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-month period ended March 31, 2022 and a share
repurchase program and declared a common stock dividend.
First Quarter 2022 Financial
Highlights:
- Total net revenues of $45.4
million. Net income and net income attributable to common
shareholders of $29.9 million or $4.15 and $4.13 earnings per share
basic and diluted, respectively. Adjusted net income attributable
to common shareholders1 for the period was $26.8 million or $3.71
and $3.70 per share basic and diluted, respectively.
- Adjusted EBITDA1 was $31.1
million.
- An average of 16.0 vessels were
owned and operated during the first quarter of 2022 earning an
average time charter equivalent rate of $33,986 per day.
- The Board of Directors has approved
a share repurchase program for up to a total of $20 million of the
Company's common stock. The Board will review the program after a
period of 12 months. Share repurchases will be made from time to
time for cash in open market transactions at prevailing market
prices or in privately negotiated transactions. The timing and
amount of purchases under the program will be determined by
management based upon market conditions and other factors. The
program does not require the Company to purchase any specific
number or amount of shares and may be suspended or reinstated at
any time at the Company's discretion and without notice.
- Declared a quarterly dividend of
$0.50 per share for the first quarter of 2022 payable on or about
June 16, 2022 to shareholders of record on June 9, 2022. This
dividend reinstates the Company’s common stock dividend plan.
Recent developments
- At the beginning of May we agreed
to acquire M/V “Rena P” (ex. Seaspan Melbourne) and M/V “Emmanuel
P” (ex. Seaspan Manila), both intermediate size container vessels
with capacity of 4,250 teu each, built in 2007 and 2005,
respectively. The vessels are being acquired for a combined price
of $37 million and are expected to be delivered to the Company
within May and June 2022, respectively. The Company will also
assume the existing charter arrangements of the vessels as noted in
the fleet profile below. Both acquisitions will be initially
financed with the Company’s own funds.
- In mid-May the Company exercised
its option to proceed with the construction of two additional eco
design fuel efficient containerships. The vessels will have a
carrying capacity of about 2,800 teu each and will be built at
Hyundai Mipo Dockyard Co. in South Korea. The two newbuildings are
scheduled to be delivered during the fourth quarter of 2024. The
total consideration for these two newbuilding contracts is
approximately $86 million and will be financed with a combination
of debt and equity.
Aristides Pittas, Chairman and CEO of
Euroseas commented: “Despite their recent small
correction, the containership feeder charter rates have remained at
levels near historical highs resulting in increased profitability
for Euroseas. In parallel, expectations of continuing strength of
the charter market have allowed us to charter forward the first two
newbuildings of our 9-vessel newbuilding program at rates that will
allow us to fully recover their construction cost over the 3-year
duration of the charters. While the inefficiencies of the
transportation system introduced by the COVID pandemic, that
effectively reduce supply of ships, remain, uncertainties have been
introduced by the on-going Ukraine-Russia conflict and increased
levels of inflation that could affect economic growth and, thus,
demand for shipping. We expect the market to remain
strong in the near and medium term and are monitoring the above
trends which alongside with new regulation on greenhouse gas
emissions and expected increased new vessel deliveries will shape
our markets.
“Within this environment, we continuously look
for investment and other opportunities that will allow us to
maximize returns to our shareholders. Our investment strategy is
focused either on placing newbuilding orders that also enhance the
environmental footprint of our company, or, secondhand vessels with
simultaneous charters that bring their cost basis to below
historical average levels by the end of the charter, thus,
providing us the option for upsized returns.
“Overall, we are determined to remain a
significant participant in the feeder containership market and grow
the company. Our charter coverage provides earnings visibility well
into 2024. Despite that, our stock trades at levels that do not
reflect the mere value of our contracted earnings let alone the net
asset value of the company, thus, representing one of the most
attractive investment opportunities for us. In that spirit, our
Board of Directors has authorized a $20 million stock repurchase
program which management may use at its discretion. Our Board
believes that our increased profitability and earnings visibility
should be used to restore our dividend policy which had run
continuously from 2005 until 2013 and had been paused during the
tough last decade. Our Board decided to use a small part of our
contracted earnings which will not alter our growth philosophy to
reward our shareholders and declared a common stock dividend of
$0.50 per share.
“We are very pleased with these developments and
we look forward to continuing to chart a very profitable future for
our shareholders and investors.”
