Thursday, February 17, 2022

Grindrod Shipping (GRIN)
Strong Results Drive Positive Dividend Surprise

Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.

Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Quarterly Call today. Management will host a 8:00am EST call today. The number is 877-553-9962 and the code is Grindrod. With a larger owned fleet, a consistent cargo focused strategy and solid financial position, GRIN is well positioned to benefit from attractive dry bulk market fundamentals in 2022. In addition, options to acquire five chartered-in vessels represent built in growth opportunities.


Very strong finish to year.  4Q2021 EBITDA of $72.7 million was higher than our estimate of $67.3 million mainly due to robust TCE rates of $30.8k/day for Supras/Ultras and $28.8k/day for Handys, which were higher than our estimates of $30.3k/day for Supras/Ultras and $27.3k/day for Handys …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Thursday, February 17, 2022

Great Lakes Dredge & Dock (GLDD)
Strong Finish to Year and Positive 2022 Outlook Intact

Great Lakes Dredge & Dock Corp is a provider of dredging services in the United States. The company only’s operating segments is Dredging. Dredging involves the enhancement or preservation of navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Its projects portfolio includes Coastal Restoration, Coastal Protection, Port expansion, and others.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strong finish to year. 4Q2021 results ahead of expectations due to solid execution and less COVID-19 issues which more than offset late-quarter weather issues in the Northeast. Revenue of $210 million was ~$15 million lower than expected, but gross margin expanded to $53.0 million with gross margin improving to 25%. After a couple of weaker quarters, it was the strongest quarter in almost two years.


Recovery expected this year.  Fine tuning 2022 EBITDA estimate. With moderating COVID-19 costs, we estimate that 2022 EBITDA will recover to $144.2 million. More than 80% of current backlog should be converted to revenue this year and 1Q2022 awards of $48 million are shorter term. Three factors create headwinds this year, including dry docking activity, higher offshore wind support infrastructure …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Wednesday, February 16, 2022

Euroseas (ESEA)
Solid 4Q2021 Results and Forward Cover Remains High

Euroseas Ltd. provides ocean-going transportation services worldwide. The company owns and operates containerships that transport dry and refrigerated containerized cargoes, including manufactured products and perishables; and drybulk carriers that transport iron ore, coal, grains, bauxite, phosphate, and fertilizers. As of March 31, 2017, it had a fleet of seven containerships; and six drybulk carriers, including three Panamax drybulk carriers, one Handymax drybulk carrier, one Kamsarmax drybulk carrier, and one Ultramax drybulk carrier. The company was founded in 2005 and is based in Maroussi, Greece.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Reported EBITDA of $26.1 million slightly above expectations. Adding back dry dock expenses, we calculate adjusted 4Q2021 EBITDA of $27.3 million on TCE rates of $30.0k/day. Full year adjusted EBITDA was $56.8 million on TCE rates of $19.3k/day.


Forward 2022 cover of 97% at average TCE rates of $30.0k/day creates high visibility.  Recent fixtures pushed 2022 forward cover to 97%, and there are only two remaining opportunities to move TCE rates closer to market rates. At an average TCE rate of $30.6K/day, forward cover represents a solid base and our 2022 EBITDA estimate is $121.6 million, or well above our adjusted 2021 EBITDA of $56.8 …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Euroseas Ltd. Reports Results for the Year and Quarter Ended December 31, 2021

Research, News, and Market Data on Euroseas Ltd

 

ATHENS, Greece, Feb. 15, 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-month period and full year ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights:

• Total net revenues of $38.3 million. Net income and net income attributable to common shareholders of $22.7 million or $3.14 and $3.13 earnings per share basic and diluted, respectively. Adjusted net income attributable to common shareholders¹ for the period was $22.9 million or $3.18 and $3.17 per share basic and diluted, respectively.

• Adjusted EBITDA¹ was $26.1 million.

• An average of 15.01 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,994 per day.

Full Year 2021 Highlights:

• Total net revenues of $93.9 million. Net income of $42.9 million; net income attributable to common shareholders (after a $0.3 million dividend on Series B Preferred Shares and a $0.3 million of preferred deemed dividend arising out of the redemption of approximately $8.4 million of Series B Preferred Shares in the first half of 2021) of $42.3 million or $6.06 and $6.05 earnings per share basic and diluted, respectively. Adjusted net income attributable to common shareholders¹ for the period was $42.0 million or $6.02 and $6.01 per share basic and diluted, respectively.

• Adjusted EBITDA¹ was $52.7 million.

• An average of 14.25 vessels were owned and operated during the year 2021, earning an average time charter equivalent rate of $19,309 per day.

Recent developments

• On January 28, 2022, we signed a contract for the construction of two additional Eco design fuel efficient containerships. The vessels will have a carrying capacity of about 2,800 teu each and will be built at Hyundai Mipo Dockyard Co. in South Korea. The two newbuildings are scheduled to be delivered during the fourth quarter of 2023 and first quarter of 2024, respectively. The total consideration for each of these two newbuilding contracts is approximately $43.15 million and will be financed with a combination of debt and equity. The vessels are sisterships of a pair of vessels ordered by Euroseas Ltd. in June 2021.

^{_____________________________________________
1}Adjusted 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.

Aristides Pittas, Chairman and CEO of Euroseas commented:
“The fourth quarter of 2021 was a seminal one for Euroseas as we recorded the highest net income level in our history of about $22.7 million. At the same time, we have chartered about 92% of our available capacity in 2022, about 62% of our available capacity in 2023, and even about 40% of our available days in 2024. The high level of our contracted revenues secures extremely high profitability levels for Euroseas over the next two to three years.”

“In light of the increased environmental regulation that would reduce -on average- the transportation capacity of the existing fleet, we have shifted our strategic focus on how to position Euroseas post-pandemic and beyond. In this context, in January 2022, we placed an order for two more 2,800 teu vessels that we expect to have delivered in the fourth quarter of 2023 and first quarter of 2024. This brings our newbuilding program to four vessels and solidifies our market presence in the large eco feeder sector.”

“The retreat of the containerships rates during November and December 2021 proved to be short-lived. With the turn of the year, containership rates started increasing again and have returned to -and for some segments exceeded- the record high levels set only four months ago in October 2021. We are quite optimistic about the strength of the market over the next couple of years despite the expected easing of the inefficiencies in ports, due to the limited deliveries in the near term and the constraints on effective fleet supply of the emissions regulations from 2023 onwards alongside trade growth which has rebounded from the pandemic lows. We continuously monitor market developments and evaluate investment opportunities focusing on creating consistent returns for our shareholders and exploiting our public listing and increasing liquidity position.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The operating results of the fourth quarter of 2021 reflect the increased levels of charter rates in the containership markets as compared to the same period of 2020, with net income amounting to $22.7 million for the fourth quarter in 2021 compared to a net income of $0.6 million for the fourth quarter of 2020. On average, during the fourth quarter of 2021, our vessels earned approximately 185.7% higher time charter equivalent rates compared to the fourth quarter of 2020.”

“Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, were higher by 7.6% during the fourth quarter of 2021 compared to the same quarter of last year. The increased operating expenses for the fourth quarter of 2021 are mainly due to higher hull and machinery insurance premiums and the increased crewing costs for our vessels resulting from difficulties in crew rotation due to COVID-19 related restrictions. Adjusted EBITDA during the fourth quarter of 2021 was $26.1 million compared to the $2.1 million achieved in fourth quarter of last year, and it reached $52.7 million versus $11.8 million for the respective twelve-month periods of 2021 and 2020.”

“As of December 31, 2021, our outstanding bank debt (excluding the unamortized loan fees) was $119.0 million, versus restricted and unrestricted cash of approximately $31.5 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $29.3 million (excluding the unamortized loan fees).”

