Euroseas Ltd. Reports Results for the Year and Quarter Ended December 31, 2013 and Announces Acquisition of Panamax Drybulk

Euroseas Ltd. Reports Results for the Year and Quarter Ended December 31, 2013 
and Announces Acquisition of Panamax Drybulk Vessel 
MAROUSSI, ATHENS, GREECE -- (Marketwired) -- 02/20/14 --  Euroseas
Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container
carrier vessels and provider of seaborne transportation for drybulk
and containerized cargoes, announced today its results for the three
month period and full year ended December 31, 2013. 
Fourth Quarter 2013 Highlights: 


 
--  Net loss of $86.1 million or $1.89 loss per share basic and diluted on
    total net revenues of $9.7 million. The results include a $78.2
    million impairment loss, or $1.71 loss per share basic and diluted.
    Adjusted net loss(1) for the period would have been $7.8 million or
    $0.17 loss per share basic and diluted.
    
    
--  Adjusted EBITDA(1) was ($0.1) million.
    
    
--  An average of 14.00 vessels were owned and operated during the fourth
    quarter of 2013 earning an average time charter equivalent rate of
    $7,923 per day.
    
    
--  Effective October 1, 2013, the Company changed its estimate of the
    useful life of its containerships to 25 years from 30 years. The
    effect of this change of estimates added $3.4 million to the Company's
    depreciation expenses during the fourth quarter of 2013, or, $0.08
    loss per share, basic and diluted. In addition, as of December 31,
    2013, the Company determined that the book values of nine of its
    containerships were not recoverable and, thus, a non-cash impairment
    loss of $78.2 million, or $1.71 loss per share basic and diluted, was
    recorded. The Company believes that the book values of its ships,
    following the impairment charge, provide a better estimation of the
    current values of its vessels. Taken together, the above two factors
    increased the Company's loss for the fourth quarter by $1.79 per
    share, basic and diluted. The Company's loss per share, with a
    depreciation similar to the one taken in the third quarter and
    excluding the impairment loss, would have been $0.10 per share, basic
    and diluted.

  
Full year 2013 Highlights: 


 
--  Net loss of $103.4 million, or, $2.28 net loss per share basic and
    diluted on total net revenues of $39.2 million. The full year results
    include a $78.2 million impairment loss, or, $1.72 loss per share
    basic and diluted. Adjusted net loss(1) for the period would have been
    $23.1 million or $0.51 net loss per share basic and diluted.
    
    
--  Adjusted EBITDA(1) was $(1.7) million.
    
    
--  An average of 14.56 vessels were owned and operated during the twelve
    months of 2013 earning an average time charter equivalent rate of
    $7,945 per day.

  
Recent Developments: 


 
--  In February 2014, the Company signed a memorandum of agreement to
    acquire a 76,000 dwt panamax drybulk vessel built in 2004, in Japan.
    
    
--  In January 2014, the Company raised approximately $29 million of net
    proceeds by selling 30,700 shares of its Series B Convertible
    Preferred stock
    
    
--  In November 2013, the Company ordered two ultramax drybulk vessel
    newbuildings with deliveries in late 2015 and early 2016 at a Chinese
    shipyard.