Tasos Aslidis, Chief Financial Officer
of Euroseas commented: “The results of the first quarter
of 2022 reflect the strong market charter rates our vessels earned
compared to the same period of last year. Our net revenues
increased to $45.4 million in the first quarter of 2022 compared to
$14.3 million during the same period of last year due to the higher
number of vessels we operated in the first quarter of 2022 and the
higher market rates earned by our vessels. During the first quarter
of 2022 we operated 16.0 vessels versus 14.0 vessels during the
same period of last year.
“On a per-vessel-per-day basis, our vessels
earned a 180.1% higher average charter rate in the first quarter of
2022 as compared to the same period of 2021. Again, on a
per-vessel-per-day basis, the sum of vessel operating expenses,
management fees and general and administrative expenses increased
by 5.3% during the first quarter of 2022 as compared to the same
period in 2021 which was attributable mainly to an increase in hull
and machinery insurance premiums, the increased crewing costs
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 for our vessels compared to the same
period of 2021. We believe that we continue to maintain one of the
lowest operating cost structures amongst the public shipping
companies which is one of our competitive advantages.
“Adjusted EBITDA during the first quarter of
2022 was $31.1 million compared to $5.6 million achieved for the
first quarter of 2021.
“Finally, as of March 31, 2022, our outstanding
debt (excluding the unamortized loan fees) is about $112.1 million
versus restricted and unrestricted cash of about $54.1
million.” First
Quarter 2022 Results:For the first quarter of 2022, the
Company reported total net revenues of $45.4 million representing a
217.1% increase over total net revenues of $14.3 million during the
first quarter of 2021. On average, 16.0 vessels were owned and
operated during the first quarter of 2022 earning an average time
charter equivalent rate of $33,986 per day compared to 14.0 vessels
in the same period of 2021 earning on average $12,134 per day. The
Company reported a net income and a net income attributable to
common shareholders for the period of $29.9 million, as compared to
a net income of $3.8 million and a net income attributable to
common shareholders of $3.6 million for the first quarter of
2021.
Vessel operating expenses for the first quarter
of 2022 amounted to $8.4 million as compared to $6.9 million for
the same period of 2021. The increased amount is due to the higher
number of vessels owned and operated in the first quarter of 2022
compared to the corresponding period of 2021, partly offset by 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 first quarter of 2022
amounted to $3.7 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 first
quarter of 2022 increased to $1.2 million from $1.1 million for the
same period of 2021 for the same reason. In the first quarter of
2022 two of our vessels completed their intermediate survey in
water and one of our vessels completed her special survey with
drydock for a total cost of $1.8 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 quarter of 2022 and 2021, we had other operating
expenses of $0.35 million and other operating income of $0.2
million, respectively, relating to settlement of accounts with
charterers.
Interest and other financing costs for the first
quarter of 2022 amounted to $1.0 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 March 31, 2022 the Company recognized a $2.34
million gain on its interest rate swap contracts, comprising a
$0.04 million realized loss and a $2.38 million unrealized gain.
For the three months ended March 31, 2021 the Company recognized a
$0.48 million loss on its interest rate swap contract, comprising a
$0.52 million unrealized loss and a $0.04 million realized
gain.
Adjusted EBITDA1 for the first quarter of 2022
was $31.1 million, compared to $5.6 million achieved for the first
quarter of 2021. Please see below for Adjusted EBITDA
reconciliation to net income.
Basic and diluted earnings per share for the
first quarter of 2022 was $4.15 and $4.13, respectively, calculated
on 7,221,941 basic and 7,254,593 diluted weighted average number of
shares outstanding compared to basic and diluted earnings per share
of $0.53 for the first quarter of 2021, calculated on 6,711,408
basic and 6,749,393 diluted weighted average number of shares
outstanding.
Excluding the effect on the income attributable
to common shareholders for the quarter of the unrealized gain on
derivatives, the amortization of below market time charters
acquired and the depreciation charged due to the increased value of
the vessel acquired with below market time charter, the adjusted
earnings per share for the quarter ended March 31, 2022 would have
been $3.71 and $3.70 per share basic and diluted, respectively,
compared to adjusted earnings of $0.45 per share basic and diluted
for the first quarter of 2021, after excluding unrealized gain on
derivatives and loss on sale of a vessel. Usually, security
analysts do not include the above items in their published
estimates of earnings per share.
