Euroseas Ltd. Reports Results for the Nine-Month Period and Quarter Ended September 30, 2022
Euroseas Ltd. (NASDAQ: ESEA) announced strong financial results for Q3 and the first nine months of 2022. Q3 revenues reached $46.0 million, a 99.5% increase compared to the previous year, with net income at $25.2 million or $3.50 per share. For nine months, revenues totaled $139.8 million, up 151.3%, with net income at $85.9 million. The average daily charter rate increased by 58.6% year-over-year. A quarterly dividend of $0.50 per share was declared. The company has also initiated a $20 million share repurchase plan, aiming to enhance shareholder value.
- Q3 net revenues increased to $46.0 million, a 99.5% rise from Q3 2021.
- Net income reached $25.2 million or $3.50 per share in Q3 2022.
- Nine months revenues rose to $139.8 million, representing a 151.3% increase.
- Average daily charter rates increased by 58.6% year-over-year in Q3 2022.
- Declared a quarterly dividend of $0.50 per share.
- Initiated a $20 million share repurchase plan.
- Average charter rates have started declining, dropping nearly 80% since September 2022.
- Operating expenses increased primarily due to higher crew rotation costs and rising insurance premiums.
- Outstanding debt as of September 30, 2022, was $115.7 million with $40.1 million scheduled for repayment within 12 months.
ATHENS, Greece, Nov. 14, 2022 (GLOBE NEWSWIRE) -- 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 periods ended September 30, 2022.
Third Quarter 2022 Financial Highlights:
- Total net revenues of
$46.0 million . Net income and net income attributable to common shareholders of$25.2 million or$3.50 earnings per share basic and diluted. Adjusted net income attributable to common shareholders1 for the period was$20.9 million or$2.90 per share basic and diluted. - Adjusted EBITDA1 was
$26.2 million . - An average of 18.0 vessels were owned and operated during the third quarter of 2022 earning an average time charter equivalent rate of
$30,893 per day. - Declared a quarterly dividend of
$0.50 per share for the third quarter of 2022 payable on or about December 16, 2022 to shareholders of record on December 9, 2022 as part of the Company’s common stock dividend plan. - As of November 14, 2022 we had repurchased 138,936 of our common stock in the open market for a total of about
$3.0 million , under our share repurchase plan of up to$20 million announced in May 2022.
Nine Months 2022 Financial Highlights:
- Total net revenues of
$139.8 million . Net income and net income attributable to common shareholders of$85.9 million or$11.91 and$11.86 earnings per share basic and diluted, respectively. Adjusted net income attributable to common shareholders1 for the period was$77.3 million or$10.71 and$10.67 per share basic and diluted, respectively. - Adjusted EBITDA1 was
$91.5 million . - An average of 16.8 vessels were owned and operated during the first nine months of 2022 earning an average time charter equivalent rate of
$32,814 per day.
