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Euroseas Ltd. Reports Results for the Year and Quarter Ended December 31, 2011

Friday, 10 February 2012 | 00:00
Euroseas Ltd., an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced yesterday its results  for the three month period and full year ended December 31, 2011.Aristides Pittas, Chairman and CEO of Euroseas, commented: "Containership and drybulk markets remained depressed during the fourth quarter of 2011 and year-to-date 2012 due to slowdown of demand and increase of vessel supply due to new vessel deliveries. The macroeconomic uncertainty that was mainly responsible for the slowdown in demand has remained high because of Eurozone's drawn-out handling of the sovereign debt issue.
"Although our drybulk fleet has continued to provide us with significant cash flow contributions, renewals of our containership vessel charters were completed at lower levels and, in fact, two of our vessels have been looking for employment for over a month. We anticipate our upcoming containership charter renewals to also be at lower levels but we are optimistic that the containership market will improve towards the middle of the year. In parallel, throughout the fourth quarter of 2011 and since the beginning of 2012, we have continued to monitor the secondhand markets in the containership and drybulk sectors and evaluate acquisitions opportunities as we expect to see quite attractive investments as vessels prices have declined.
"In view of the challenging market conditions and our desire to preserve cash to take advantage of new investment opportunities, our Board decided to reduce our a quarterly dividend to $0.05 per share which still represents a healthy annual yield of about 7.0% on the basis of our stock price on February 8, 2012."
Tasos Aslidis, Chief Financial Officer of Euroseas, commented: "The results of the fourth quarter of 2011 partly reflect the deteriorating state of the market which influenced the charter rates earned by our containership vessels that had their charters renewed during the last quarter. Additionally, an accelerated drydocking of one of our vessels influenced our fourth quarter results which were also only marginally affected by derivative losses compared to about $2.5 million derivative gains of the fourth quarter of 2010. However, our vessels earned on average about $2,000 per day per vessel more in the fourth quarter of 2011 as compared to the fourth quarter of 2010 resulting in a net income of $1.1 million versus a net loss of $0.9 million in the fourth quarter of last year.
"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, registered a decrease of about 0.5% during the fourth quarter of 2011 compared to the same quarter of last year and an increase of about 15.5% for the full year of 2011 over 2010; these increases are primarily due to the fact that in the first nine months periods of 2010 we had two laid-up vessels (out of a total of about 15.53 vessels on average for 2010) that incurred much lower daily running expenses and management fees. Drydocking expenses expressed on per vessel per day basis were lower by 53.3% in 2011 and 89.4% lower for the fourth quarter of 2011 as compared to the same periods in 2010 primarily because fewer of our vessels were drydocked in the fourth quarter and full year of 2011 as compared to the respective periods in 2010. As always, we want to emphasize that cost control remains a key component of our strategy.
"As of December 31, 2011, our outstanding debt was $74.9 million versus restricted and unrestricted cash of about $36.9 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $13.3 million, a number low enough to provide us with significant operational cash flow comfort. All our debt covenants were satisfied as of December 31, 2011."
Fourth Quarter 2011 Results:
For the fourth quarter of 2011, the Company reported total net revenues of $15.3 million representing a 20.0% increase over total net revenues of $12.8 million during the fourth quarter of 2010. The Company reported net income for the period of $1.1 million as compared to net losses of $0.9 million for the fourth quarter of 2010. The results for the fourth quarter of 2011 include a $0.3 million net unrealized gain on derivatives and trading securities and a $0.3 million net realized loss on derivatives as compared to $4.0 million net unrealized gain on derivatives and trading securities and $1.6 million realized loss on derivatives for the same period of 2010.
Depreciation expenses for the fourth quarter of 2011 remained unchanged at $4.6 million, as compared to the same period of 2010. On average, 16.00 vessels were owned and operated during the fourth quarter of 2011 earning an average time charter equivalent rate of $12,099 per day compared to 16.00 vessels in the same period of 2010 earning on average $10,091 per day.
Adjusted EBITDA for the fourth quarter of 2011 was $6.2 million, a 505% increase from $1.0 million achieved during the fourth quarter of 2010. Please see below for Adjusted EBITDA reconciliation to net income / loss and cash flow provided by operating activities.
Basic and diluted earnings per share for the fourth quarter of 2011 was $0.04, calculated on 31,125,961 basic and 31,160,238 diluted weighted average number of shares outstanding, compared to basic and diluted losses per share of $0.03 for the fourth quarter of 2010, calculated on 30,968,108 basic and diluted weighted average number of shares outstanding.
Excluding the effect on the earnings for the quarter of the unrealized gain and the realized loss on derivatives and unrealized loss on trading securities and amortization of fair value of charters acquired, the earnings per share for the quarter ended December 31, 2011 would have been $0.04 per share basic and diluted compared to losses of $0.12 per share for the quarter ended December 31, 2010. Usually, security analysts do not include the above items in their published estimates of earnings per share.
Full Year 2011 Results:
For the twelve months of 2011, the Company reported total net revenues of $61.4 million representing a 17.0% increase over total net revenues of $52.5 million during the twelve months of 2010. The Company reported net income for the period of $1.1 million as compared to net loss of $6.6 million for the twelve months of 2010. The results for the twelve months of 2011 include a $0.9 million net unrealized loss on derivatives and trading securities and a $0.8 million net realized loss on derivatives as compared to a $8.1 million net unrealized gain on derivatives and trading securities and $12.4 million net realized loss on derivatives for the same period of 2010.
Depreciation expenses for the twelve months of 2011 were $18.3 million compared to $18.0 million during the same period of 2010. On average, 16.00 vessels were owned and operated during the twelve months of 2011 earning an average time charter equivalent rate of $11,525 per day compared to 15.53 vessels in the same period of 2010 earning on average $11,201 per day.
Adjusted EBITDA for the twelve months of 2011 was $21.6 million, a 49.4% increase from $14.4 million achieved during the twelve months of 2010. Please see below for Adjusted EBITDA reconciliation to net income/loss and cash flow provided by operating activities.
Basic and diluted net income per share for the twelve months of 2011 was $0.04, calculated on 31,054,197 and 31,104,692 weighted average number of shares outstanding basic and diluted, respectively, compared to basic and diluted loss per share of $0.21 basic and diluted per share for the twelve months of 2010, calculated on 30,900,122 weighted average number of shares outstanding basic and diluted.
Excluding the effect on the earnings for 2011 of the unrealized and realized loss on derivatives, unrealized loss on trading securities and amortization of fair value of charters acquired, the earnings per share for the year ended December 31, 2011 would have been $0.05 per share basic and diluted compared to losses of $0.14 per share basic and diluted for 2010. Usually, security analysts do not include the above items in their published estimates of earnings per share.
Source: Euroseas Ltd.
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