Fleet Profile: The Euroseas Ltd. fleet profile
is as follows:
Name |
Type |
Dwt |
TEU |
YearBuilt |
Employment(*) |
TCE Rate ($/day) |
Container Carriers |
|
|
|
|
|
|
MARCOS V |
Intermediate |
72,968 |
6,350 |
2005 |
TC until Dec-24plus 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 Jun-22TC until Feb-23 |
$11,750$14,500 |
EMMANUEL P (ex. SEASPAN MELBOURNE) (*) |
Intermediate |
50,796 |
4,250 |
2005 |
TC until Mar-25 |
$19,000 |
RENA P (ex. SEASPAN MANILLA) (*) |
Intermediate |
50,796 |
4,250 |
2007 |
TC until Apr-24then until Feb-25 |
$20,250 CONTEX(**) basis with $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 April-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 |
$41,000 |
Total Container Carriers |
18 |
737,404 |
58,871 |
|
|
|
Vessels under construction |
Type |
Dwt |
TEU |
To be delivered |
Employment |
TCE Rate ($/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 |
Q1 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 containerships.
It is based on assessments of the current day charter rates of six
selected containership 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 (which are
typically 5-6.25%)
Summary Fleet Data:
|
Three Months,Ended March 31, 2021 |
Three Months,Ended March 31, 2022 |
FLEET DATA |
|
|
Average number of vessels (1) |
14.00 |
16.00 |
Calendar days for fleet (2) |
1,260.0 |
1,440.0 |
Scheduled off-hire days incl. laid-up (3) |
- |
52.4 |
Available days for fleet (4) = (2) - (3) |
1,260.0 |
1,387.6 |
Commercial off-hire days (5) |
- |
5.3 |
Operational off-hire days (6) |
41.2 |
6.3 |
Voyage days for fleet (7) = (4) - (5) - (6) |
1,218.8 |
1,376.0 |
Fleet utilization (8) = (7) / (4) |
96.7% |
99.2% |
Fleet utilization, commercial (9) = ((4) - (5)) / (4) |
100.0% |
99.6% |
Fleet utilization, operational (10) = ((4) - (6)) / (4) |
96.7% |
99.5% |
|
|
|
AVERAGE DAILY RESULTS (usd/day) |
|
|
Time charter equivalent rate (11) |
12,134 |
33,986 |
Vessel operating expenses excl. drydocking expenses (12) |
6,310 |
6,646 |
General and administrative expenses (13) |
604 |
683 |
Total vessel operating expenses (14) |
6,914 |
7,329 |
Drydocking expenses (15) |
65 |
1,242 |
(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 incl. laid up. We use available days to
measure the number of days in a period during which vessels were
available to generate revenues. (5) Commercial off-hire days.
We define commercial off-hire days as days a vessel is idle without
employment.(6) Operational off-hire days. We define operational
off-hire days as days associated with unscheduled repairs or other
off-hire time related to the operation of the vessels.(7) Voyage
days. We define voyage days as the total number of days in a period
during which each vessel in our fleet was in our possession net of
commercial and operational off-hire days. We use voyage days to
measure the number of days in a period during which vessels
actually generate revenues or are sailing for repositioning
purposes.(8) Fleet utilization. We calculate fleet utilization by
dividing the number of our voyage days during a period by the
number of our available days during that period. We use fleet
utilization to measure a company's efficiency in finding suitable
employment for its vessels and minimizing the amount of days that
its vessels are off-hire for reasons such as unscheduled repairs or
days waiting to find employment. (9) Fleet utilization,
commercial. We calculate commercial fleet utilization by dividing
our available days net of commercial off-hire days during a period
by our available days during that period. (10) Fleet
utilization, operational. We calculate operational fleet
utilization by dividing our available days net of operational
off-hire days during a period by our available days during that
period. (11) Time charter equivalent rate, or TCE, is a
measure of the average daily net 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 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, Tuesday, May 24, 2022 at 09:30 a.m. Eastern Time, the
Company's management will host a conference call and webcast to
discuss the results.