Aristides Pittas, Chairman and CEO of Euroseas commented:
“Containership rates reached all-time highs for most vessel segments during March of 2022, stayed near those levels through August, but since the beginning of September 2022 have started declining, dropping almost
“Looking forward, one of the challenges in the market is the absorption of the containership orderbook standing now at nearly
“In any event, the explosion of charter rates from late 2020 to August 2022 has allowed us to charter all our vessels at very profitable rates for periods extending up to three or more years creating a backlog of contracted revenues in excess of
“Our increased earnings and liquidity have allowed us to reward our shareholders by establishing a quarterly dividend of
Tasos Aslidis, Chief Financial Officer of Euroseas commented:
“The results of the third quarter of 2022 reflect the significantly higher time charter rates our vessels earned in the third quarter of 2022, compared to the corresponding period of 2021. The Company operated an average of 18.0 vessels, versus 14.0 vessels during the same period last year. Our net revenues increased to
Adjusted EBITDA during the third quarter of 2022 was
As of September 30, 2022, our outstanding debt (excluding the unamortized loan fees) was
Third Quarter 2022 Results:
For the third quarter of 2022, the Company reported total net revenues of
Vessel operating expenses for the third quarter of 2022 amounted to
Depreciation expense for the third quarter of 2022 amounted to
Related party management fees for the three months ended September 30, 2022 were
In the third quarter of 2022 two of our vessels completed their special survey with drydock. The above mentioned drydocking expenses amounted to
Interest and other financing costs for the third quarter of 2022 amounted to
For the three months ended September 30, 2022 the Company recognized a
Adjusted EBITDA1 for the third quarter of 2022 increased to
Basic and diluted earnings per share attributable to common shareholders for the third quarter of 2022 were
Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized gain on derivatives, the amortization of fair value of below market time charters acquired and the vessel depreciation on the portion of the consideration of vessels acquired with attached time charters allocated to below market time charters, the adjusted earnings attributable to common shareholders for the quarter ended September 30, 2022 would have been
Nine Months 2022 Results:
For the first nine months of 2022, the Company reported total net revenues of
Vessel operating expenses for the nine-month period of 2022 amounted to
Depreciation expense for the first nine months of 2022 was
Related party management fees for the nine months ended September 30, 2022 were
General and administrative expenses amounted to
Drydocking expenses amounted to
Finally, during the nine month period of 2022 and 2021, we had other operating expenses of
Interest and other financing costs for the first nine months of 2022 amounted to
Adjusted EBITDA1 for the first nine months of 2022 was
Basic and diluted earnings per share attributable to common shareholders for the first nine months of 2022 were
Excluding the effect on the income attributable to common shareholders for the first nine months of 2022 of the unrealized gain on derivatives, the amortization of fair value of below market time charters acquired and the vessel depreciation on the portion of the consideration of vessels acquired with attached time charters allocated to below market time charters, the adjusted earnings per share attributable to common shareholders for the nine-month period ended September 30, 2022 would have been
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows
| Name | Type | Dwt | TEU | Year Built | Employment(*) | TCE Rate ($/day) |
Container Carriers | ||||||
| MARCOS V(*) | Intermediate | 72,968 | 6,350 | 2005 | TC until Dec-24 plus 12 months option | Option |
| AKINADA BRIDGE | Intermediate | 71,366 | 5,610 | 2001 | Undergoing dry dock/repairs(**) | - |
| SYNERGY BUSAN(*) | Intermediate | 50,726 | 4,253 | 2009 | TC until Aug-24 | |
| SYNERGY ANTWERP(+) | Intermediate | 50,726 | 4,253 | 2008 | TC until Dec-23 | |
| SYNERGY OAKLAND(*) | Intermediate | 50,787 | 4,253 | 2009 | TC until May-26 | |
| SYNERGY KEELUNG(+) | Intermediate | 50,969 | 4,253 | 2009 | TC until Feb-23 | |
| EMMANUEL P(*) | Intermediate | 50,796 | 4,250 | 2005 | TC until Mar-25 | |
| RENA P(*) | Intermediate | 50,796 | 4,250 | 2007 | TC until Apr-24 then until Feb-25 | then CONTEX(***) basis ( |
| EM KEA(*) | Feeder | 42,165 | 3,100 | 2007 | TC until May-23 | |
| EM ASTORIA (*) | Feeder | 35,600 | 2,788 | 2004 | TC until Feb-23 then until Feb-24 then until Feb-25 | |
| EVRIDIKI G(*) | Feeder | 34,677 | 2,556 | 2001 | TC until Feb-25 | |
| EM CORFU(*) | Feeder | 34,654 | 2,556 | 2001 | TC until Feb-25 | |
| DIAMANTIS P(*) | Feeder | 30,360 | 2,008 | 1998 | TC until Oct-24 | |
| EM SPETSES(*) | Feeder | 23,224 | 1,740 | 2007 | TC until Aug-24 | |
| JONATHAN P(*) | Feeder | 23,357 | 1,740 | 2006 | TC until Sep-24 | |
| EM HYDRA(*) | Feeder | 23,351 | 1,740 | 2005 | TC until Apr-23 | |
| JOANNA(*) | Feeder | 22,301 | 1,732 | 1999 | TC until Dec-22 | |
| AEGEAN EXPRESS(*) | Feeder | 18,581 | 1,439 | 1997 | TC until Apr-25 | |
Total Container Carriers on the Water | 18 | 737,404 | 58,871 |
| Vessels under construction | Type | Dwt | TEU | To be delivered | Employment | TCE Rate (4/day) | |
| GREGOS (*) (H4201) | Feeder | 37,237 | 2,800 | Q1 2023 | TC until Mar-26 | ||
| TERATAKI (*) (H4202) | Feeder | 37,237 | 2,800 | Q2 2023 | TC until Jun-26 | ||
| 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 | Q2 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 | ||||
Notes:
(*) 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 (+).