Fourth Quarter 2021 Results:
For the fourth quarter of 2021, the Company reported total net revenues of $38.3 million representing a 217.9% increase over total net revenues of $12.0 million during the fourth quarter of 2020, which was the result of the increased average time charter rates our vessels earned in the fourth quarter of 2021 compared to the corresponding period of 2020. The Company reported net income and net income attributable to common shareholders for the period of $22.7 million, as compared to a net income of $0.6 million and a net income attributable to common shareholders of $0.4 million for the fourth quarter of 2020.

Vessel operating expenses for the same period of 2021 amounted to $8.3 million as compared to $7.5 million for the same period of 2020. The increased amount is mainly due to the higher number of vessels owned and operated in the three months of 2021 compared to the same period of 2020, as well as the increased crewing costs for our vessels compared to the same period of 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions and the increase in hull and machinery insurance premiums. Drydocking expenses amounted to $1.2 million during the fourth quarter of 2021 comprising the cost of one vessel completing her special survey with drydock. For the same period of 2020 drydocking expenses amounted to $0.1 million comprising the cost of one vessel completing her intermediate survey in-water. Depreciation expense for the fourth quarter of 2021 increased to $2.4 million from $1.6 million in the fourth quarter of 2020, as a result of the increased number of vessels operated and the fact that the new vessels acquired in the fourth quarter of 2021 have a higher average daily depreciation charge as a result of their higher acquisition price compared to the remaining vessels. General and administrative expenses increased to $1.2 million in the fourth quarter of 2021, as compared to $0.8 million in the fourth quarter of 2020, mainly due to higher executive compensation expenses.

On average, 15.01 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,994 per day compared to 14.43 vessels in the same period of 2020 earning on average $10,497 per day.

Interest and other financing costs for the fourth quarter of 2021 amounted to $0.78 million compared to $0.81 million for the same period of 2020. This decrease is due to the decrease in the weighted average LIBOR rate, partly offset by the increase in the Company’s average outstanding indebtedness in the current period compared to the same period of 2020.

Adjusted EBITDA¹ for the fourth quarter of 2021 was $26.1 million compared to $2.1 million for the corresponding period in 2020.

Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2021 was $3.14 and $3.13 calculated on 7,210,466 and 7,244,042 basic and diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $0.07 for the fourth quarter of 2020, calculated on 6,149,300 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized loss on derivatives, the amortization of below market time charters acquired and the depreciation charged due to the increased value of the vessel acquired with below market time charter, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2021 would have been $3.18 and $3.17 per share basic and diluted, respectively, compared to an adjusted loss of $0.16 per share basic and diluted for the quarter ended December 31, 2020, after excluding unrealized gain on derivatives, net gain on sale of vessels, the amortization of below market time charters acquired and the depreciation charged due to the increased value of the vessels acquired with below market time charters. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Full Year 2021 Results:
For the full year of 2021, the Company reported total net revenues of $93.9 million, representing a 76.2% increase, over total net revenues of $53.3 million during the twelve months of 2020. The Company reported a net income for the year of $42.9 million and a net income attributable to common shareholders of $42.3 million, as compared to a net income of $4.0 million and a net income attributable to common shareholders of $3.3 million for the twelve months of 2020. The results for the twelve months of 2021 include a $0.2 million of amortization of below market time charters acquired and a $0.2 million unrealized gain on derivatives. The results for the twelve months of 2020 included a $1.7 million of amortization of below market time charters acquired, a $0.6 million unrealized loss on derivatives, a $2.5 million net gain on sale of vessels and a $0.1 million loss on write-down of vessel held for sale.

Vessel operating expenses for the twelve months of 2021 amounted to $29.7 million as compared to $32.2 million for the same period of 2020. This decrease in vessel operating expenses is due to the lower average number of vessels operated by the Company in the twelve months of 2021 as compared to the same period of 2020, partly offset by the increased crewing costs for our vessels compared to the same period of 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions and the increase in hull and machinery insurance premiums. Depreciation expense for the twelve months of 2021 was $7.2 million compared to $6.6 million during the same period of 2020. Although the average number of vessels operating decreased in 2021 as compared to the same period of 2020, the new vessels acquired in the fourth quarter of 2021 have a higher average daily depreciation charge as a result of their higher acquisition price compared to the vessels sold during 2020, some of which were also fully depreciated.

Related party management fees for the twelve months of 2021 were $4.3 million compared to $5.3 million for the same period of 2020. This decrease in related party management fees is due to the lower average number of vessels operated by the Company in the twelve months of 2021 as compared to the same period of 2020, as well as due to termination fees paid in 2020 for the vessels sold during last year, in accordance with the management agreement. General and administrative expenses increased to $3.5 million during the twelve months of 2021 as compared to $3.0 million in the last year, mainly due to higher executive compensation expenses.

Drydocking expenses amounted to $4.1 million for the twelve months of 2021 (three vessels passed their special survey with drydock), compared to $0.5 million for the same period of 2020 (one vessel passed her intermediate survey in-water and three vessels passed their special survey in-water).

On average, 14.25 vessels were owned and operated during the twelve months of 2021 earning an average time charter equivalent rate of $19,309 per day compared to 17.23 vessels in the same period of 2020 earning on average $9,445 per day.

Interest and other financing costs for the twelve months of 2021 amounted to $2.8 million compared to $4.1million for the same period of 2020. This decrease is due to the decrease in the weighted average LIBOR rate, partly offset by the increase in the Company’s average outstanding indebtedness in the current period compared to the same period of 2020.

Adjusted EBITDA¹ for the twelve months of 2021 was $52.7 million compared to $11.8 million during the twelve months of 2020.

Basic and diluted earnings per share attributable to common shareholders for the twelve months of 2021 was $6.06 and $6.05, calculated on 6,976,905 and 6,993,405 basic and diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $0.58 for the twelve months of 2020, calculated on 5,753,917 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the twelve months of 2021 of the unrealized gain on derivatives, the amortization of the below market time charters acquired, the depreciation charged due to the increased value of the vessel acquired with below market time charter and the net loss on sale of vessel, the adjusted earnings attributable to common shareholders for the year ended December 31, 2021 would have been $6.02 and $6.01 basic and diluted, respectively, compared to adjusted loss of $0.02 per share basic and diluted for 2020, after excluding unrealized loss on derivatives, net gain on sale of vessels, loss on write down of vessel held for sale, amortization of the below market time charters acquired and the depreciation charged due to the increased value of the vessels acquired with below market time charters. As previously mentioned, usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:

The Euroseas Ltd. fleet profile is as follows:

Notes:

(*) TC denotes time charter. All dates listed are the earliest redelivery dates under each time charter 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 (+).

(**) Rate is net of commissions (which are typically 5-6.25%)

(***) The previous charter of M/V Synergy Oakland of $202,000/day exceeded its maximum duration by about 25 days due to port delays with payment of the higher ($202,000/day) rate to the Company continuing during the extension. However, the extension resulted in the loss of the subsequent short-term charter of $130,000/day that was to be performed before the 4-year charter starts. The vessel, after an idle period of 15 days, was chartered for a single voyage charter at $160,000/day after the completion of which it will commence the 4-yr charter; the new charter arrangements will result in about the same average rate and total revenues as the original arrangements.

Summary Fleet Data:

(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, vessels committed for sale or vessels that suffered unrepaired damages, are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up, or with vessels that were committed for sale or suffered unrepaired damages.

(4) Available days. We define available days as the Calendar days in a period net of scheduled off-hire days as defined above. 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 rate, is a measure of the average daily net 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 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) 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 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 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. TVOE is the sum of vessel operating expenses, 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) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method, divided by the fleet calendar days for the relevant period. 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, Tuesday, February 15, 2022 at 10:30 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: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238- 0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “Euroseas” to the operator.

