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Maroussi, Athens, Greece - November 10, 2017 - 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 and nine month periods ended September 30, 2017.

Third Quarter 2017 Highlights:
• Total net revenues of $11.1 million. Net loss of $4.8 million; net loss attributable to common shareholders (after a $0.5 million dividend on Series B Preferred Shares) of $5.3 million or $0.48 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $0.061 per share basic and diluted.
• Adjusted EBITDA1 was $2.8 million.
• An average of 14.0 vessels were owned and operated during the third quarter of 2017 earning an average time charter equivalent rate of $8,529 per day.
• The Company declared its fifteenth dividend of $0.5 million on its Series B Preferred Shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.
First Nine Months 2017 Highlights:
Total net revenues of $29.4 million. Net loss of $8.0 million; net loss attributable to common shareholders (after a $1.3 million dividend on Series B Preferred Shares) of $9.4 million or $0.85 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders1 for the period was $0.481.
Adjusted EBITDA1 was $4.9 million.
An average of 13.5 vessels were owned and operated during the first nine months of 2017 earning an average time charter equivalent rate of $7,978 per day.
1Adjusted EBITDA, Adjusted net loss, Adjusted net loss attributable to common shareholders and Adjusted loss per share attributable to common shareholders are not recognized measurements under U.S. 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 U.S. GAAP.
Aristides Pittas, Chairman and CEO of Euroseas commented: "Both the drybulk and containership markets remained at satisfactory levels during the third quarter and month of October of 2017 despite the typical seasonal slowdown. With orderbook-to-fleet ratio at historically low levels, especially for the drybulk fleet, we expect supply pressures to ease. On the other hand, demand prospects are encouraging as the world economies seem to be recovering in a synchronized fashion for the first time in several years. In light of this expectation, we are evaluating opportunities to secure longer term charters at rates supporting our cash flow requirements and continue to position our assets to take advantage of investment opportunities. On this latter front, we have managed to expand our fleet with the recent acquisition of five container vessels from Euromar LLC in transactions with their lender banks. Euromar, previously our joint venture with two private equity firms, is a wholly owned subsidiary of Euroseas since September 2017.
"Furthermore, we continue to explore ways to improve our liquidity and leverage our presence in the capital markets and efficient operating cost structure to pursue merger and other growth opportunities."
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the third quarter of 2017 reflect the improvement of the market of drybulk and container vessels as compared to the same period of 2016. Our vessels earned on average daily rates that were approximately 10% higher than the daily rates earned during the same periods of 2016. As charter contracts are renewed or replaced with ones reflecting the higher market levels, we expect the average daily rates our vessels are earning to increase.
"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, registered a decline of about 1% for the third quarter as compared to the same period of last year and a decline of about 3.1% for the nine month period ended September 30, 2017 over the same period of 2016. Adjusted EBITDA during the third quarter of 2017 was $2.8 million versus $0.3 million in the third quarter of last year, and it reached $5.0 million versus negative ($0.8) million for the respective nine-month periods of 2017 and 2016.
"As of September 30, 2017, our outstanding debt (excluding the unamortized loan fees) was $60.0 million versus restricted and unrestricted cash of $10.9 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $13.8 million (excluding the unamortized loan fees) of which $4.9 million reflect a balloon payment that we are looking to refinance."
Third Quarter 2017 Results:
For the third quarter of 2017, the Company reported total net revenues of $11.1 million representing a 53.2% increase over total net revenues of $7.2 million during the third quarter of 2016. The Company reported net loss for the period of $4.8 million and a net loss attributable to common shareholders of $5.3 million, as compared to a net loss of $4.6 million and a net loss attributable to common shareholders of $5.0 million respectively, for the third quarter of 2016. The results for the third quarter of 2017 include a $4.6 million loss on write-down on two vessels classified as held for sale. The results for the third quarter of 2016 include a $1.8 million loss on termination of a newbuilding contract. Drydocking expenses amounted to $0.1 million during the third quarter of the year 2017 comprising part of the drydocking cost of one vessel that underwent drydocking during the end of the third quarter and the beginning of the fourth quarter of 2017 compared to one vessel that underwent drydocking during the third quarter of 2016 for a total amount of $0.6 million. Depreciation expense for the third quarter of 2017 was $2.2 million remaining unchanged compared to the same period of 2016. Although the average number of vessels increased, the new vessels acquired have a lower average daily depreciation charge as a result of their lower initial values (acquisition price) and greater remaining useful life (i.e. m/v Alexandros P) compared to the remaining vessels. In the third quarter of 2017, there was no equity loss in joint venture and other investment income as compared to equity loss of $0.66 million and other investment income of $0.34 million for the three months ended September 30, 2016, as in 2016, the Company concluded that its equity investment in Euromar and the invested portion of its investment in preferred units of Euromar were totally impaired and hence the Company also ceased recognising income on the preferred units. Euromar is a wholly owned subsidiary of Euroseas since September 2017, but its vessels are substantially under the control of its lenders and, thus, it has not been consolidated in our results nor any gain or loss from it has been recognized.