(**) Repairs refer to tailshaft system damage found while the ship was in drydock. Hull & Machinery and Loss of Hire underwriters have been notified and the managers are presently working to evaluate necessary repair options.
(***) 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 container ships. It is based on assessments of the current day charter rates of six selected container ship 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
Summary Fleet Data:
| Three Months, Ended September 30, 2021 | Three Months, Ended September 30, 2022 | Nine Months, Ended September 30, 2021 | Nine Months, Ended September 30, 2022 | |||||
| FLEET DATA | ||||||||
| Average number of vessels (1) | 14.0 | 18.0 | 14.0 | 16.8 | ||||
| Calendar days for fleet (2) | 1,288.0 | 1,656.0 | 3,822.0 | 4,594.0 | ||||
| Scheduled off-hire days incl. laid-up (3) | 57.3 | 114.4 | 57.3 | 173.0 | ||||
| Available days for fleet (4) = (2) - (3) | 1,230.7 | 1,541.6 | 3,764.7 | 4,421.0 | ||||
| Commercial off-hire days (5) | - | - | - | 5.3 | ||||
| Operational off-hire days (6) | 14.4 | 7.4 | 56.7 | 18.4 | ||||
| Voyage days for fleet (7) = (4) - (5) - (6) | 1,216.3 | 1,534.2 | 3,708.0 | 4,397.3 | ||||
| Fleet utilization (8) = (7) / (4) | 98.8 | % | 99.5 | % | 98.5 | % | 99.5 | % |
| Fleet utilization, commercial (9) = ((4) - (5)) / (4) | 100.0 | % | 100.0 | % | 100.0 | % | 99.9 | % |
| Fleet utilization, operational (10) = ((4) - (6)) / (4) | 98.8 | % | 99.5 | % | 98.5 | % | 99.6 | % |
| AVERAGE DAILY RESULTS (usd/day) | ||||||||
| Time charter equivalent rate (11) | 19,482 | 30,893 | 15,478 | 32,814 | ||||
| Vessel operating expenses excl. drydocking expenses (12) | 6,741 | 6,601 | 6,445 | 6,771 | ||||
| General and administrative expenses (13) | 580 | 579 | 588 | 635 | ||||
| Total vessel operating expenses (14) | 7,321 | 7,180 | 7,033 | 7,406 | ||||
| Drydocking expenses (15) | 2,073 | 2,223 | 758 | 1,346 | ||||
(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 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 rate, or TCE, is a measure of the average daily 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, which is a non-GAAP measure, provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and because we believe that it provides useful information to investors regarding our financial performance. 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) We calculate daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and related party management fees by dividing vessel operating expenses and related party 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 us 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. We compute TVOE as 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) Daily drydocking expenses is calculated by us by dividing drydocking expenses by the fleet calendar days for the relevant period. Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method. 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:
Today, Monday, November 14, 2022 at 9:30 a.m. Eastern Standard 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: 877 405 1226 (US Toll-Free Dial In) or +1 201 689 7823 (US and Standard International Dial In). Please quote “Euroseas” to the operator and/or conference ID 13734397. Click here for additional participant International Toll-Free access numbers.
