additional
paid-in capital |
284,236,597 |
|
231,812,905 |
|
Accumulated
deficit |
(237,880,629 |
) |
(229,441,510 |
) |
Total shareholders' equity |
46,694,198 |
|
2,709,625 |
|
Total liabilities, mezzanine equity and shareholders'
equity |
162,331,847 |
|
62,990,573 |
|
|
|
|
|
|
|
Euroseas Ltd. |
Unaudited Consolidated Condensed Statements of
Cash Flows |
(All amounts expressed in U.S.
Dollars) |
|
|
Nine MonthsEndedSeptember 30, |
|
Nine MonthsEnded September 30, |
|
2017 |
|
2018 |
|
|
|
|
Cash flows from
operating activities: |
|
Net loss, continuing
operations |
(7,622,440 |
) |
(125,952 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
Vessel depreciation |
2,877,809 |
|
2,507,238 |
|
Amortization of
deferred charges |
92,259 |
|
106,272 |
|
Share-based
compensation |
98,562 |
|
97,129 |
|
Gain on sale of
vessel |
(516,561 |
) |
(1,340,952 |
) |
Loss on write-down of
vessels held for sale |
4,595,819 |
|
- |
|
Unrealized loss /
(gain) on derivative |
32,159 |
|
(171,962 |
) |
Amortization of debt
discount |
30,494 |
|
319,390 |
|
Changes
in operating assets and liabilities |
2,562,983 |
|
322,687 |
|
Net cash provided by operating activities of
continuing operations |
2,151,084 |
|
1,713,850 |
|
|
|
|
Cash flows from
investing activities: |
|
|
Cash paid for vessel
acquisition and capitalized expenses |
(9,123,181 |
) |
(1,867 |
) |
Release of funds from
minority investment |
4,000,000 |
|
- |
|
Proceeds from sale of
vessels |
5,136,804 |
|
6,255,735 |
|
Net cash provided by investing activities of
continuing operations |
13,623 |
|
6,253,868 |
|
|
|
|
Cash flows from
financing activities: |
|
|
Proceeds from issuance
of common stock, net of commissions paid |
549,495 |
|
- |
|
Investment in
subsidiary spun-off |
(692,577 |
) |
(3,298,356 |
) |
Due from spun-off
subsidiary |
639,313 |
|
- |
|
Loan arrangement fees
paid |
(50,000 |
) |
(119,863 |
) |
Offering expenses
paid |
(341,072 |
) |
(12,488 |
) |
Proceeds from long-
term bank loans |
4,750,000 |
|
4,250,000 |
|
Repayment of long-term
bank loans |
(4,303,915 |
) |
(8,046,000 |
) |
Repayment
of related party loan |
(2,000,000 |
) |
- |
|
Net cash used in financing activities of continuing
operations |
(1,448,756 |
) |
(7,226,707 |
) |
Net increase in cash,
cash equivalents and restricted cash |
715,951 |
|
741,011 |
|
Cash,
cash equivalents and restricted cash at beginning of period |
7,004,684 |
|
8,297,147 |
|
Cash, cash equivalents and restricted cash at end of
period, continuing operations |
7,720,635 |
|
9,038,158 |
|
Cash
breakdown |
|
|
|
|
Cash and cash
equivalents |
3,946,368 |
|
4,479,115 |
|
Restricted cash,
current |
240,000 |
|
224,776 |
|
Restricted cash, long term |
3,534,267 |
|
4,334,267 |
|
Total cash, cash equivalents and restricted cash shown in
the statement of cash flows, continuing operations |
7,720,635 |
|
9,038,158 |
|
Discontinued operations: |
|
|
|
|
Net cash
provided by operating activities of discontinued operations |
906,858 |
|
2,909,315 |
|
Net cash
used in investing activities of discontinued operations |
(9,201,220 |
) |
(18,818,171 |
) |
Net cash
provided by financing activities of discontinued operations |
9,220,153 |
|
16,117,927 |
|
|
|
|
|
|
|
Euroseas Ltd. Continuing
Operations |
Reconciliation of Adjusted EBITDA to Net
loss |
(All amounts expressed in U.S.
