Paragon Shipping Inc. Reports First Quarter 2013 Results

           Paragon Shipping Inc. Reports First Quarter 2013 Results

PR Newswire

ATHENS, Greece, April 25, 2013

ATHENS, Greece, April 25, 2013 /PRNewswire/ -- Paragon Shipping Inc. (NASDAQ:
PRGN) ("Paragon Shipping", or the "Company"), a global shipping transportation
company specializing in drybulk cargoes, announced today its results for the
three months ended March 31, 2013.

Financial Highlights

(Expressed in United States Dollars where applicable)
                                                 Quarter Ended  Quarter Ended

                                                 March 31, 2012 March 31, 2013
Average number of vessels                        10.0           12.7
Time charter equivalent rate (TCE) ^(1)          14,030         11,388
Net Revenue                                      12,477,186     13,453,362
EBITDA ^(1)                                      6,622,504      2,551,406
Adjusted EBITDA ^(1)                             7,036,584      3,182,438
Net Income / (Loss)                              719,837        (3,511,102)
Adjusted Net Income / (Loss) ^(1)                1,133,917      (2,880,070)
Earnings / (Loss) per common share basic and     0.12           (0.32)
diluted ^(2)
Adjusted Earnings / (Loss) per common share      0.19           (0.26)
basic and diluted ^(1),(2)



    Please see the table at the back of this release for a reconciliation of
    TCE to Time Charter Revenue, EBITDA and Adjusted EBITDA to Net Income /
    (Loss), Adjusted Net Income / (Loss) to Net Income / (Loss) and Adjusted
(1) Earnings / (Loss) per common share to Earnings / (Loss) per common share,
    the most directly comparable financial measures calculated and presented
    in accordance with generally accepted accounting principles in the United
    States ("U.S. GAAP").
    All per-share figures in this table and in our financial results reported
(2) below have been adjusted to give effect to the 10-for-1 reverse stock
    split that became effective on November 5, 2012.



Management Commentary
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive
Officer of Paragon Shipping, stated, "Year to date, the drybulk shipping
market continues to be challenging with weak charter rates, but we are finally
starting to see the light at the end of the tunnel as the orderbook has
declined dramatically and deliveries of newbuildings will slow down. For the
first quarter of 2013, we reported Adjusted EBITDA of $3.2 million and an
Adjusted Net Loss of $2.9 million, or $0.26 per share. On average, we operated
12.7 vessels with a utilization rate of close to 100%. On January 29, 2013, we
took delivery of the M/V Priceless Seas and we ended the quarter with a fleet
size of 13 vessels with an average age of 7.1 years."

Mr. Bodouroglou concluded, "Following the successful completion of our debt
restructuring, we have significantly reduced our debt amortization for the
next two years and have achieved relaxation of several of our financial and
security covenants. We believe that we have set the foundation for the Company
to emerge stronger when the drybulk market recovers."

First Quarter 2013 Financial Results
Gross time charter revenue for the first quarter of 2013 was $14.2 million,
compared to $13.2 million for the first quarter of 2012. The Company reported
a net loss of $3.5 million, or $0.32 per basic and diluted share, for the
first quarter of 2013, calculated based on 10,992,088 weighted average number
of basic and diluted shares outstanding for the period and reflecting the
impact of the non-cash items discussed below. For the first quarter of 2012,
the Company reported net income of $0.7 million, or $0.12 per basic and
diluted share, calculated based on 5,905,557 weighted average number of basic
and diluted shares.

Excluding all non-cash items described below, the adjusted net loss for the
first quarter of 2013 was $2.9 million, or $0.26 per basic and diluted share,
compared to adjusted net income of $1.1 million, or $0.19 per basic and
diluted share, for the first quarter of 2012.

EBITDA for the first quarter of 2013 was $2.6 million, compared to $6.6
million for the first quarter of 2012. EBITDA for the first quarter of 2013
was calculated by adding the net loss of $3.5 million to net interest expense,
including interest expense from interest rate swaps, and depreciation that in
the aggregate amounted to $6.1 million. Adjusted EBITDA, excluding all
non-cash items described below, was $3.2 million for the first quarter of
2013, compared to $7.0 million for the first quarter of 2012.