Alternatively, participants can register for the call using the call me option for a faster connection to join the conference call. You can enter your phone number and let the system call you right away. Click here for the call me option.
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 Third Quarter 2022 results in PDF format will also be available 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 September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||
| 2021 | 2022 | 2021 | 2022 | ||||||
| Revenues | |||||||||
| Time charter revenue | 24,006,648 | 47,736,642 | 57,980,391 | 145,185,170 | |||||
| Commissions | (966,598 | ) | (1,781,458 | ) | (2,340,579 | ) | (5,376,839 | ) | |
Net revenues | 23,040,050 | 45,955,184 | 55,639,812 | 139,808,331 | |||||
| Operating expenses / (income) | |||||||||
| Voyage expenses | 310,724 | 340,844 | 588,706 | 892,130 | |||||
| Vessel operating expenses | 7,629,855 | 9,652,894 | 21,431,974 | 27,483,359 | |||||
| Drydocking expenses | 2,669,597 | 3,681,923 | 2,898,981 | 6,184,667 | |||||
| Vessel depreciation | 1,596,543 | 5,347,010 | 4,789,629 | 13,174,664 | |||||
| Related party management fees | 1,052,884 | 1,278,851 | 3,201,105 | 3,624,795 | |||||
| Net loss on sale of vessel | - | - | 9,417 | - | |||||
| General and administrative expenses | 744,624 | 958,078 | 2,247,097 | 2,918,559 | |||||
| Other operating (income) / expenses | - | - | (1,298,318 | ) | 350,000 | ||||
| Total operating expenses, net | 14,004,227 | 21,259,600 | 33,868,591 | 54,628,174 | |||||
| Operating income | 9,035,823 | 24,695,584 | 21,771,221 | 85,180,157 | |||||
| Other (expenses) / income | |||||||||
| Interest and other financing costs | (621,410 | ) | (1,329,511 | ) | (2,003,077 | ) | (3,476,113 | ) | |
| Gain on derivatives, net | 33,163 | 1,809,263 | 421,308 | 4,119,167 | |||||
| Foreign exchange gain | 15,425 | 30,107 | 7,921 | 67,421 | |||||
| Interest income | 1,015 | 17,717 | 2,969 | 18,664 | |||||
| Other (expenses) / income, net | (571,807 | ) | 527,576 | (1,570,879 | ) | 729,139 | |||
Net income | 8,464,016 | 25,223,160 | 20,200,342 | 85,909,296 | |||||
| Dividend Series B Preferred shares | - | - | (255,324 | ) | - | ||||
| Preferred deemed dividend | - | - | (345,423 | ) | - | ||||
| Net income attributable to common shareholders | 8,464,016 | 25,223,160 | 19,599,595 | 85,909,296 | |||||
| Weighted average number of shares outstanding, basic | 7,198,991 | 7,199,448 | 6,898,195 | 7,215,189 | |||||
| Earnings per share, basic | 1.18 | 3.50 | 2.84 | 11.91 | |||||
| Weighted average number of shares outstanding, diluted | 7,241,740 | 7,211,204 | 6,942,614 | 7,240,848 | |||||
| Earnings per share, diluted | 1.17 | 3.50 | 2.82 | 11.86 | |||||
Euroseas Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)
| December 31, 2021 | September 30, 2022 | ||
| ASSETS | |||
| Current Assets: | |||
| Cash and cash equivalents | 26,530,944 | 27,395,261 | |
| Trade accounts receivable, net | 1,274,729 | 584,298 | |
| Other receivables | 1,722,885 | 745,281 | |
| Inventories | 2,274,454 | 2,402,628 | |
| Restricted cash | 167,285 | 184,681 | |
| Prepaid expenses | 382,729 | 636,054 | |
| Derivatives | 540,753 | 1,982,183 | |
| Total current assets | 32,893,779 | 33,930,386 | |
| Fixed assets: | |||
| Vessels, net | 176,111,486 | 230,078,227 | |
| Long-term assets: | |||
| Advances for vessels under construction | 7,615,958 | 50,499,455 | |
| Derivatives | - | 1,788,395 | |
| Restricted cash | 4,800,000 | 5,400,000 | |