Audio Webcast – Slides Presentation:
There will be a live and then archived webcast of the conference call and accompanying slides, available through the Company’s website. To listen to the archived audio file, visit our website http://www.euroseas.gr and click on Company Presentations under our Investor Relations page. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

The slide presentation on the fourth quarter ended December 31, 2021 will also be available in PDF format 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)

Euroseas Ltd.,
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)

Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)

Euroseas Ltd.
Reconciliation of Net income to Adjusted EBITDA
(All amounts expressed in U.S. Dollars)

Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net income before interest, income taxes, depreciation, loss on interest rate swap derivatives, net (gain) / loss on sale of vessels, amortization of below market time charters acquired and loss on write down of vessel held for sale. 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 and we believe 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, financial costs, amortization of below market time charters acquired, loss on interest rate swaps, net (gain) / loss on sale of vessels, loss on write down of vessel held for sale 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 Net income to Adjusted net (loss) / income
(All amounts expressed in U.S. Dollars – except share data and number of shares)

Adjusted net (loss) / income and Adjusted (loss) / earnings per share Reconciliation:
Euroseas Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized (gain) / loss on derivatives, net (gain) / loss on sale of vessels, loss on write down of vessel held for sale, amortization of below market time charters acquired, and depreciation charged due to increase in vessel value from below market time charter acquired. Adjusted net (loss) / income and Adjusted (loss) / earnings per share is included herein because we believe it assists 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 unrealized (gain) / loss on derivatives, net (gain) / loss on sale of vessels, loss on write down of vessel held for sale, amortization of below market time charters acquired and depreciation charged due to increase in vessel value from below market time charter acquired, which items may significantly affect results of operations between periods.

Adjusted net (loss) / income and Adjusted (loss) / 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 (loss) / income and Adjusted (loss) / 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 16 vessels, including 10 Feeder containerships and 6 Intermediate Container carriers. Euroseas 16 containerships have a cargo capacity of 50,371 teu. After the delivery of four feeder containership newbuildings in 2023 and the first half of 2024, Euroseas’ fleet will consist of 20 vessels with a total carrying capacity of 61,571 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

Euroseas Ltd. Reports Results for the Year and Quarter Ended December 31, 2021

Research, News, and Market Data on Euroseas Ltd

 

ATHENS, Greece, Feb. 15, 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-month period and full year ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights:

• Total net revenues of $38.3 million. Net income and net income attributable to common shareholders of $22.7 million or $3.14 and $3.13 earnings per share basic and diluted, respectively. Adjusted net income attributable to common shareholders¹ for the period was $22.9 million or $3.18 and $3.17 per share basic and diluted, respectively.

• Adjusted EBITDA¹ was $26.1 million.

• An average of 15.01 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,994 per day.

Full Year 2021 Highlights:

• Total net revenues of $93.9 million. Net income of $42.9 million; net income attributable to common shareholders (after a $0.3 million dividend on Series B Preferred Shares and a $0.3 million of preferred deemed dividend arising out of the redemption of approximately $8.4 million of Series B Preferred Shares in the first half of 2021) of $42.3 million or $6.06 and $6.05 earnings per share basic and diluted, respectively. Adjusted net income attributable to common shareholders¹ for the period was $42.0 million or $6.02 and $6.01 per share basic and diluted, respectively.

• Adjusted EBITDA¹ was $52.7 million.

• An average of 14.25 vessels were owned and operated during the year 2021, earning an average time charter equivalent rate of $19,309 per day.

Recent developments

• On January 28, 2022, we signed a contract for the construction of two additional Eco design fuel efficient containerships. The vessels will have a carrying capacity of about 2,800 teu each and will be built at Hyundai Mipo Dockyard Co. in South Korea. The two newbuildings are scheduled to be delivered during the fourth quarter of 2023 and first quarter of 2024, respectively. The total consideration for each of these two newbuilding contracts is approximately $43.15 million and will be financed with a combination of debt and equity. The vessels are sisterships of a pair of vessels ordered by Euroseas Ltd. in June 2021.

^{_____________________________________________
1}Adjusted 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.

Aristides Pittas, Chairman and CEO of Euroseas commented:
“The fourth quarter of 2021 was a seminal one for Euroseas as we recorded the highest net income level in our history of about $22.7 million. At the same time, we have chartered about 92% of our available capacity in 2022, about 62% of our available capacity in 2023, and even about 40% of our available days in 2024. The high level of our contracted revenues secures extremely high profitability levels for Euroseas over the next two to three years.”

“In light of the increased environmental regulation that would reduce -on average- the transportation capacity of the existing fleet, we have shifted our strategic focus on how to position Euroseas post-pandemic and beyond. In this context, in January 2022, we placed an order for two more 2,800 teu vessels that we expect to have delivered in the fourth quarter of 2023 and first quarter of 2024. This brings our newbuilding program to four vessels and solidifies our market presence in the large eco feeder sector.”

“The retreat of the containerships rates during November and December 2021 proved to be short-lived. With the turn of the year, containership rates started increasing again and have returned to -and for some segments exceeded- the record high levels set only four months ago in October 2021. We are quite optimistic about the strength of the market over the next couple of years despite the expected easing of the inefficiencies in ports, due to the limited deliveries in the near term and the constraints on effective fleet supply of the emissions regulations from 2023 onwards alongside trade growth which has rebounded from the pandemic lows. We continuously monitor market developments and evaluate investment opportunities focusing on creating consistent returns for our shareholders and exploiting our public listing and increasing liquidity position.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The operating results of the fourth quarter of 2021 reflect the increased levels of charter rates in the containership markets as compared to the same period of 2020, with net income amounting to $22.7 million for the fourth quarter in 2021 compared to a net income of $0.6 million for the fourth quarter of 2020. On average, during the fourth quarter of 2021, our vessels earned approximately 185.7% higher time charter equivalent rates compared to the fourth quarter of 2020.”

“Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, were higher by 7.6% during the fourth quarter of 2021 compared to the same quarter of last year. The increased operating expenses for the fourth quarter of 2021 are mainly due to higher hull and machinery insurance premiums and the increased crewing costs for our vessels resulting from difficulties in crew rotation due to COVID-19 related restrictions. Adjusted EBITDA during the fourth quarter of 2021 was $26.1 million compared to the $2.1 million achieved in fourth quarter of last year, and it reached $52.7 million versus $11.8 million for the respective twelve-month periods of 2021 and 2020.”

“As of December 31, 2021, our outstanding bank debt (excluding the unamortized loan fees) was $119.0 million, versus restricted and unrestricted cash of approximately $31.5 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $29.3 million (excluding the unamortized loan fees).”

Fourth Quarter 2021 Results:
For the fourth quarter of 2021, the Company reported total net revenues of $38.3 million representing a 217.9% increase over total net revenues of $12.0 million during the fourth quarter of 2020, which was the result of the increased average time charter rates our vessels earned in the fourth quarter of 2021 compared to the corresponding period of 2020. The Company reported net income and net income attributable to common shareholders for the period of $22.7 million, as compared to a net income of $0.6 million and a net income attributable to common shareholders of $0.4 million for the fourth quarter of 2020.

Vessel operating expenses for the same period of 2021 amounted to $8.3 million as compared to $7.5 million for the same period of 2020. The increased amount is mainly due to the higher number of vessels owned and operated in the three months of 2021 compared to the same period of 2020, as well as the increased crewing costs for our vessels compared to the same period of 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions and the increase in hull and machinery insurance premiums. Drydocking expenses amounted to $1.2 million during the fourth quarter of 2021 comprising the cost of one vessel completing her special survey with drydock. For the same period of 2020 drydocking expenses amounted to $0.1 million comprising the cost of one vessel completing her intermediate survey in-water. Depreciation expense for the fourth quarter of 2021 increased to $2.4 million from $1.6 million in the fourth quarter of 2020, as a result of the increased number of vessels operated and the fact that the new vessels acquired in the fourth quarter of 2021 have a higher average daily depreciation charge as a result of their higher acquisition price compared to the remaining vessels. General and administrative expenses increased to $1.2 million in the fourth quarter of 2021, as compared to $0.8 million in the fourth quarter of 2020, mainly due to higher executive compensation expenses.

