Press Releases
Euroseas Ltd. Reports Results for the First Quarter of 2006
Maroussi, Athens, Greece ? Euroseas Ltd., (OTCBB: ESEAF.OB) an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for dry bulk and containerized cargoes, announced today its results for the First Quarter 2006.
First Quarter 2006 Results:
For the first quarter 2006, the company reported total net revenues of $9,809,021 and net income of $3,418,882. EBITDA for the first quarter 2006 was $5,434,305. Please see below for EBITDA reconciliation to net income. In the first quarter 2005, net revenues were $12,021,135, net income was $8,487,438 and EBITDA was $9,400,237. On average, eight vessels were operated during the first quarter of 2006 compared to seven vessels earning in the first quarter 2005.
Earnings per share for the first quarter of 2006 were $0.093, calculated on 36,829,122 weighted average number of shares outstanding during this quarter, compared to earnings per share of $0.285 for the first quarter of 2005 calculated on 29,754,166 weighted average number of shares outstanding during that quarter
Recent Developments:
The company?s common stock currently trades on the Over The Counter Bulletin Board (OTCBB), under the symbol ESEAF.OB. The company completed a private placement to a number of institutional and accredited investors on August 25, 2005 and raised approximately $21 million in gross proceeds. The company completed its merger with Cove Apparel Inc. on March 27, 2006 (the "Merger"). Pursuant to the Merger, Cove Apparel?s securities were converted into securities of Euroseas, were de-listed and no longer trade. Euroseas has also applied to have its common stock listed on the NASDAQ National Market, and expects to commence trading there as soon as it qualifies for such listing.
On May 12, 2006, the company announced the declaration of its third consecutive dividend, a dividend of $0.06 per common share payable on June 16, 2006 to all shareholders of record as of June 02, 2006. This follows the company's dividend declarations of $0.06 per common share on February 7, 2006 and of $0.07 per share on November 2, 2005.
Within the first quarter of 2006 Euroseas continued its fleet development strategy by entering into agreements to sell two of its older Handysize bulk carriers and acquiring its first Handysize multipurpose vessel.
Specifically, on March 20, 2006, Euroseas entered into an agreement to sell M/V "John P" a Handysize bulk carrier of 26,354 dwt built in 1981 for $4.95 million, which is to be delivered to the buyers in late June/early July 2006. Additionally, on April 11, 2006, Euroseas signed a memorandum of agreement to sell M/V "Pantelis P", a Handysize bulk carrier of 26,354 dwt built in 1981, which is to be delivered to the buyers between May 15 and June 30, 2006 at Euroseas' option. Furthermore, on April 27, 2006, Euroseas acquired and took delivery of the M/V "Tasman Trader," a Handysize multipurpose dry cargo vessel of 22,568 dwt and 950 twenty-foot equivalent units built in 1990 capable of transporting bulk commodities and/or containers. The M/V ?Tasman Trader? was acquired with a period charter attached until December 2008 at a rate of $8,850 per day. Thereafter, Euroseas has arranged an extension with the same charterer for a further 24 months, ending December 2010, at $9,500 per day. After that 24 month period, Euroseas has arranged for a further extension for 15 months, ending March 2012, at $9,000 per day. Earlier, in November 2005, Euroseas had acquired the containership M/V "Artemis", built in 1987 with a 2,098 teu and 29,693 dwt capacity, which is employed under a time charter terminating in December 2008 at the rate of $19,000 per day.
Once all vessel deliveries are completed, Euroseas will ultimately have a fleet of seven vessels, including one Panamax drybulk carrier, two Handysize drybulk carriers, three Handysize containerships and a Handysize multipurpose dry cargo vessel. Euroseas three drybulk carrier vessels have a total cargo capacity of 138,196 deadweight tons (dwt), its three containerships have a cargo capacity of 66,100 dwt and 4,636 teu and its one multipurpose vessel has a cargo capacity of 22,568 dwt and 950 teu.
Aristidis Pittas, Chairman and CEO of Euroseas commented: "In the first quarter of 2006 we continued our fleet development consistent with our strategy to focus on age and size segments which we believe can maximize our return on equity. The addition of our first multipurpose vessel to our fleet, the M/V "Tasman Trader" enables us to increase the flexibility and versatility of our fleet and allows us to enter into this niche market that is a hybrid between pure bulk and container vessels and where other opportunities may arise in the future. Furthermore, consistent with our fleet deployment strategy of seeking profitable long-term employment, the M/V "Tasman Trader" came with a time charter that expires in 2012, thereby enabling us to generate stable and predictable cash flows securing our earnings and shareholder return.
Also, we believe that the proceeds from the sale of the M/V "Pantelis P", the sale of M/V "John P" and the cash available from the private placement we completed in August 2005, coupled with the use of standard leverage, place us in a strong position to continue taking advantage of market opportunities, as these may occur in 2006."
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the first quarter of 2006 reflect lower revenues compared to the first quarter 2005 consistent with market developments. In addition, certain of our time charters (like the one of M/V "Kuo Hsiung") had declining charter rates. Higher expenses during the first quarter of 2006 reflect increased vessel operating costs, due partly to initial expenses for the newly acquired M/V "Artemis"; also, we now have general and administrative expenses - that we did not have in the first quarter of 2005 - which reflect our status and requirements as a public company, higher depreciation and amortization, as well as increased interest and finance costs.
As of today, 90% of our ship capacity days in 2006 have been fixed (accounting for the fixed spot employment in the first and second quarters of the year); in 2007, 58% of our capacity is under time charter contracts or protected from market fluctuations. We believe that our contract coverage gives us a solid revenue base for 2006 and 2007.
Finally, consistent with our goal to pay regular dividends to our shareholders we declared a $0.06 dividend similar to the dividend for the fourth quarter of 2005. Since our private placement in August 2005, we have declared total dividends of $ 0.19 per share."
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