| Total assets | 221,421,223 | 321,696,463 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Long-term bank loans, current portion | 29,034,049 | 39,773,409 | |
| Trade accounts payable | 2,804,194 | 4,565,517 | |
| Accrued expenses | 1,702,925 | 3,497,063 | |
| Accrued dividends | - | 43,150 | |
| Deferred revenue | 3,293,986 | 6,463,028 | |
| Due to related company | 309,970 | 201,485 | |
| Total current liabilities | 37,145,124 | 54,543,652 | |
| Long-term liabilities: | |||
| Long-term bank loans, net of current portion | 89,004,951 | 75,091,196 | |
| Derivatives | 952,666 | - | |
| Fair value of below market time charters acquired | 17,461,586 | 38,815,342 | |
| Total long-term liabilities | 107,419,203 | 113,906,538 | |
| Total liabilities | 144,564,327 | 168,450,190 | |
| Shareholders’ equity: | |||
| Common stock (par value | 218,836 | 214,866 | |
| Additional paid-in capital | 264,609,233 | 262,356,737 | |
| Accumulated deficit | (187,971,173) | (109,325,330) | |
| Total shareholders’ equity | 76,856,896 | 153,246,273 | |
| Total liabilities and shareholders’ equity | 221,421,223 | 321,696,463 | |
Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
| Nine Months Ended September 30, | Nine Months Ended September 30, | |||
| 2021 | 2022 | |||
| Cash flows from operating activities: | ||||
| Net income | 20,200,342 | 85,909,296 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Vessel depreciation | 4,789,629 | 13,174,664 | ||
| Amortization of deferred charges | 150,008 | 250,565 | ||
| Share-based compensation | 73,676 | 650,829 | ||
| Net loss on sale of vessel | 9,417 | - | ||
| Amortization of fair value of below market time charters acquired | - | (6,945,691 | ) | |
| Unrealized gain on derivatives | (552,632 | ) | (4,182,491 | ) |
| Changes in operating assets and liabilities | 2,052,628 | 6,490,535 | ||
| Net cash provided by operating activities | 26,723,068 | 95,347,707 | ||
| Cash flows from investing activities: | ||||
| Cash paid for vessels under construction | (7,615,294 | ) | (42,608,461 | ) |
| Cash paid for vessel acquisitions and capitalized expenses | (2,550,714 | ) | (36,504,636 | ) |
| Cash paid for vessel improvements | (621,704 | ) | (1,172,500 | ) |
| Net cash used in investing activities | (10,787,712 | ) | (80,285,597 | ) |
| Cash flows from financing activities: | ||||
| Proceeds from issuance of common stock, net of commissions paid | 743,553 | - | ||
| Redemption of Series B preferred shares | (2,000,000 | ) | - | |
| Cash paid for share repurchase | (2,907,090 | ) | ||
| Preferred dividends paid | (424,000 | ) | - | |
| Dividends paid | - | (7,220,509 | ) | |
| Loan arrangement fees paid | (225,000 | ) | (115,500 | ) |
| Offering expenses paid | (69,900 | ) | (27,838 | ) |
| Proceeds from long- term bank loans | 10,000,000 | 19,250,000 | ||
| Repayment of long-term bank loans | (17,556,380 | ) | (22,559,460 | ) |
| Repayment of related party loan | (2,500,000 | ) | - | |
| Net cash used in financing activities | (12,031,727 | ) | (13,580,397 | ) |
| Net increase in cash, cash equivalents and restricted cash | 3,903,629 | 1,481,713 | ||
| 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 | 10,241,806 | 32,979,942 | ||
| Cash breakdown | ||||
| Cash and cash equivalents | 5,880,947 | 27,395,261 | ||
| Restricted cash, current | 160,859 | 184,681 | ||
| Restricted cash, long term | 4,200,000 | 5,400,000 | ||
| Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 10,241,806 | 32,979,942 | ||
Euroseas Ltd.