On average, 15.01 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,994 per day compared to 14.43 vessels in the same period of 2020 earning on average $10,497 per day.

Interest and other financing costs for the fourth quarter of 2021 amounted to $0.78 million compared to $0.81 million for the same period of 2020. This decrease is due to the decrease in the weighted average LIBOR rate, partly offset by the increase in the Company’s average outstanding indebtedness in the current period compared to the same period of 2020.

Adjusted EBITDA¹ for the fourth quarter of 2021 was $26.1 million compared to $2.1 million for the corresponding period in 2020.

Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2021 was $3.14 and $3.13 calculated on 7,210,466 and 7,244,042 basic and diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $0.07 for the fourth quarter of 2020, calculated on 6,149,300 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized loss on derivatives, the amortization of below market time charters acquired and the depreciation charged due to the increased value of the vessel acquired with below market time charter, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2021 would have been $3.18 and $3.17 per share basic and diluted, respectively, compared to an adjusted loss of $0.16 per share basic and diluted for the quarter ended December 31, 2020, after excluding unrealized gain on derivatives, net gain on sale of vessels, the amortization of below market time charters acquired and the depreciation charged due to the increased value of the vessels acquired with below market time charters. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Full Year 2021 Results:
For the full year of 2021, the Company reported total net revenues of $93.9 million, representing a 76.2% increase, over total net revenues of $53.3 million during the twelve months of 2020. The Company reported a net income for the year of $42.9 million and a net income attributable to common shareholders of $42.3 million, as compared to a net income of $4.0 million and a net income attributable to common shareholders of $3.3 million for the twelve months of 2020. The results for the twelve months of 2021 include a $0.2 million of amortization of below market time charters acquired and a $0.2 million unrealized gain on derivatives. The results for the twelve months of 2020 included a $1.7 million of amortization of below market time charters acquired, a $0.6 million unrealized loss on derivatives, a $2.5 million net gain on sale of vessels and a $0.1 million loss on write-down of vessel held for sale.

Vessel operating expenses for the twelve months of 2021 amounted to $29.7 million as compared to $32.2 million for the same period of 2020. This decrease in vessel operating expenses is due to the lower average number of vessels operated by the Company in the twelve months of 2021 as compared to the same period of 2020, partly offset by the increased crewing costs for our vessels compared to the same period of 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions and the increase in hull and machinery insurance premiums. Depreciation expense for the twelve months of 2021 was $7.2 million compared to $6.6 million during the same period of 2020. Although the average number of vessels operating decreased in 2021 as compared to the same period of 2020, the new vessels acquired in the fourth quarter of 2021 have a higher average daily depreciation charge as a result of their higher acquisition price compared to the vessels sold during 2020, some of which were also fully depreciated.

Related party management fees for the twelve months of 2021 were $4.3 million compared to $5.3 million for the same period of 2020. This decrease in related party management fees is due to the lower average number of vessels operated by the Company in the twelve months of 2021 as compared to the same period of 2020, as well as due to termination fees paid in 2020 for the vessels sold during last year, in accordance with the management agreement. General and administrative expenses increased to $3.5 million during the twelve months of 2021 as compared to $3.0 million in the last year, mainly due to higher executive compensation expenses.

Drydocking expenses amounted to $4.1 million for the twelve months of 2021 (three vessels passed their special survey with drydock), compared to $0.5 million for the same period of 2020 (one vessel passed her intermediate survey in-water and three vessels passed their special survey in-water).

On average, 14.25 vessels were owned and operated during the twelve months of 2021 earning an average time charter equivalent rate of $19,309 per day compared to 17.23 vessels in the same period of 2020 earning on average $9,445 per day.

Interest and other financing costs for the twelve months of 2021 amounted to $2.8 million compared to $4.1million for the same period of 2020. This decrease is due to the decrease in the weighted average LIBOR rate, partly offset by the increase in the Company’s average outstanding indebtedness in the current period compared to the same period of 2020.

Adjusted EBITDA¹ for the twelve months of 2021 was $52.7 million compared to $11.8 million during the twelve months of 2020.

Basic and diluted earnings per share attributable to common shareholders for the twelve months of 2021 was $6.06 and $6.05, calculated on 6,976,905 and 6,993,405 basic and diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $0.58 for the twelve months of 2020, calculated on 5,753,917 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the twelve months of 2021 of the unrealized gain on derivatives, the amortization of the below market time charters acquired, the depreciation charged due to the increased value of the vessel acquired with below market time charter and the net loss on sale of vessel, the adjusted earnings attributable to common shareholders for the year ended December 31, 2021 would have been $6.02 and $6.01 basic and diluted, respectively, compared to adjusted loss of $0.02 per share basic and diluted for 2020, after excluding unrealized loss on derivatives, net gain on sale of vessels, loss on write down of vessel held for sale, amortization of the below market time charters acquired and the depreciation charged due to the increased value of the vessels acquired with below market time charters. As previously mentioned, usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:

The Euroseas Ltd. fleet profile is as follows:

Notes:

(*) TC denotes time charter. All dates listed are the earliest redelivery dates under each time charter 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 (+).

(**) Rate is net of commissions (which are typically 5-6.25%)

(***) The previous charter of M/V Synergy Oakland of $202,000/day exceeded its maximum duration by about 25 days due to port delays with payment of the higher ($202,000/day) rate to the Company continuing during the extension. However, the extension resulted in the loss of the subsequent short-term charter of $130,000/day that was to be performed before the 4-year charter starts. The vessel, after an idle period of 15 days, was chartered for a single voyage charter at $160,000/day after the completion of which it will commence the 4-yr charter; the new charter arrangements will result in about the same average rate and total revenues as the original arrangements.

Summary Fleet Data:

(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, vessels committed for sale or vessels that suffered unrepaired damages, are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up, or with vessels that were committed for sale or suffered unrepaired damages.

(4) Available days. We define available days as the Calendar days in a period net of scheduled off-hire days as defined above. 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 rate, is a measure of the average daily net 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 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) 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 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 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. TVOE is the sum of vessel operating expenses, 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) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method, divided by the fleet calendar days for the relevant period. 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, Tuesday, February 15, 2022 at 10:30 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: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238- 0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “Euroseas” to the operator.

Audio Webcast – Slides Presentation:
There will be a live and then archived webcast of the conference call and accompanying slides, available through the Company’s website. To listen to the archived audio file, visit our website http://www.euroseas.gr and click on Company Presentations under our Investor Relations page. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

The slide presentation on the fourth quarter ended December 31, 2021 will also be available in PDF format 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)

Euroseas Ltd.,
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)

Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)

Euroseas Ltd.
Reconciliation of Net income to Adjusted EBITDA
(All amounts expressed in U.S. Dollars)

Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net income before interest, income taxes, depreciation, loss on interest rate swap derivatives, net (gain) / loss on sale of vessels, amortization of below market time charters acquired and loss on write down of vessel held for sale. 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 and we believe 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, financial costs, amortization of below market time charters acquired, loss on interest rate swaps, net (gain) / loss on sale of vessels, loss on write down of vessel held for sale 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 Net income to Adjusted net (loss) / income
(All amounts expressed in U.S. Dollars – except share data and number of shares)

Adjusted net (loss) / income and Adjusted (loss) / earnings per share Reconciliation:
Euroseas Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized (gain) / loss on derivatives, net (gain) / loss on sale of vessels, loss on write down of vessel held for sale, amortization of below market time charters acquired, and depreciation charged due to increase in vessel value from below market time charter acquired. Adjusted net (loss) / income and Adjusted (loss) / earnings per share is included herein because we believe it assists 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 unrealized (gain) / loss on derivatives, net (gain) / loss on sale of vessels, loss on write down of vessel held for sale, amortization of below market time charters acquired and depreciation charged due to increase in vessel value from below market time charter acquired, which items may significantly affect results of operations between periods.