On average, 14.0 vessels were owned and operated during the third quarter of 2017 earning an average time charter equivalent rate of $8,529 per day compared to 11.0 vessels in the same period of 2016 earning on average $7,500 per day.
Adjusted EBITDA1 for the third quarter of 2017 was $2.8 million compared to $0.3 million achieved during the third quarter of 2016. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.
Basic and diluted loss per share attributable to common shareholders for the third quarter of 2017 was $0.48 calculated on 11,093,672 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.61 for the third quarter of 2016, calculated on 8,139,060 basic and diluted weighted average number of shares outstanding.
Excluding the effect on the loss attributable to common shareholders for the quarter of gain /loss on derivatives, the loss on write-down of vessels held for sale and the loss on termination of a newbuilding contract, the adjusted net loss per share attributable to common shareholders for the quarter ended September 30, 2017 would have been $0.06 per share basic and diluted compared to adjusted net loss of $0.40 per share basic and diluted for the quarter ended September 30, 2016. Usually, security analysts do not include the above items in their published estimates of earnings per share.
First Nine Months 2017 Results:
For the first nine months of 2017, the Company reported total net revenues of $29.4 million representing a 39.1% increase over total net revenues of $21.1 million during the first nine months of 2016. The Company reported a net loss for the period of $8.0 million and a net loss attributable to common shareholders of $9.4 million, as compared to net loss of $26.6 million and a net loss attributable to common shareholders of $27.9 million, respectively, for the first nine months of 2016. The results for the first nine months of 2017 include 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. The results for the first nine months of 2016 include a $0.2 million loss on derivatives, a $0.01 million gain on sale of a vessel, a $3.2 million loss on termination of two newbuilding contracts and a $14.0 million impairment of investment in joint venture. Depreciation expense for the first nine months of 2017 was $6.5 million compared to $6.6 million during the same period of 2016. Although the average number of vessels increased in the first nine months of 2017 compared to the same period of 2016, the new vessels acquired have a lower average daily depreciation charge as a result of their lower initial values (acquisition price) and greater remaining useful life (i.e. m/v Alexandros P) compared to the remaining vessels. In the first nine months of 2017, there was no equity loss in joint venture and other investment income, as compared to equity loss of $1.4 million and other investment income of $1.0 million for the nine months ended September 30, 2016, since the equity investment in Euromar and the invested portion of its investment in preferred units of Euromar was totally impaired in 2016, as mentioned above.
On average, 13.5 vessels were owned and operated during the first nine months of 2017 earning an average time charter equivalent rate of $7,978 per day compared to 11.3 vessels in the same period of 2016 earning on average $7,085 per day.
Adjusted EBITDA1 for the first nine months of 2017 was $5.0 million compared to $(0.8) million during the first nine months of 2016. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.
Basic and diluted loss per share attributable to common shareholders for the first nine months of 2017 was $0.85, calculated on 11,051,957 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $3.43 for the first nine months of 2016, calculated on 8,116,343 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 2017 of the gain / loss on derivatives, the gain on sale of a vessel, the loss on write-down of vessels held for sale, the loss on termination of newbuilding contracts and the impairment of investment in joint venture, the adjusted net loss per share attributable to common shareholders for the nine-month period ended September 30, 2017 would have been $0.48 compared to adjusted net loss of $1.29 per share basic and diluted for the same period in 2016. Usually, security analysts do not include the above items in their published estimates of earnings per share.
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 dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc., also an affiliated ship management company, which are 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 17 vessels, including 3 Panamax drybulk carriers, 1 Handymax drybulk carrier, 1 Kamsarmax drybulk carrier, 1 Ultramax drybulk carrier and 11 Feeder containerships and has agreed to acquire an intermediate containership scheduled to be delivered to the Company within 2017. Euroseas 6 drybulk carriers have a total cargo capacity of 417,753 dwt, its 11 containerships have a cargo capacity of 21,881 teu and including the containership to be acquired 27,481 teu. The Company has also signed a contract for the construction of one Kamsarmax (82,000 dwt) fuel efficient drybulk carrier. Including the new-building, the total cargo capacity of the Company's drybulk vessels will be 499,753 dwt.