Conference Call
details:Participants should dial into the call 10 minutes
before the scheduled time using the following numbers: 1 (877)
553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial
In) or +44 (0) 2071 928592 (Standard International Dial In). Please
quote "Euroseas" to the operator. 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 first quarter
ended March 31, 2022 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 Months Ended March
31,2021 |
Three Months Ended March
31,2022 |
|
|
|
|
|
|
Revenues |
|
|
Time charter revenue |
14,916,567 |
47,119,092 |
Commissions |
(607,249) |
(1,745,554) |
Net revenues |
14,309,318 |
45,373,538 |
|
|
|
Operating expenses / (income) |
|
|
Voyage expenses |
127,409 |
354,024 |
Vessel operating expenses |
6,864,353 |
8,398,893 |
Drydocking expenses |
82,209 |
1,787,926 |
Vessel depreciation |
1,596,543 |
3,721,116 |
Related party management fees |
1,086,405 |
1,172,032 |
Loss on sale of vessel |
9,417 |
- |
General and administrative expenses |
760,977 |
983,072 |
Other operating (income) / expenses |
(216,496) |
350,000 |
Total operating expenses, net |
10,310,817 |
16,767,063 |
|
|
|
Operating income |
3,998,501 |
28,606,475 |
|
|
|
Other income / (expenses) |
|
|
Interest and other financing costs |
(694,307) |
(1,014,431) |
Gain on derivatives, net |
484,910 |
2,342,517 |
Foreign exchange (loss) / gain |
(241) |
1,052 |
Interest income |
1,214 |
681 |
Other (expenses) / income, net |
(208,424) |
1,329,819 |
|
|
|
Net income |
3,790,077 |
29,936,294 |
Dividend Series B Preferred shares |
(138,269) |
- |
Preferred deemed dividend |
(86,356) |
- |
Net income attributable to common
shareholders |
3,565,452 |
29,936,294 |
Earnings per share, basic |
0.53 |
4.15 |
Weighted average number of shares, basic |
6,711,408 |
7,221,941 |
Earnings per share, diluted |
0.53 |
4.13 |
Weighted average number of shares, diluted |
6,749,393 |
7,254,593 |
Euroseas Ltd.Unaudited
Consolidated Condensed Balance Sheets(All amounts
expressed in U.S. Dollars – except number of shares)
|
December 31, 2021 |
March 31, 2022 |
|
|
|
ASSETS |
|
|
Current
Assets: |
|
|
Cash and cash equivalents |
26,530,944 |
49,151,500 |
Trade accounts receivable |
1,274,729 |
1,271,816 |
Other receivables |
1,722,885 |
1,005,894 |
Inventories |
2,274,454 |
1,874,795 |
Restricted cash |
167,285 |
169,240 |
Prepaid expenses |
382,729 |
577,078 |
Due from related company |
- |
132,113 |
Derivatives |
540,753 |
250,571 |
Total current assets |
32,893,779 |
54,433,007 |
Fixed
assets: |
|
|
Vessels, net |
176,111,486 |
173,146,924 |
Long-term
assets: |
|
|
Advances for vessels under construction |
7,615,958 |
7,655,248 |
Restricted cash |
4,800,000 |
4,800,000 |
Derivatives |
- |
1,721,280 |
Total assets |
221,421,223 |
241,756,459 |
|
|
|
LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS' EQUITY |
|
|
Current
liabilities: |
|
|
Long-term bank loans, current portion |
29,034,049 |
34,054,589 |
Trade accounts payable |
2,804,194 |
3,921,997 |
Accrued expenses |
1,702,925 |
1,453,881 |
Deferred revenue |
3,293,986 |
1,892,450 |
Due to related company |
309,970 |
- |
Total current
liabilities |
37,145,124 |
41,322,917 |
|
|
|
Long-term
liabilities: |
|
|
Long-term bank loans, net of current portion |
89,004,951 |
77,182,447 |
Derivatives |
952,666 |
- |
Fair value of below market time charters acquired |
17,461,586 |
16,243,346 |
Total long-term
liabilities |
107,419,203 |
93,425,793 |
Total
liabilities |
144,564,327 |
134,748,710 |
|
|
|
Shareholders’ equity: |
|
|
Common stock (par value $0.03, 200,000,000 shares authorized,
7,294,541, issued and outstanding) |
218,836 |
218,836 |
Additional paid-in capital |
264,609,233 |
264,823,792 |
Accumulated deficit |
(187,971,173) |
(158,034,879) |
Total shareholders’ equity |
76,856,896 |
107,007,749 |
Total liabilities and shareholders’ equity |
221,421,223 |
241,756,459 |
Euroseas Ltd.Unaudited
Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
|
Three MonthsEnded March 31,2021 |
Three MonthsEnded March 31,2022 |
|
|
|
Cash flows from operating
activities: |
|
|
Net income |
3,790,077 |
29,936,294 |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
Vessel depreciation |
1,596,543 |
3,721,116 |
Amortization of deferred
charges |
49,280 |
83,496 |
Share-based compensation |
28,765 |
214,559 |
Loss on sale of vessel |
9,417 |
- |
Unrealized gain on
derivatives |
(527,775) |
(2,383,764) |