Adjusted net (loss) / income and Adjusted (loss) / 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 (loss) / income and Adjusted (loss) / 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 16 vessels, including 10 Feeder containerships and 6 Intermediate Container carriers. Euroseas 16 containerships have a cargo capacity of 50,371 teu. After the delivery of four feeder containership newbuildings in 2023 and the first half of 2024, Euroseas’ fleet will consist of 20 vessels with a total carrying capacity of 61,571 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

Monday, February 14, 2022

Grindrod Shipping (GRIN)
Results Out This Week – On Track for Strong 2022

Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.

Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2021 Results out this week — AMC on Wednesday February 16th. Management will host a 8:00am EST call on Thursday, February 17th. The number is 877-553-9962 and the code is Grindrod. With a larger owned fleet, a consistent cargo focused strategy and solid financial position, GRIN is well positioned to benefit from attractive dry bulk market fundamentals in 2022. In addition, options to acquire five chartered-in vessels represent built in growth opportunities.


Expect strong finish to year.  No change to 4Q2021 and 2021 EBITDA estimates. Looking for 4Q2021 EBITDA of $67.3 million based on TCE rates of $30.3k/day for Supras/Ultras and $27.3k/day for Handys. The 4Q2021 forward cover of ~70% looked good with 1,579 Supra/Ultra operating days booked at $33.1k/day and 1,205 Handy days booked at $30.3k/day. Less days booked than 3Q2021, but at higher rates. Full …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Monday, February 14, 2022

EuroDry (EDRY)
Looking Beyond Seasonal Volatility

EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands and trades on the NASDAQ Capital Market under the ticker EDRY. EDRY is the product of a spin-off of the dry bulk fleet by Euroseas (ESEA) completed in May 2018. For every five ESEA shares, ESEA shareholders received one EDRY share. There are currently ~2.2 million EDRY shares outstanding. EuroDry operates in the dry bulk shipping markets. EuroDry’s operations are managed by Eurobulk Ltd., an affiliated ship management company, and Eurobulk FE (Far East) Ltd, which are responsible for the day-to-day commercial and technical management and operation of the fleet. EuroDry employs the fleet on spot and period charters and through pool arrangements.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A solid quarter caps a strong year. Reported adjusted 4Q2021 EBITDA of $16.0 million included minimal dry dock expenses, which was ~$3.0 million higher than 3Q2021. TCE rates averaged $29,157/day. Reported adjusted 2021 EBITDA of $42.3 million included minimal dry dock expenses, which was well above 2020 adjusted EBITDA of $6.2 million. TCE rates averaged $24,222/day.


Adjusting 2022 EBITDA estimate to $59.4 million based on TCE rates of $25.8k/day.  Visibility is limited with forward cover of 19% and seasonality is expected, but acquisitions and a well balanced dry bulk market set a good tone for this year. While visibility is low, operating leverage is very high; each $1.0k/day change in the BKI/BPI/BSI indices impacts cash flow by +/- $1.4 million, or …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

EuroDry Ltd. Reports Results for the Year and Quarter Ended December 31, 2021

News and Market Data on EuroDry Ltd.

 

ATHENS, Greece, Feb. 09, 2022 (GLOBE NEWSWIRE) — EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three- and twelve-month periods ended December 31, 2021.  

Fourth Quarter 2021 Highlights:

• Total net revenues of $22.3 million.
  
  
• Net income attributable to common shareholders of $15.2 million or $5.38 and $5.32 earnings per share basic and diluted, respectively, inclusive of unrealized gain on derivatives.
  
  
• Adjusted net income attributable to common shareholders¹ for the quarter of $12.3 million, or, $4.34 and $4.29 per share basic and diluted, respectively. The adjusted net income attributable to common shareholders includes a $0.5m non-cash charge for a “Preferred deemed dividend” resulting from the redemption of the Company’s Series B Preferred Shares.
  
  
• Adjusted EBITDA¹ was $16.0 million.
  
  
• An average of 9.0 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,157 per day.
  
  
• The Company declared a dividend of $0.2 million on its Series B Preferred Shares. The dividend was paid in cash. In addition, as previously announced, in December 2021 the Company redeemed all of its outstanding Series B Preferred Shares at par amounting to $13.6 million.
  

_{¹Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s 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.}

Full Year 2021 Highlights:

• Total net revenues of $64.4 million.
  
  
• Net income attributable to common shareholders of $29.4 million, or $11.63 and $11.53 earnings per share basic and diluted, respectively, inclusive of unrealized loss on derivatives and a loss on debt extinguishment.
  
  
• Adjusted net income attributable to common shareholders¹ for the period was $30.3 million or $11.98 and $11.88 adjusted earnings per share basic and diluted, respectively. The adjusted net income attributable to common shareholders includes a $0.7m non-cash charge for a “Preferred deemed dividend” resulting from the redemption of the Company’s Series B Preferred Shares.
  
  
• Adjusted EBITDA¹ was $42.3 million.
  
  
• An average of 7.9 vessels were owned and operated during the twelve months of 2021 earning an average time charter equivalent rate of $24,222 per day.
  

Recent developments

In January 2022, the Company acquired M/V Molyvos Luck, a 57,924 dwt drybulk vessel built in 2014, for $21.2 million. The vessel was majority owned by a third party and has been managed by Eurobulk Ltd., also the manager of the majority of the Company’s vessels. The vessel will be delivered to the Company around the middle of February 2022.The Company will also assume the existing charter of the vessel at $13,250/day until April 2022. The acquisition will be initially financed by the Company’s own funds; a bank loan will be arranged to partly finance the acquisition, using the acquired vessel as collateral.

Aristides Pittas, Chairman and CEO of EuroDry commented:

“We are pleased to report that, in the fourth quarter of 2021, we took advantage of the market levels registering our best quarter on record with more than $15m of net income. We also redeemed all our outstanding Series B Preferred shares reducing our cost of capital and increasing earnings to our common shareholders in 2022 and beyond.

“During the quarter, drybulk spot earnings, after peaking in October 2021 when they registered their highest level since early 2010, subsequently retreated by about 35% in November and December, while in January 2022 they retreated by approximately another 30%; at the same time, after initially retreating too, one-year time rates recovered during December 2021 and January 2022 suggesting that there are expectations amongst the market participants that the spot earnings’ retreat, a cyclically common effect during the first couple of months of every year, is only temporary. Even at their present levels though, spot earnings are at high levels relative to the last decade.

“Despite the market strength during 2021, the orderbook remained at historically low levels. This suggests minimal fleet growth over the next 2-3 years, likely, leading to higher rates in the rest of 2022 if trade increases even at just historically average levels. Within this framework of expectations, we have expanded our fleet acquiring our tenth vessel, M/V Molyvos Luck, which will further position us to take advantage of expected market increases.

“Overall, we are committed to continue growing EuroDry focusing on the middle size range of drybulk carriers. Our increased liquidity and low leverage ratio provide us with significant firepower to pursue our strategy.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the fourth quarter of 2021 increased significantly compared to the same period of 2020 as a result of the time charter equivalent rates our vessels earned during the quarter which were higher by 171% compared to the average time charter equivalent rates our vessels earned in the fourth quarter of 2020.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,324 per vessel per day during the fourth quarter of 2021 as compared to $6,258 per vessel per day for the same quarter of last year, and $6,456 per vessel per day for the entire year of 2021 as compared to $6,211 per vessel per day for the same period of 2020. This increase is mainly due to increased crewing costs in 2021 compared to 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions.

“Adjusted EBITDA during the fourth quarter of 2021 was $16.0 million versus $1.8 million in the fourth quarter of last year. As of December 31, 2021, our outstanding debt (excluding the unamortized loan fees) was $79.4 million, while unrestricted and restricted cash was $29.5 million. As of the same date, our scheduled debt repayments including balloon payments over the next 12 months amounted to about $14.1 million (excluding the unamortized loan fees).”