The Company operated an average of 12.7 vessels during the first quarter of
2013, earning an average TCE rate of $11,388 per day, compared to an average
of 10.0 vessels during the first quarter of 2012, earning an average TCE rate
of $14,030 per day.

Total adjusted operating expenses for the first quarter of 2013 equaled $10.2
million, or approximately $8,916 per vessel per day, which include vessel
operating expenses, management fees, general and administrative expenses and
dry-docking costs, and exclude share-based compensation for the period of $0.5
million. For the first quarter of 2012, total adjusted operating expenses were
$6.6 million, or approximately $7,298 per vessel per day, which include the
items mentioned above, and exclude share-based compensation of $0.8 million.

As of March 31, 2013, the Company owned approximately 13.8% of the outstanding
common stock of Box Ships Inc. (NYSE:TEU) ("Box Ships"), a former wholly-owned
subsidiary of the Company which successfully completed its initial public
offering in April 2011. The investment in Box Ships is accounted for under the
equity method and is separately reflected on the Company's unaudited condensed
consolidated balance sheets. For the first quarter of 2013, the Company
recorded income of $0.6 million, representing its share of Box Ships' net
income for the period, compared to $1.0 million for the first quarter of 2012.
In the first quarter of 2013, we received a cash amount of $0.8 million,
representing dividend distributions from Box Ships, compared to $1.0 million
received in the first quarter of 2012.

In the three months ended March 31, 2013, the Company recorded a non-cash loss
of $0.4 million relating to the dilution effect from the Company's
non-participation in the public offering by Box Ships of 4,000,000 of Box
Ships' common shares, which was completed on March 18, 2013.

First Quarter 2013 Non-cash Items
The Company's results for the three months ended March 31, 2013 included the
following non-cash items:

  oLoss on investment in affiliate of $0.4 million, or $0.04 per basic and
    diluted share.
  oAn unrealized gain on interest rate swaps of $0.2 million, or $0.02 per
    basic and diluted share.
  oNon-cash expenses of $0.5 million, or $0.04 per basic and diluted share,
    relating to share based compensation to the management company amounting
    to $0.3 million and to the amortization of the compensation cost
    recognized for non-vested share awards issued to executive officers,
    directors and employees amounting to $0.2 million.

In the aggregate, these non-cash items decreased the Company's earnings by
$0.6 million, which represents a $0.06 decrease in earnings per basic and
diluted share, for the three months ended March 31, 2013.

Cash Flows
For the three months ended March 31, 2013, the Company generated net cash from
operating activities of $0.3 million, compared to $3.9 million for the three
months ended March 31, 2012. For the three months ended March 31, 2013, net
cash used in investing activities was $0.6 million and net cash used in
financing activities was $3.7 million. For the three months ended March 31,
2012, net cash used in investing activities was $0.4 million and net cash used
in financing activities was $5.4 million.

Time Charter Coverage Update
Pursuant to our time chartering strategy, we mainly employ vessels under fixed
rate time charters for periods ranging from one to five years. Depending on
market conditions, we may decide to employ some of our vessels on short-term
voyage charters, which generally last for periods of ten days to four months,
to be in a position to take advantage of any strengthening of the spot market.

Assuming all charter counterparties fully perform under the terms of the
charters, based on the earliest redelivery dates  and including our
newbuilding vessels, we have secured employment for 49% and 7% of our fleet
capacity for the remainder of 2013 and full year 2014, respectively.

Transfer Listing to NASDAQ Global Market ("NASDAQ")
On April 19, 2013, the Company's common stock commenced trading on NASDAQ
under the same symbol, "PRGN". The Company voluntarily transferred the listing
of its common stock to NASDAQ from the New York Stock Exchange in order to
achieve greater long-term flexibility and cost efficiency.