Amortization of fair value of
below market time charters acquired |
- |
(1,218,240) |
Changes in operating assets and
liabilities |
1,422,694 |
(130,692) |
Net cash provided by
operating activities |
6,369,001 |
30,222,769 |
|
|
|
Cash flows from investing
activities: |
|
|
Cash paid for vessels under
construction |
- |
(1,732) |
Cash paid for vessels
acquisitions and capitalized expenses |
- |
(281,300) |
Cash paid for vessel
improvements |
(208,457) |
(403,928) |
Net cash used in
investing activities |
(208,457) |
(686,960) |
Cash flows from financing
activities: |
|
|
Redemption of Series B preferred
shares |
(2,000,000) |
- |
Proceeds from issuance of common
stock, net of commissions paid |
743,552 |
- |
Preferred dividends paid |
(91,607) |
- |
Repayment of long-term bank
loans |
(2,185,460) |
(6,885,460) |
Repayment of related party
loan |
(2,500,000) |
- |
Offering expenses paid |
(60,357) |
(27,838) |
Net cash used in
financing activities |
(6,093,872) |
(6,913,298) |
|
|
|
Net increase in cash, cash
equivalents, and restricted cash |
66,672 |
22,622,511 |
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 |
6,404,849 |
54,120,740 |
Cash
breakdown |
|
|
Cash and cash equivalents |
3,629,150 |
49,151,500 |
Restricted cash, current |
341,432 |
169,240 |
Restricted cash, long term |
2,434,267 |
4,800,000 |
Total cash, cash
equivalents, and restricted cash shown in the statement of cash
flows |
6,404,849 |
54,120,740 |
|
|
|
Euroseas
Ltd.Reconciliation of Adjusted EBITDA to
Net Income (All amounts expressed in U.S.
Dollars)
|
Three Months EndedMarch 31,
2021 |
Three Months EndedMarch 31,
2022 |
Net income |
3,790,077 |
29,936,294 |
Interest and other financing costs, net (incl. interest
income) |
693,093 |
1,013,750 |
Vessel
depreciation |
1,596,543 |
3,721,116 |
Loss on
vessel sale |
9,417 |
- |
Gain on
interest rate swap derivatives, net |
(484,910) |
(2,342,517) |
Amortization of below market time charters acquired |
- |
(1,218,240) |
Adjusted EBITDA |
5,604,220 |
31,110,403 |
Adjusted EBITDA
Reconciliation:Euroseas Ltd. considers Adjusted EBITDA to
represent net income before interest, income taxes, depreciation,
gain on interest rate swaps, loss on sale of vessel and
amortization of below market time charters acquired. 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, gain on interest rate swaps, loss on sale of vessel,
depreciation and amortization of below market time charters
acquired. 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 per share amounts)
|
Three Months Ended March 31,
2021 |
Three Months Ended March 31,
2022 |
Net income |
3,790,077 |
|
29,936,294 |
|
Unrealized gain on derivatives |
(527,775 |
) |
(2,383,764 |
) |
Loss on sale of vessel |
9,417 |
|
- |
|
Amortization of below market time charters acquired |
- |
|
(1,218,240 |
) |
Depreciation charged due to increase in vessel value from below
market time charter acquired |
- |
|
494,808 |
|
Adjusted net income |
3,271,719 |
|
26,829,098 |
|
Preferred dividends |
(138,269 |
) |
- |
|
Preferred deemed dividend |
(86,356 |
) |
- |
|
Adjusted net income attributable to common
shareholders |
3,047,094 |
|
26,829,098 |
|
Adjusted earnings per share, basic |
0.45 |
|
3.71 |
|
Weighted average number of shares, basic |
6,711,408 |
|
7,221,941 |
|
Adjusted earnings per share, diluted |
0.45 |
|
3.70 |
|
Weighted average number of shares, diluted |
6,749,393 |
|
7,254,593 |
|
Adjusted net income and Adjusted
earnings per share Reconciliation:Euroseas Ltd. considers
Adjusted net income to represent net income before unrealized gain
on derivatives, loss on sale of vessel, amortization of below
market time charters acquired and depreciation charged due to
increase in vessel value from below market time charter acquired.
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 gain on
derivatives, loss on sale of vessel, amortization of below market
time charters acquired and depreciation charged due to increase in
vessel value from below market time charter acquired, 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 81,071 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 the Company’s 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 Kara
Capital Link, Inc.230 Park Avenue, Suite 1540New York, NY 10169Tel.
(212) 661-7566E-mail: euroseas@capitallink.com |
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.
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