Fourth Quarter 2021 Results:

For the fourth quarter of 2021, the Company reported total net revenues of $22.3 million representing a 248% increase over total net revenues of $6.4 million during the fourth quarter of 2020 which was the result of the increased average time charter equivalent rate our vessels earned and the higher number of vessels operating in the fourth quarter of 2021 compared to the same period of 2020. The Company reported a net income for the period of $16.0 million and a net income attributable to common shareholders of $15.2 million, as compared to a net loss of $0.3 million and a net loss attributable to common shareholders of $0.7 million for the same period of 2020. For the fourth quarter of 2021, voyage expenses, net amounted to income of $0.2 million resulting from gain on bunkers as compared to voyage expenses of $0.1 million in the same period of 2020. Vessel operating expenses were $3.7 million for the fourth quarter of 2021 as compared to $2.9 million for the same period of 2020. The increase is mainly attributable to the increased number of vessels operating in the fourth quarter of 2021 compared to the corresponding period in 2020. Depreciation expenses for the fourth quarter of 2021 amounted to $2.3 million, as compared to $1.7 million for the same period of 2020. This increase is due to the higher number of vessels operating in the fourth quarter of 2021 as compared to the same period of 2020. General and administrative expenses increased to $0.9 million in the fourth quarter of 2021, as compared to $0.6 million in the fourth quarter of 2020 due to higher legal and insurance expenses.

Interest and other financing costs for the fourth quarter of 2021 increased to $0.7 million as compared to $0.5 million for the same period of 2020. The increase is mainly due to the higher average outstanding debt of the period compared to the same period of 2020. For the three months ended December 31, 2021, the Company recognized a gain on four interest rate swaps of $0.2 million and a realized gain on FFA contracts of $1.4 million, as compared to a marginal loss on three interest rate swaps and a marginal gain on FFA contracts for the same period of 2020.

On average, 9.0 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,157 per day compared to 7.0 vessels in the same period of 2020 earning on average $10,761 per day.

Adjusted EBITDA for the fourth quarter of 2021 was $16.0 million compared to $1.8 million achieved during the fourth quarter of 2020.

Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2021 was $5.38 calculated on 2,827,316 basic and $5.32 calculated on 2,860,357 diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.31 for the fourth quarter of 2020, calculated on 2,285,601 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the quarter of the change in fair value of derivatives, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2021 would have been $4.34 and $4.29 per share basic and diluted, respectively, compared to adjusted loss of $0.34 per share basic and diluted for the quarter ended December 31, 2020. Usually, security analysts do not include the above item in their published estimates of earnings per share.

Full Year 2021 Results:

For the full year of 2021, the Company reported total net revenues of $64.4 million representing a 189% increase over total net revenues of $22.3 million during the twelve months of 2020, as a result of the increased average time charter equivalent rate our vessels earned in the twelve months of 2021 compared to the same period of 2020. The Company reported a net income for the period of $31.2 million and a net income attributable to common shareholders of $29.4 million, as compared to a net loss for the period of $5.9 million and a net loss attributable to common shareholders of $7.5 million, for the twelve months of 2020. For the twelve months of 2021, voyage expenses, net amounted to income of $0.8 million resulting from gain on bunkers as compared to voyage expenses of $0.3 million in the same period of 2020. Vessel operating expenses were $13.6 million for the twelve months of 2021 as compared to $11.6 million for the same period of 2020. The increase is attributable to the increased number of vessels operating in 2021 compared to the corresponding period in 2020, as well as to the increased crewing costs for our vessels compared to the same period of 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions, and the increase in hull and machinery insurance premiums. Depreciation expenses for the twelve months of 2021 were $7.7 million compared to $6.6 million during the same period of 2020, mainly due to the increase in the cost base of certain of our vessels due to the recent installation of ballast water management systems and the higher number of vessels operating in the same period.

On average, 7.9 vessels were owned and operated during the twelve months of 2021 earning an average time charter equivalent rate of $24,222 per day compared to 7.0 vessels in the same period of 2020 earning on average $9,387 per day. In the twelve months of 2020, three vessels underwent special survey for a total cost of $2.3 million, while there were no vessels undergoing drydocking in the twelve months of 2021. General and administrative expenses increased to $2.6 million during the twelve months of 2021 as compared to $2.3 million in the last year due to higher legal and insurance expenses.

Interest and other financing costs for the twelve months of 2021 remained unchanged at $2.3 million compared to the same period of 2020. For the twelve months ended December 31, 2021, the Company recognized a $0.3 million gain on four interest rate swaps and a $4.1 million realized loss on FFA contracts as compared to a loss on derivatives of $0.8 million for the same period of 2020, comprising of a $0.3 million loss on FFA contracts and a $0.5 million loss on three interest rate swaps. For the twelve months ended December 31, 2021, loss on debt extinguishment was $1.6 million and related to the conversion of part of our related party loan, amounting to $3.3 million, into common shares of the Company. The difference between the share price less the conversion price was reflected in loss on debt extinguishment. No such case existed in 2020.

Adjusted EBITDA for the twelve months of 2021 was $42.3 million compared to $3.7 million achieved during the twelve months of 2020.

Basic and diluted earnings per share attributable to common shareholders for the twelve months of 2021 was $11.63, calculated on 2,528,507 basic and $11.53, calculated on 2,548,950 diluted weighted average number of shares outstanding compared to basic and diluted loss of $3.28 per share for the twelve months of 2020, calculated on 2,275,062 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the earnings attributable to common shareholders for the year of the change in fair value of derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the year ended December 31, 2021 would have been $11.98 and $11.88 per share basic and diluted, respectively, compared to an adjusted loss of $3.04 per share basic and diluted for 2020. As previously mentioned, usually, security analysts do not include the above item in their published estimates of earnings per share.

Fleet Profile:

The EuroDry Ltd. fleet profile is as follows:

Note:  
(*) Represents the earliest redelivery date
(**) BPI stands for the Baltic Panamax Index; the average BPI 4TC is an index based on four time charter routes. 
(***) The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.

Summary Fleet Data:

(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 total number of days in a period during which each vessel in our fleet was in our possession net of scheduled off-hire days incl. 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, or TCE, is a measure of the average daily net 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 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, pool agreements 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) Daily vessel operating expenses, which include 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. Drydocking expenses are reported separately.

(13) Daily general and administrative expense is calculated 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. TVOE is the sum of vessel operating expenses, 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) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method divided by the fleet calendar days for the relevant period. 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:
Tomorrow, February 10, 2022 at 10:00 a.m. Eastern Time, the Company’s management will host a conference call and webcast to discuss the results. 

Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238- 0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “EuroDry” to the operator. 

Audio webcast – Slides Presentation:
There will be a live and then archived webcast of the conference call and accompanying slides, available through the Company’s website. To listen to the archived audio file, visit our website http://www.eurodry.gr  and click on Company Presentations under our Investor Relations page. 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 Fourth Quarter 2021 results in PDF format will also be available 10 minutes prior to the conference call and webcast accessible on the company’s website (www.eurodry.gr) on the webcast page. Participants to the webcast can download the PDF presentation. 

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)

EuroDry Ltd.
Reconciliation of Adjusted EBITDA to Net (loss) / income to
(All amounts expressed in U.S. Dollars)

Adjusted EBITDA Reconciliation:
EuroDry Ltd. considers Adjusted EBITDA to represent net (loss) / income before interest, income taxes, depreciation, unrealized loss on Forward Freight Agreements (FFAs) and loss / (gain) on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net (loss) / 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, financial costs, unrealized loss / (gain) on FFAs and loss / (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. 