Conference Call and Webcast details
The Company's management team will host a conference call to discuss its first
quarter 2013 results on Friday, April 26, 2013 at 9:00 am Eastern Time.

Participants should dial into the call ten minutes before the scheduled time
using the following numbers 1-877-317-6789 (USA) or +1-412-317-6789
(international) to access the call. A replay of the conference call will be
available for seven days and can be accessed by dialing 1-877-870-5176 (USA)
or +1-858-384-5517 (international) and using passcode 10028131.

Slides and audio webcast
There will also be a simultaneous live webcast through the Company's website,
www.paragonship.com. Participants should register on the website approximately
ten minutes prior to the start of the webcast. If you would like a copy of the
release mailed or faxed, please contact Allen & Caron Investor Relations at
212-691-8087.

About Paragon Shipping Inc.
Paragon Shipping is an international shipping company incorporated under the
laws of the Republic of the Marshall Islands with executive offices in Athens,
Greece, specializing in the transportation of drybulk cargoes. The Company's
current fleet consists of thirteen drybulk vessels with a total carrying
capacity of 816,472 dwt. In addition, the Company's current newbuilding
program consists of one Handysize drybulk carrier that is scheduled to be
delivered in the fourth quarter of 2013 and two 4,800 TEU containerships that
are scheduled to be delivered in 2014. Paragon Shipping has granted Box Ships
Inc., an affiliated company, the option to acquire its two containerships
under construction. For more information, visit: www.paragonship.com. The
information contained on the Company's website does not constitute part of
this press release.

Forward-Looking Statements
Certain statements in this press release are "forward-looking statements"
within the meaning of the Private Securities Litigation Act of 1995. These
forward-looking statements are based on our current expectations and beliefs
and are subject to a number of risk factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. Such risks and uncertainties include, without
limitation, the strength of world economies and currencies, general market
conditions, including fluctuations in charter rates and vessel values, changes
in demand for drybulk shipping capacity, changes in our operating expenses,
including bunker prices, dry-docking and insurance costs, the market for our
vessels, availability of financing and refinancing, charter counterparty
performance, ability to obtain financing and comply with covenants in such
financing arrangements, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hires and other factors, as well as
other risks that have been included in filings with the Securities and
Exchange Commission, all of which are available at www.sec.gov.

Contacts:

Paragon Shipping Inc.
Robert Perri, CFA
Chief Financial Officer
ir@paragonshipping.gr

Allen & Caron Inc.
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087

Len Hall (Media)
len@allencaron.com
(949) 474-4300

- Tables Follow -



Fleet List

Drybulk Fleet

The following tables represent our drybulk fleet and the drybulk newbuilding
vessels that we have agreed to acquire as of April 25, 2013.

Operating Drybulk Fleet
Name            Type      Dwt     Year Built
Panamax
Dream Seas      Panamax   75,151  2009
Coral Seas      Panamax   74,477  2006
Golden Seas     Panamax   74,475  2006
Pearl Seas      Panamax   74,483  2006
Diamond Seas    Panamax   74,274  2001
Deep Seas       Panamax   72,891  1999
Calm Seas       Panamax   74,047  1999
Kind Seas       Panamax   72,493  1999
Total Panamax   8         592,291
Supramax
Friendly Seas   Supramax  58,779  2008
Sapphire Seas   Supramax  53,702  2005
Total Supramax  2         112,481
Handysize
Prosperous Seas Handysize 37,293  2012
Precious Seas   Handysize 37,205  2012
Priceless Seas  Handysize 37,202  2013
Total Handysize 3         111,700
Grand Total     13        816,472



Drybulk Newbuildings that we have agreed to acquire
Hull no.         Type      Dwt    Expected Delivery
Handysize
Hull no. 625     Handysize 37,200 Q4 2013
Total Handysize  1         37,200



Containership Fleet

The following table represents the containership newbuilding vessels that we
have agreed to acquire as of April 25, 2013.