Reconciliation of Adjusted EBITDA to Net income
(All amounts expressed in U.S. Dollars)
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2022 | |||||
| Net income | 8,464,016 | 25,223,160 | 20,200,342 | 85,909,296 | ||||
| Interest and other financing costs, net (incl. interest income) | 620,395 | 1,311,794 | 2,000,108 | 3,457,449 | ||||
| Vessel depreciation | 1,596,543 | 5,347,010 | 4,789,629 | 13,174,664 | ||||
| Net loss on sale of vessel | - | - | 9,417 | - | ||||
| Amortization of fair value of below market time charters acquired | - | (3,881,904 | ) | - | (6,945,691 | ) | ||
| Gain on interest rate swap derivatives, net | (33,163 | ) | (1,809,263 | ) | (421,308 | ) | (4,119,167 | ) |
Adjusted EBITDA | 10,647,791 | 26,190,797 | 26,578,188 | 91,476,551 | ||||
Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net income before interest and other financing costs, income taxes, depreciation, gain on interest rate swaps, net loss on sale of vessel and amortization of fair value 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 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, interest and other financing costs, net loss on sale of vessel, amortization of fair value of below market time charters acquired gain on interest rate swaps 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.
Reconciliation of Adjusted net income to Net income
(All amounts expressed in U.S. Dollars – except share data and number of shares)
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2022 | |||||
| Net income | 8,464,016 | 25,223,160 | 20,200,342 | 85,909,296 | ||||
| Unrealized gain on derivatives | (78,985 | ) | (1,771,835 | ) | (552,632 | ) | (4,182,491 | ) |
| Net loss on sale of vessel | - | - | 9,417 | - | ||||
| Amortization of fair value of below market time charters acquired | - | (3,881,904 | ) | - | (6,945,691 | ) | ||
| Vessel depreciation on portion of the consideration of vessels acquired with attached time charters allocated to below market time charters | - | 1,307,189 | - | 2,511,790 | ||||
| Adjusted net income | 8,385,031 | 20,876,610 | 19,657,127 | 77,292,904 | ||||
| Preferred dividends | - | - | (255,324 | ) | - | |||
| Preferred deemed dividend | - | - | (345,423 | ) | - | |||
| Adjusted net income attributable to common shareholders | 8,385,031 | 20,876,610 | 19,056,380 | 77,292,904 | ||||
| Adjusted earnings per share, basic | 1.16 | 2.90 | 2.76 | 10.71 | ||||
| Weighted average number of shares, basic | 7,198,991 | 7,199,448 | 6,898,195 | 7,215,189 | ||||
| Adjusted earnings per share, diluted | 1.16 | 2.90 | 2.74 | 10.67 | ||||
| Weighted average number of shares, diluted | 7,241,740 | 7,211,204 | 6,942,614 | 7,240,848 | ||||
Adjusted net income and Adjusted earnings per share Reconciliation:
Euroseas Ltd. considers Adjusted net income to represent net income before unrealized gain on derivatives, net loss on sale of vessel, amortization of fair value of below market time charters acquired and vessel depreciation on portion of the consideration of vessels acquired with attached time charters allocated to below market time charters. Adjusted net income and Adjusted earnings per share are included herein because we believe they assist 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 the aforementioned items, which 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 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 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 Aslidis Chief Financial Officer Euroseas Ltd. 11 Canterbury Lane, Watchung, NJ 07069 Tel. (908) 301-9091 E-mail: aha@euroseas.gr | Nicolas Bornozis Markella Kara Capital Link, Inc. 230 Park Avenue, Suite 1540 New York, NY 10169 Tel. (212) 661-7566 E-mail: euroseas@capitallink.com |
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1Adjusted EBITDA, Adjusted net income and Adjusted earnings 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.
FAQ
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