EuroDry Ltd.
Reconciliation of Net (loss) / income to Adjusted net (loss) / income
(All amounts expressed in U.S. Dollars – except share data and number of shares)

Adjusted net (loss) / income and Adjusted (loss) / earnings per share Reconciliation:

EuroDry Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized (gain) / loss on derivatives which include FFAs and interest rate swaps, and loss on debt extinguishment. Adjusted net (loss) / income and Adjusted (loss) / earnings per share is included herein because we believe it assists 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 unrealized (gain) / loss on derivatives and loss on debt extinguishment, which may significantly affect results of operations between periods. Adjusted net (loss) / income and Adjusted (loss) / earnings per share do not represent and should not be considered as an alternative to net (loss) / income or (loss) / earnings per share, as determined by GAAP. The Company’s definition of Adjusted net (loss) / income and Adjusted (loss) / earnings per share may not be the same as that used by other companies in the shipping or other industries.

About EuroDry Ltd.
EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands to consolidate the drybulk fleet of Euroseas Ltd into a separate listed public company. EuroDry was spun-off from Euroseas Ltd on May 30, 2018; it trades on the NASDAQ Capital Market under the ticker EDRY. 

EuroDry operates in the dry cargo, drybulk shipping market. EuroDry’s 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., which are responsible for the day-to-day commercial and technical management and operations of the vessels. EuroDry employs its vessels on spot and period charters.

The Company has a fleet of 10 vessels, including 5 Panamax drybulk carriers, 2 Ultramax drybulk carrier, 2 Kamsarmax drybulk carriers and one Supramax drybulk carrier. EuroDry’s 10 drybulk carriers have a total cargo capacity of 726,555 dwt.

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, 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.eurodry.gr

EuroDry Ltd. Reports Results for the Year and Quarter Ended December 31, 2021

News and Market Data on EuroDry Ltd.

 

ATHENS, Greece, Feb. 09, 2022 (GLOBE NEWSWIRE) — EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three- and twelve-month periods ended December 31, 2021.  

Fourth Quarter 2021 Highlights:

• Total net revenues of $22.3 million.
  
  
• Net income attributable to common shareholders of $15.2 million or $5.38 and $5.32 earnings per share basic and diluted, respectively, inclusive of unrealized gain on derivatives.
  
  
• Adjusted net income attributable to common shareholders¹ for the quarter of $12.3 million, or, $4.34 and $4.29 per share basic and diluted, respectively. The adjusted net income attributable to common shareholders includes a $0.5m non-cash charge for a “Preferred deemed dividend” resulting from the redemption of the Company’s Series B Preferred Shares.
  
  
• Adjusted EBITDA¹ was $16.0 million.
  
  
• An average of 9.0 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,157 per day.
  
  
• The Company declared a dividend of $0.2 million on its Series B Preferred Shares. The dividend was paid in cash. In addition, as previously announced, in December 2021 the Company redeemed all of its outstanding Series B Preferred Shares at par amounting to $13.6 million.
  

_{¹Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s 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.}

Full Year 2021 Highlights:

• Total net revenues of $64.4 million.
  
  
• Net income attributable to common shareholders of $29.4 million, or $11.63 and $11.53 earnings per share basic and diluted, respectively, inclusive of unrealized loss on derivatives and a loss on debt extinguishment.
  
  
• Adjusted net income attributable to common shareholders¹ for the period was $30.3 million or $11.98 and $11.88 adjusted earnings per share basic and diluted, respectively. The adjusted net income attributable to common shareholders includes a $0.7m non-cash charge for a “Preferred deemed dividend” resulting from the redemption of the Company’s Series B Preferred Shares.
  
  
• Adjusted EBITDA¹ was $42.3 million.
  
  
• An average of 7.9 vessels were owned and operated during the twelve months of 2021 earning an average time charter equivalent rate of $24,222 per day.
  

Recent developments

In January 2022, the Company acquired M/V Molyvos Luck, a 57,924 dwt drybulk vessel built in 2014, for $21.2 million. The vessel was majority owned by a third party and has been managed by Eurobulk Ltd., also the manager of the majority of the Company’s vessels. The vessel will be delivered to the Company around the middle of February 2022.The Company will also assume the existing charter of the vessel at $13,250/day until April 2022. The acquisition will be initially financed by the Company’s own funds; a bank loan will be arranged to partly finance the acquisition, using the acquired vessel as collateral.

Aristides Pittas, Chairman and CEO of EuroDry commented:

“We are pleased to report that, in the fourth quarter of 2021, we took advantage of the market levels registering our best quarter on record with more than $15m of net income. We also redeemed all our outstanding Series B Preferred shares reducing our cost of capital and increasing earnings to our common shareholders in 2022 and beyond.

“During the quarter, drybulk spot earnings, after peaking in October 2021 when they registered their highest level since early 2010, subsequently retreated by about 35% in November and December, while in January 2022 they retreated by approximately another 30%; at the same time, after initially retreating too, one-year time rates recovered during December 2021 and January 2022 suggesting that there are expectations amongst the market participants that the spot earnings’ retreat, a cyclically common effect during the first couple of months of every year, is only temporary. Even at their present levels though, spot earnings are at high levels relative to the last decade.

“Despite the market strength during 2021, the orderbook remained at historically low levels. This suggests minimal fleet growth over the next 2-3 years, likely, leading to higher rates in the rest of 2022 if trade increases even at just historically average levels. Within this framework of expectations, we have expanded our fleet acquiring our tenth vessel, M/V Molyvos Luck, which will further position us to take advantage of expected market increases.

“Overall, we are committed to continue growing EuroDry focusing on the middle size range of drybulk carriers. Our increased liquidity and low leverage ratio provide us with significant firepower to pursue our strategy.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the fourth quarter of 2021 increased significantly compared to the same period of 2020 as a result of the time charter equivalent rates our vessels earned during the quarter which were higher by 171% compared to the average time charter equivalent rates our vessels earned in the fourth quarter of 2020.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,324 per vessel per day during the fourth quarter of 2021 as compared to $6,258 per vessel per day for the same quarter of last year, and $6,456 per vessel per day for the entire year of 2021 as compared to $6,211 per vessel per day for the same period of 2020. This increase is mainly due to increased crewing costs in 2021 compared to 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions.

“Adjusted EBITDA during the fourth quarter of 2021 was $16.0 million versus $1.8 million in the fourth quarter of last year. As of December 31, 2021, our outstanding debt (excluding the unamortized loan fees) was $79.4 million, while unrestricted and restricted cash was $29.5 million. As of the same date, our scheduled debt repayments including balloon payments over the next 12 months amounted to about $14.1 million (excluding the unamortized loan fees).”

Fourth Quarter 2021 Results:

For the fourth quarter of 2021, the Company reported total net revenues of $22.3 million representing a 248% increase over total net revenues of $6.4 million during the fourth quarter of 2020 which was the result of the increased average time charter equivalent rate our vessels earned and the higher number of vessels operating in the fourth quarter of 2021 compared to the same period of 2020. The Company reported a net income for the period of $16.0 million and a net income attributable to common shareholders of $15.2 million, as compared to a net loss of $0.3 million and a net loss attributable to common shareholders of $0.7 million for the same period of 2020. For the fourth quarter of 2021, voyage expenses, net amounted to income of $0.2 million resulting from gain on bunkers as compared to voyage expenses of $0.1 million in the same period of 2020. Vessel operating expenses were $3.7 million for the fourth quarter of 2021 as compared to $2.9 million for the same period of 2020. The increase is mainly attributable to the increased number of vessels operating in the fourth quarter of 2021 compared to the corresponding period in 2020. Depreciation expenses for the fourth quarter of 2021 amounted to $2.3 million, as compared to $1.7 million for the same period of 2020. This increase is due to the higher number of vessels operating in the fourth quarter of 2021 as compared to the same period of 2020. General and administrative expenses increased to $0.9 million in the fourth quarter of 2021, as compared to $0.6 million in the fourth quarter of 2020 due to higher legal and insurance expenses.