Containership Newbuildings that we have agreed to acquire
Hull no.            TEU     Dwt       Expected Delivery
Hull no. 656 ^(1)   4,800   56,500    Q2 2014
Hull no. 657 ^(1)   4,800   56,500    Q2 2014
Total               9,600   113,000

(1) The Company has granted to Box Ships an option to purchase.



Summary Fleet Data

(Expressed in United States Dollars where applicable)
                                                 Quarter Ended  Quarter Ended

                                                 March 31, 2012 March 31, 2013
FLEET DATA
Average number of vessels (1)                    10.0           12.7
Calendar days for fleet (2)                      910            1,142
Available days for fleet (3)                     910            1,125
Operating days for fleet (4)                     908            1,123
Fleet utilization (5)                            99.8%          99.8%
AVERAGE DAILY RESULTS
Time charter equivalent (6)                      14,030         11,388
Vessel operating expenses (7)                    4,734          4,449
Dry-docking expenses (8)                         -              413
Management fees - related party adjusted (9)     1,036          1,016
General and administrative expenses adjusted     1,528          3,038
(10)
Total vessel operating expenses adjusted (11)    7,298          8,916



     Average number of vessels is the number of vessels that constituted our
(1)  fleet for the relevant period, as measured by the sum of the number of
     calendar days each vessel was a part of our fleet during the period
     divided by the number of days in the period.
(2)  Calendar days for the fleet are the total days the vessels were in our
     possession for the relevant period.
     Available days for the fleet are the total calendar days for the relevant
(3)  period less any off-hire days associated with scheduled dry-dockings or
     special or intermediate surveys.
     Operating days for the fleet are the total available days for the
     relevant period less any off-hire days due to any reason, other than
(4)  scheduled dry-dockings or special or intermediate surveys, including
     unforeseen circumstances. Any idle days relating to the days a vessel
     remains unemployed are included in operating days.
     Fleet utilization is the percentage of time that our vessels were able to
(5)  generate revenues and is determined by dividing operating days by fleet
     available days for the relevant period.
     Time charter equivalent ("TCE") is a measure of the average daily revenue
     performance of a vessel on a per voyage basis. Our method of calculating
     TCE is consistent with industry standards and is determined by dividing
     Net Revenue generated from charters less voyage expenses by operating
     days for the relevant time period. Voyage expenses consist of all costs
     that are unique to a particular voyage, primarily including port
(6)  expenses, canal dues, war risk insurances and fuel costs, net of gains or
     losses from the sale of bunkers to charterers. TCE is a non-GAAP 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.
     Daily vessel operating expenses, which includes crew costs, provisions,
(7)  deck and engine stores, lubricating oil, insurance, maintenance and
     repairs, is calculated by dividing vessel operating expenses by fleet
     calendar days for the relevant time period.
(8)  Daily dry-docking expenses are calculated by dividing dry-docking
     expenses by fleet calendar days for the relevant time period.
     Daily management fees - related party adjusted are calculated by dividing
(9)  management fees charged by a related party, excluding share based
     compensation to the management company, by fleet calendar days for the
     relevant time period.
     Daily general and administrative expenses adjusted are calculated by
     dividing general and administrative expenses, excluding non-cash expenses
(10) relating to the amortization of the share based compensation cost for
     non-vested share awards, by fleet calendar days for the relevant time
     period.
     Total vessel operating expenses ("TVOE") is a measurement of our total
     expenses associated with operating our vessels. TVOE is the sum of vessel
     operating expenses, dry-docking expenses, management fees and general and
(11) administrative expenses. Daily TVOE adjusted is calculated by dividing
     TVOE, excluding non-cash expenses relating to the amortization of the
     share based compensation cost for non-vested share awards and share based
     compensation to the management company, by fleet calendar days for the
     relevant time period.



