Press Releases
Euroseas Ltd. Reports Results for the Quarter Ended March 31, 2008
Maroussi, Athens, Greece - May 28, 2008 - 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 month period ended March 31, 2008.
First Quarter 2008 Highlights:
- Net income of $15.2 million or $0.50 basic and diluted earnings per share calculated on 30,321,553 basic weighted average number of shares outstanding and 30,379,994 diluted weighted average number of shares outstanding on total net revenues of $32.8 million. Ignoring the effect on the earnings for the quarter from the amortization of the fair value of time charter contracts acquired the earnings per share for the quarter ended March 31, 2008 would have been $0.43 per share basic and diluted.
- Adjusted EBITDA was $20.9 million. Please refer to a subsequent section of the Press Release for a reconciliation of adjusted EBITDA to net income and cash flows provided by operating activities.
- An average of 15 vessels were operated during the first quarter 2008 earning an average time charter equivalent rate of $25,723 per day.
- A quarterly dividend of $0.31 per share was declared for the first quarter 2008 payable on June 18, 2008 to shareholders of record as of June 6, 2008
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the first quarter of 2008 reflect significantly higher revenues compared to the same period in 2007 due to the higher number of vessels in our fleet and the higher average time charter equivalent rate our vessels have achieved. Specifically during the first quarter of 2008, our fleet averaged 15 vessels vs. 9.01 in the same period of 2007 and earned on average $25,723 per vessel per day compared to $18,333 per vessel per day during the same period of last year.
As of today, 92% of our ship capacity days in 2008 have been fixed under time charter contracts or protected from market fluctuations. We believe that our contract coverage gives us a solid revenue base for 2008 and beyond, more predictable cash flows and sufficient downside protection, while still allowing us to participate in the potential upside of the spot market."
First quarter 2008 Results:
For the first quarter of 2008, the Company reported total net revenues of $32.8 million and net income of $15.2 million representing a 142.3% and 60.1% increase, respectively, over total net revenues of $13.5 million and net income of $9.5 million during the first quarter of 2007. First quarter 2007 results included a capital gain of $3.4 million from the sale of a vessel; excluding the capital gain, net income for the first quarter of 2007 was $6.1 million, and the growth of net income in the first quarter of 2008 over the same period in 2007 was 150.2%.
On average, 15 vessels were operated during the first quarter 2008 earning an average time charter equivalent rate of $25,723 per day compared to 9.01 vessels in the same period 2007 earning on average $18,333 per day.
Adjusted EBITDA for the first quarter of 2008 was $20.9 million, a 54.0% increase over $13.6 million during the first quarter of 2007. Please see below for Adjusted EBITDA reconciliation to net income and cash flow provided by operating activities.
Basic and diluted earnings per share for the first quarter of 2008 were $0.50, calculated on 30,321,553 basic weighted average number of shares outstanding and 30,379,994 diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $0.37 for the first quarter of 2007, calculated on 16,453,483 basic and diluted weighted average number of shares outstanding, excluding capital gains contributions of $0.21 per share from the sale of a vessel in the first quarter of 2007. The Company has recently declared a quarterly dividend of $0.31 per share, which represents its eleventh consecutive quarterly dividend and a 29.2% increase over last year's first quarter dividend.
Ignoring the effect on the earnings for the quarter from the amortization of the fair value of time charter contracts acquired the earnings per share for the quarter ended March 31, 2008 would have been $0.43 per share basic and diluted, and, for the quarter ended March 31, 2007 would have been $0.41 per share basic and diluted excluding contributions of capital gains. Usually, security analysts do not include amortization of the fair value of period charter contracts in their published estimates of earnings per share.
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
(*) "IRINI" is employed in the Baumarine spot pool that is managed by Klaveness, a major global charterer in the dry bulk area, and also participates in "short" funds (contracts to carry cargo at agreed rates), reducing its exposure to the spot market.
Summary Fleet Data:
(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of our 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. 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) 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 off-hire days associated with scheduled repairs, drydockings or special or intermediate surveys. The shipping industry uses available days to measure the number of days in a period during which vessels were available to generate revenues.
(4) 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 off-hire days associated with scheduled and unscheduled repairs, drydockings or special or intermediate surveys or days waiting to find employment or other offhire. The shipping industry uses voyage days to measure the number of days in a period during which vessels actually generate revenues.
(5) 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. The shipping industry uses 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.
(6) 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 consistent with industry standards and is determined by dividing revenue generated from voyage charters net of voyage expenses by available 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, as well as commissions. 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.
(7) 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.
(8) Daily general and administrative expense is calculated by dividing general and administrative expense by fleet calendar days for the relevant time period.
(9) 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 and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.
Conference Call and Webcast:
Tomorrow, Thursday, May 29, 2008 at 10:00 a.m. EDT, 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: 1 866 819 7111 (from the US), 0800 953 0329 (from the UK) or +44 (0)1452 542 301 (international standard dial in). Please quote "Euroseas".
In case of any problems with the above numbers, please dial 1 866 223 0615 (from the US), 0800 694 1503 (from the UK) or +44 (0)1452 586 513 (international standard dial in). Quote "Euroseas".
A recording of the conference call will be available until June 5, 2008 by dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 (0)1452 550 000 (international standard dial in). Access Code: 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.
A slide presentation on the First Quarter 2008 results in PDF format will also be available 30 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.
EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings before interest, income taxes, depreciation, amortization and amortization of deferred revenues from above or below market time charters acquired. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which we assess our financial performance and liquidity position and because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. The Company's definition of Adjusted EBITDA 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 136 years. Euroseas trades on the NASDAQ Global Select Market under the ticker ESEA.
Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2000 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 16 vessels, including 3 Panamax drybulk carriers, 2 Handysize drybulk carriers, 3 Intermediate container ship, 5 Handysize container ships, 2 Feeder container ships and a multipurpose dry cargo vessel. Euroseas` 5 drybulk carriers have a total cargo capacity of 277,316 dwt, its 10 container ships have a cargo capacity of 17,877 teu and its 1 multipurpose vessel has a cargo capacity of 22,568 dwt or 950 teu.
Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels and container ships, 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.
Contact:
Visit our website www.euroseas.gr
Company Contact
Tasos Aslidis
Chief Financial Officer
Euroseas Ltd.
11 Canterbury Lane,
Watchung, NJ 07069
Tel. (908) 301-9091
E-mail: aha@euroseas.gr
Investor Relations / Financial Media
Nicolas Bornozis
President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: nbornozis@capitallink.com