Interest and other financing costs for the fourth quarter of 2021 increased to $0.7 million as compared to $0.5 million for the same period of 2020. The increase is mainly due to the higher average outstanding debt of the period compared to the same period of 2020. For the three months ended December 31, 2021, the Company recognized a gain on four interest rate swaps of $0.2 million and a realized gain on FFA contracts of $1.4 million, as compared to a marginal loss on three interest rate swaps and a marginal gain on FFA contracts for the same period of 2020.

On average, 9.0 vessels were owned and operated during the fourth quarter of 2021 earning an average time charter equivalent rate of $29,157 per day compared to 7.0 vessels in the same period of 2020 earning on average $10,761 per day.

Adjusted EBITDA for the fourth quarter of 2021 was $16.0 million compared to $1.8 million achieved during the fourth quarter of 2020.

Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2021 was $5.38 calculated on 2,827,316 basic and $5.32 calculated on 2,860,357 diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.31 for the fourth quarter of 2020, calculated on 2,285,601 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the quarter of the change in fair value of derivatives, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2021 would have been $4.34 and $4.29 per share basic and diluted, respectively, compared to adjusted loss of $0.34 per share basic and diluted for the quarter ended December 31, 2020. Usually, security analysts do not include the above item in their published estimates of earnings per share.

Full Year 2021 Results:

For the full year of 2021, the Company reported total net revenues of $64.4 million representing a 189% increase over total net revenues of $22.3 million during the twelve months of 2020, as a result of the increased average time charter equivalent rate our vessels earned in the twelve months of 2021 compared to the same period of 2020. The Company reported a net income for the period of $31.2 million and a net income attributable to common shareholders of $29.4 million, as compared to a net loss for the period of $5.9 million and a net loss attributable to common shareholders of $7.5 million, for the twelve months of 2020. For the twelve months of 2021, voyage expenses, net amounted to income of $0.8 million resulting from gain on bunkers as compared to voyage expenses of $0.3 million in the same period of 2020. Vessel operating expenses were $13.6 million for the twelve months of 2021 as compared to $11.6 million for the same period of 2020. The increase is attributable to the increased number of vessels operating in 2021 compared to the corresponding period in 2020, as well as to the increased crewing costs for our vessels compared to the same period of 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions, and the increase in hull and machinery insurance premiums. Depreciation expenses for the twelve months of 2021 were $7.7 million compared to $6.6 million during the same period of 2020, mainly due to the increase in the cost base of certain of our vessels due to the recent installation of ballast water management systems and the higher number of vessels operating in the same period.

On average, 7.9 vessels were owned and operated during the twelve months of 2021 earning an average time charter equivalent rate of $24,222 per day compared to 7.0 vessels in the same period of 2020 earning on average $9,387 per day. In the twelve months of 2020, three vessels underwent special survey for a total cost of $2.3 million, while there were no vessels undergoing drydocking in the twelve months of 2021. General and administrative expenses increased to $2.6 million during the twelve months of 2021 as compared to $2.3 million in the last year due to higher legal and insurance expenses.

Interest and other financing costs for the twelve months of 2021 remained unchanged at $2.3 million compared to the same period of 2020. For the twelve months ended December 31, 2021, the Company recognized a $0.3 million gain on four interest rate swaps and a $4.1 million realized loss on FFA contracts as compared to a loss on derivatives of $0.8 million for the same period of 2020, comprising of a $0.3 million loss on FFA contracts and a $0.5 million loss on three interest rate swaps. For the twelve months ended December 31, 2021, loss on debt extinguishment was $1.6 million and related to the conversion of part of our related party loan, amounting to $3.3 million, into common shares of the Company. The difference between the share price less the conversion price was reflected in loss on debt extinguishment. No such case existed in 2020.

Adjusted EBITDA for the twelve months of 2021 was $42.3 million compared to $3.7 million achieved during the twelve months of 2020.

Basic and diluted earnings per share attributable to common shareholders for the twelve months of 2021 was $11.63, calculated on 2,528,507 basic and $11.53, calculated on 2,548,950 diluted weighted average number of shares outstanding compared to basic and diluted loss of $3.28 per share for the twelve months of 2020, calculated on 2,275,062 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the earnings attributable to common shareholders for the year of the change in fair value of derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the year ended December 31, 2021 would have been $11.98 and $11.88 per share basic and diluted, respectively, compared to an adjusted loss of $3.04 per share basic and diluted for 2020. As previously mentioned, usually, security analysts do not include the above item in their published estimates of earnings per share.

Fleet Profile:

The EuroDry Ltd. fleet profile is as follows:

Note:  
(*) Represents the earliest redelivery date
(**) BPI stands for the Baltic Panamax Index; the average BPI 4TC is an index based on four time charter routes. 
(***) The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.

Summary Fleet Data:

(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 total number of days in a period during which each vessel in our fleet was in our possession net of scheduled off-hire days incl. 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, or TCE, is a measure of the average daily net 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 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, pool agreements 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) Daily vessel operating expenses, which include 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. Drydocking expenses are reported separately.

(13) Daily general and administrative expense is calculated 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. TVOE is the sum of vessel operating expenses, 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) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method divided by the fleet calendar days for the relevant period. 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:
Tomorrow, February 10, 2022 at 10:00 a.m. Eastern Time, the Company’s management will host a conference call and webcast to discuss the results. 

Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238- 0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “EuroDry” to the operator. 

Audio webcast – Slides Presentation:
There will be a live and then archived webcast of the conference call and accompanying slides, available through the Company’s website. To listen to the archived audio file, visit our website http://www.eurodry.gr  and click on Company Presentations under our Investor Relations page. 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 Fourth Quarter 2021 results in PDF format will also be available 10 minutes prior to the conference call and webcast accessible on the company’s website (www.eurodry.gr) on the webcast page. Participants to the webcast can download the PDF presentation. 

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)

EuroDry Ltd.
Reconciliation of Adjusted EBITDA to Net (loss) / income to
(All amounts expressed in U.S. Dollars)

Adjusted EBITDA Reconciliation:
EuroDry Ltd. considers Adjusted EBITDA to represent net (loss) / income before interest, income taxes, depreciation, unrealized loss on Forward Freight Agreements (FFAs) and loss / (gain) on interest rate swaps. Adjusted EBITDA does not represent and should not be considered as an alternative to net (loss) / 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, financial costs, unrealized loss / (gain) on FFAs and loss / (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. 

EuroDry Ltd.
Reconciliation of Net (loss) / income to Adjusted net (loss) / income
(All amounts expressed in U.S. Dollars – except share data and number of shares)

Adjusted net (loss) / income and Adjusted (loss) / earnings per share Reconciliation:

EuroDry Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized (gain) / loss on derivatives which include FFAs and interest rate swaps, and loss on debt extinguishment. Adjusted net (loss) / income and Adjusted (loss) / earnings per share is included herein because we believe it assists 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 unrealized (gain) / loss on derivatives and loss on debt extinguishment, which may significantly affect results of operations between periods. Adjusted net (loss) / income and Adjusted (loss) / earnings per share do not represent and should not be considered as an alternative to net (loss) / income or (loss) / earnings per share, as determined by GAAP. The Company’s definition of Adjusted net (loss) / income and Adjusted (loss) / earnings per share may not be the same as that used by other companies in the shipping or other industries.

About EuroDry Ltd.
EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands to consolidate the drybulk fleet of Euroseas Ltd into a separate listed public company. EuroDry was spun-off from Euroseas Ltd on May 30, 2018; it trades on the NASDAQ Capital Market under the ticker EDRY. 

EuroDry operates in the dry cargo, drybulk shipping market. EuroDry’s 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., which are responsible for the day-to-day commercial and technical management and operations of the vessels. EuroDry employs its vessels on spot and period charters.

The Company has a fleet of 10 vessels, including 5 Panamax drybulk carriers, 2 Ultramax drybulk carrier, 2 Kamsarmax drybulk carriers and one Supramax drybulk carrier. EuroDry’s 10 drybulk carriers have a total cargo capacity of 726,555 dwt.

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, 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.eurodry.gr