Time Charter Equivalents Reconciliation

(Expressed in United States Dollars where applicable)
                                    Quarter Ended  Quarter Ended

                                    March 31, 2012 March 31, 2013
Time Charter Revenue                13,193,931     14,225,317
Commissions                         (716,745)      (771,955)
Voyage Expenses, net                (262,048)      664,663
Net Revenue, net of voyage expenses 12,739,234     12,788,699
Total operating days                908            1,123
Time Charter Equivalent             14,030         11,388



Condensed Cash Flow Information (Unaudited)

(Expressed in United States Dollars)
                                          Quarter Ended  Quarter Ended

                                          March 31, 2012 March 31, 2013
Cash and Cash Equivalents,
                                          14,563,517     17,676,885
beginning of period
Cash generated from / (used in):
Operating Activities                      3,891,195      261,258
Investing Activities                      (429,484)      (619,849)
Financing Activities                      (5,385,558)    (3,721,645)
Net decrease in Cash and Cash Equivalents (1,923,847)    (4,080,236)
Cash and Cash Equivalents,
                                          12,639,670     13,596,649
end of period



Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial
Information



EBITDA and Adjusted EBITDA Reconciliation (1)

(Expressed in United States Dollars)
                                                 Quarter Ended  Quarter Ended

                                                 March 31, 2012 March 31, 2013
Net Income / (Loss)                              719,837        (3,511,102)
Plus Net interest expense, including interest    2,015,802      1,928,170
expense from interest rate swaps
Plus Depreciation                                3,886,865      4,134,338
EBITDA                                           6,622,504      2,551,406
Adjusted EBITDA Reconciliation
Net Income / (Loss)                              719,837        (3,511,102)
Loss on investment in affiliate                  -              390,821
Unrealized gain on interest rate swaps           (381,934)      (237,599)
Non-cash expenses from the amortization of share
based compensation cost recognized and share     796,014        477,810
based compensation to the management company
Adjusted Net Income / (Loss)                     1,133,917      (2,880,070)
Plus Net interest expense, including interest    2,015,802      1,928,170
expense from swaps
Plus Depreciation, adjusted                      3,886,865      4,134,338
Adjusted EBITDA                                  7,036,584      3,182,438



    The Company considers EBITDA to represent Net Income / (Loss) plus net
    interest expense, including interest expense from interest rate swaps, and
    depreciation and amortization. The Company's management uses EBITDA and
    Adjusted EBITDA as a performance measure. EBITDA and Adjusted EBITDA are
    not items recognized by U.S. GAAP and should not be considered as an
    alternative to Net Income / (Loss), Operating Income / (Loss) or any other
    indicator of a Company's operating performance required by U.S. GAAP. The
(1) Company's definition of EBITDA and Adjusted EBITDA may not be the same as
    that used by other companies in the shipping or other industries. The
    Company believes that EBITDA is useful to investors because the shipping
    industry is capital intensive and may involve significant financing costs.
    The Company excluded non-cash items to derive the Adjusted Net Income /
    (Loss) and the Adjusted EBITDA because the Company believes that these
    adjustments provide additional information on the fleet operational
    results.



Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial
Information



Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share
Reconciliation

(Expressed in United States Dollars - except for share data)
                                                 Quarter Ended  Quarter Ended
U.S. GAAP Financial Information
                                                 March 31, 2012 March 31, 2013
Net Income / (Loss)                              719,837        (3,511,102)
Net Income / (Loss) attributable to non-vested   22,622         (45,610)
share awards
Net Income / (Loss) available to common          697,215        (3,465,492)
shareholders
Weighted average number of common shares basic   5,905,557      10,992,088
and diluted (2)
Earnings / (Loss) per common share basic and     0.12           (0.32)
diluted (2)
Reconciliation of Net Income / (Loss) to
Adjusted Net Income / (Loss)
Net Income / (Loss)                              719,837        (3,511,102)
Loss on investment in affiliate                  -              390,821
Unrealized gain on interest rate swaps           (381,934)      (237,599)
Non-cash expenses from the amortization of share
based compensation cost recognized and share     796,014        477,810
based compensation to the management company
Adjusted Net Income / (Loss) (1)                 1,133,917      (2,880,070)
Adjusted Net Income / (Loss) attributable to     35,635         (37,413)
non-vested share awards
Adjusted Net Income / (Loss) available to common 1,098,282      (2,842,657)
shareholders
Weighted average number of common shares basic   5,905,557      10,992,088
and diluted (2)
Adjusted Earnings / (Loss) per common share      0.19           (0.26)
basic and diluted (1), (2)



    Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common
    share are not items recognized by U.S. GAAP and should not be considered
    as alternatives to Net Income / (Loss) and Earnings / (Loss) per common
    share, respectively, or any other indicator of a Company's operating
    performance required by U.S. GAAP. The Company excluded non-cash items to
(1) derive at the Adjusted Net Income / (Loss) and the Adjusted Earnings /
    (Loss) per common share basic and diluted because the Company believes
    that these adjustments provide additional information on the fleet
    operational results. The Company's definition of Adjusted Net Income /
    (Loss) and Adjusted Earnings / (Loss) per common share may not be the same
    as that used by other companies in the shipping or other industries.
(2) Adjusted to give effect to the 10-for-1 reverse stock split that became
    effective on November 5, 2012.



Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2012 and March 31, 2013
(Expressed in United States Dollars)
                                             December 31, 2012  March 31, 2013
Assets
Cash and restricted cash (current and        27,686,885         23,606,649
non-current)
Other current assets                         7,231,319          7,459,388
Vessels, net                                 298,376,440        318,860,096
Advances for vessel acquisitions and         49,592,684         26,841,169
vessels under construction
Other fixed assets, net                      497,619            483,317
Investment in equity affiliate               19,987,743         19,424,630
Loan to affiliate                            14,000,000         13,000,000
Other non-current assets                     2,602,212          2,547,646
Total Assets                                 419,974,902        412,222,895
Liabilities and Shareholders' Equity
Total debt                                   195,542,176        191,935,364
Total other liabilities                      8,912,213          7,605,808
Total shareholders' equity                   215,520,513        212,681,723
Total Liabilities and Shareholders' Equity   419,974,902        412,222,895



Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income / (Loss)
For the three months ended March 31, 2012 and 2013
(Expressed in United States Dollars - except for share data)
                                        Three Months Ended  Three Months Ended
                                        March 31, 2012      March 31, 2013
Revenue
Time charter revenue                   13,193,931          14,225,317
Commissions                            (716,745)           (771,955)
Net Revenue                             12,477,186          13,453,362
Expenses / (Income)
Voyage expenses, net                    (262,048)           664,663
Vessels operating expenses             4,308,221           5,080,694
Dry-docking expenses                    -                   471,124
Management fees - related party        943,175             1,495,661
Depreciation                            3,886,865           4,134,338
General and administrative expenses    2,186,053           3,611,036
Bad debt provisions                     -                   17,166
Operating Income / (Loss)               1,414,920           (2,021,320)
Other Income / (Expenses)
Interest and finance costs              (1,528,559)         (1,901,510)
Loss on derivatives, net                (299,894)           (15,007)
Interest income                         194,585             225,946
Equity in net income of affiliate       981,331             568,519
Loss on investment in affiliate         -                   (390,821)
Foreign currency (loss) / gain          (42,546)            23,091
Total Other Expenses, net               (695,083)           (1,489,782)
Net Income / (Loss)                     719,837             (3,511,102)
Other Comprehensive (Loss) / Income
Unrealized (loss) / gain on cash flow   (81,044)            2,920
hedges
Transfer of realized loss on cash flow  -                   76,550
hedges to earnings
Equity in other comprehensive income    -                   15,439
of affiliate
Unrealized gain on change in fair       -                   123,122
value of marketable securities
Total Other Comprehensive (Loss) /      (81,044)            218,031
Income
Comprehensive Income / (Loss)           638,793             (3,293,071)
Earnings / (Loss) per Class A common    $ 0.12              ($0.32)
share, basic and diluted (1)
Weighted average number of Class A      5,905,557           10,992,088
common shares, basic and diluted (1)

(1) Adjusted to give effect to the 10-for-1 reverse stock split that became
    effective on November 5, 2012.



SOURCE Paragon Shipping Inc.

Website: http://www.paragonship.com