Dollars) |
|
|
Three Months EndedSeptember
30, 2017 |
Three Months EndedSeptember
30, 2018 |
Nine Months EndedSeptember 30,
2017 |
Nine Months EndedSeptember 30,
2018 |
Net loss |
(5,474,471 |
) |
(897,776 |
) |
(7,622,440 |
) |
(125,952 |
) |
Interest and other financing costs, net (incl. interest
income) |
362,992 |
|
696,155 |
|
1,033,557 |
|
2,002,583 |
|
Vessel depreciation |
980,027 |
|
798,712 |
|
2,877,809 |
|
2,507,238 |
|
Loss on write-down of vessels held for sale |
4,595,819 |
|
- |
|
4,595,819 |
|
- |
|
Gain on sale of vessel |
- |
|
- |
|
(516,561 |
) |
(1,340,952 |
) |
Unrealized and realized loss / (gain) on derivative, net |
(7,808 |
) |
50,528 |
|
21,245 |
|
45,374 |
|
Adjusted EBITDA |
456,559 |
|
647,619 |
|
389,429 |
|
3,088,291 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Reconciliation:Euroseas Ltd. considers Adjusted EBITDA to
represent net loss before interest, income taxes, depreciation,
gain / loss in derivative, loss on write-down of vessels held for
sale and gain on sale of vessel. Adjusted EBITDA does not represent
and should not be considered as an alternative to net 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 and we believe that these non- GAAP financial measures
assist 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,
gain/ loss in derivative 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. Continuing
Operations |
Reconciliation of Net loss to Adjusted net
loss |
(All amounts expressed in U.S. Dollars – except
share data and number of shares) |
|
|
Three Months EndedSeptember
30, 2017 |
Three Months EndedSeptember
30, 2018 |
Nine Months
EndedSeptember 30, 2017 |
Nine Months EndedSeptember 30,
2018 |
Net loss |
(5,474,471 |
) |
(897,776 |
) |
(7,622,440 |
) |
(125,952 |
) |
Unrealized (gain) / loss on derivative |
(1,478 |
) |
(29,746 |
) |
29,873 |
|
(171,962 |
) |
Realized (gain) / loss on derivative |
(6,330 |
) |
80,274 |
|
(8,628 |
) |
217,336 |
|
Gain on sale of vessel |
- |
|
- |
|
(516,561 |
) |
(1,340,952 |
) |
Loss on write-down of vessels held for sale |
4,595,819 |
|
- |
|
4,595,819 |
|
- |
|
Adjusted net loss |
(886,460 |
) |
(847,248 |
) |
(3,521,937 |
) |
(1,421,530 |
) |
Preferred dividends |
(458,623 |
) |
(240,994 |
) |
(1,344,408 |
) |
(1,091,701 |
) |
Adjusted net loss attributable to
common shareholders |
(1,345,083 |
) |
(1,088,242 |
) |
(4,866,345 |
) |
(2,513,231 |
) |
Adjusted net loss per share, basic and diluted |
(0.12 |
) |
(0.10 |
) |
(0.44 |
) |
(0.23 |
) |
Weighted average number of shares, basic and diluted |
11,093,672 |
|
11,183,899 |
|
11,051,957 |
|
11,150,659 |
|
|
|
|
|
|
|
|
|
|
"Adjusted net loss " and "Adjusted net
loss " Reconciliation:Euroseas Ltd. considers "Adjusted
net loss" to represent net loss before gain / loss on derivative,
loss on write-down of vessels held for sale and gain on sale of
vessel. "Adjusted net loss “ and “Adjusted net loss per share" is
included herein because we believe it assists our management and
investors by increasing the comparability of the Company's
fundamental performance from period to period by excluding the
potentially disparate effects between periods of gain / loss on
derivative and gain on sale of vessel, which items may
significantly affect results of operations between periods.
"Adjusted net loss" and "Adjusted net loss per share" do not
represent and should not be considered as an alternative to net
loss or loss per share, as determined by GAAP. The Company's
definition of "Adjusted net loss" and "Adjusted net loss per share"
may not be the same as that used by other companies in the shipping
or other industries. 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 11 vessels, including 10 Feeder containerships and 1
Intermediate Container carrier. Euroseas 11 containerships have a
cargo capacity of 25,483 teu.
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
BornozisPresidentCapital Link, Inc.230 Park Avenue, Suite 1536New
York, NY 10169Tel. (212) 661-7566E-mail:
nbornozis@capitallink.com |
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