  
(1) Adjusted EBITDA, Adjusted net loss and Adjusted loss per share are
not recognized measurements under GAAP. Refer to a subsequent section
of the Press Release for the definitions and reconciliation of these
measurements to the most directly comparable financial measures
calculated and presented in accordance with U.S. GAAP. 
Aristides Pittas, Chairman and CEO of Euroseas commented:
"Containership rates improved marginally during the fourth quarter of
2013 but overall were very depressed in 2013 due to weak demand and
significant supply. Drybulk rates exhibited increased volatility
since late summer of 2013 reaching for short periods very satisfying
rate levels. While our containerships roughly earned their operating
costs and mortgage interest, a couple of drybulk vessel charters that
we renewed were at higher levels. Looking forward, we remain
cautiously optimistic for both sectors expecting rates to increase a
bit in 2014 due to marginally improving demand/supply balance. 
As a result of our near term outlook of both markets, we believe that
2014 would be a good time to invest in drybulk vessels, mainly, but
also containerships, expanding and renewing our fleet. To that
effect, we placed an order in November 2013 for two ultramax
newbuildings with delivery at the end of 2015 and beginning of 2016,
and earlier this week we agreed to acquire a panamax bulker built in
2004, in Japan. We continuously evaluate acquisition opportunities
with the objective to invest in additional drybulk vessels,
secondhand and/or additional newbuildings, or containerships. At the
same time, within 2014 we raised approximately $29 million of net
proceeds by issuing convertible preferred stock and welcoming as
shareholder one institution with commitment to shipping who is
supportive of our strategy.  
Our Board believes that 2014 will be a turning point for Euroseas
both in terms of its fleet growth and renewal and its determined
efforts in the capital markets to raise funds to further capitalize
on the market opportunities."  
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The
operating results of the fourth quarter of 2013 reflect the
continuing depressed state of the containership market which
influenced the charter rates earned by our containership vessels.
Additionally, increased operating expenses as compared to the fourth
quarter of 2012 influenced our results. 
Total daily vessel operating expenses, including management fees,
general and administrative expenses, but excluding drydocking costs,
increased approximately 10.3% during the fourth quarter of 2013
compared to the same quarter of last year while for the full year
2013 the increase was approximately 4.8% over 2012. The composition
of our fleet during the compared periods is partly a contributing
factor to the percent increase in the operating expenses as during
2013 we sold two vessels with streamlined operating expenses as
result of our long period of ownership of them and we bought one
which -- as any addition to our fleet -- initially requires higher
expenses. As always, we want to emphasize that cost control remains a
key component of our strategy, especially at depressed markets like
at present. 
As of December 31, 2013, our outstanding debt was $45.6 million
versus restricted and unrestricted cash of approximately $19.3
million. Our scheduled debt repayments over the next 12 months
amounted to about $12.9 million which includes approximately $4.6
million of a balloon repayment which we are considering refinancing.
Since the end of the year, we have drawn an additional loan of $8
million against four early 1990's built unencumbered vessels maturing
in three years. We were in compliance with all our debt covenants as
of December 31, 2013." 
Fourth Quarter 2013 Results:
 For the fourth quarter of 2013, the
Company reported total net revenues of $9.7 million representing a
22% decrease over total net revenues of $12.4 million during the
fourth quarter of 2012. The Company reported a net loss for the
period of $86.1 million as compared to net loss of $2.0 million for
the fourth quarter of 2012. The results for the fourth quarter of
2013 include a $0.1 million net unrealized gain on derivatives
, a
$78.2 million impairment loss on vessels (or $1.71 loss per share,
basic and diluted) and a $0.2 million net realized loss on
derivatives as compared to $0.4 million net unrealized gain on
derivatives and a $0.4 million net realized loss on derivatives for
the same period of 2012.  
Effective October 1, 2013, the Company changed its estimate for the
useful life of its containerships to 25 years from 30 years based on
certain industry developments. The effect of this change of estimate
on the depreciation of the Company's vessels added an expense of $3.4
million or $0.08 loss per share, basic and diluted. Depreciation for
the fourth quarter of 2013 (including the effect of the change of
estimate on the depreciation) was $7.4 million as compared to a $4.0
million, if the estimated useful life of the Company's vessels
remained unchanged and as compared to the $4.3 million of the same
period of 2012. On average, 14.00 vessels were owned and operated
during the fourth quarter of 2013 earning an average time charter
equivalent rate of $7,923 per day compared to 15.00 vessels in the
same period of 2012 earning an average time charter equivalent rate
of $9,510 per day.  
Furthermore, as a result of the reduced useful life of its
containerships, the Company determined that the book values of nine
of its container-carriers were not recoverable as of December 31,
2013 and, thus, a non-cash impairment loss of $78.2 million (or $1.71
loss per share, basic and diluted) was recorded. The Company believes
that the book values of its ships, following the impairment, provide
a better estimation of the current values of its assets consistent
with market conditions. 
Adjusted EBITDA for the fourth quarter of 2013 was ($0.1) million
decreasing from the $2.5 million achieved during the fourth quarter
of 2012. Basic and diluted loss per share for the fourth quarter of
2013 was $1.89, calculated on 45,617,130 basic and diluted weighted
average number of shares outstanding, compared to $0.04 losses per
share for the fourth quarter of 2012, calculated on 45,265,155 basic
and diluted weighted average number of shares outstanding,
respectively.  
Excluding the effect on the loss for the quarter ended December 31,
2013 of the unrealized gain, the realized loss on derivatives and the
impairment loss on vessels, the adjusted loss per share for the
quarter would have been $0.17 per share, basic and diluted (and
excluding the increase in depreciation $0.10 per share, basic and
diluted) compared to a loss of $0.04 per share for the quarter ended
December 31, 2012. Usually, security analysts do not include the
above items in their published estimates of earnings per share.  
Full Year 2013 Results:
 For the full year of 2013, the Company
reported total net revenues of $39.2 million representing a 25.4%
decrease over total net revenues of $52.5 million during the twelve
months of 2012. The Company reported net loss for the period of
$103.4 million as compared to net loss of $13.2 million for the
twelve months of 2012. The results for the twelve months of 2013
include a $1.4 million net unrealized gain on derivatives, a $1.6
million net realized loss on derivatives, a $78.2 million impairment
loss (or $1.72 loss per share, basic and diluted) and a $1.9 million
net loss on sale of vessels, as compared to a $1.1 million net
unrealized gain on derivatives and trading securities, a $1.7 million
net realized loss on derivatives and $8.6 million loss on sale of a
vessel for the same period of 2012.  
Depreciation expense for 2013 was $20.0 million compared to $17.4
million during the same period of 2012. On average, 14.56 vessels
were owned and operated during the twelve months of 2013 earning an
average time charter equivalent rate of $7,945 per day compared to
15.21 vessels in the same period of 2012 earning an average time
charter equivalent rate of $10,155 per day.  
Adjusted EBITDA for 2013 was $(1.7) million decreasing from the $14.9
million achieved during the twelve months of 2012. Basic and diluted
net loss per share for the twelve months of 2013 was $2.28,
calculated on 45,442,841 basic and diluted weighted average number of
shares outstanding, compared to a loss per share of $0.34, calculated
on 38,950,100 basic and diluted weighted average number of shares
outstanding, respectively.  
Excluding the effect on the losses for 2013 of the net unrealized
gain on derivatives, realized loss on derivatives, the net loss on
sale of vessels and impairment loss, the adjusted loss per share for
the year ended December 31, 2013 would have been $0.51 per share
basic and diluted compared to losses of $0.10 per share for the year
ended December 31, 2012. Usually, security analysts do not include
the above items in their published estimates of earnings per share.  
Fleet Profile: 
 The Euroseas Ltd. fleet profile, as of February the
20th is as follows: 


 
                                                                            
                                                                            
----------------------------------------------------------------------------
                         Type       Dwt     TEU   Year Employment(*)   TCE  
Name                                             Built                 Rate 
                                                                     ($/day)
----------------------------------------------------------------------------
Dry Bulk Vessels                                                            
----------------------------------------------------------------------------
                        Panamax    74,020         2000  TC 'til Apr- $12,500
PANTELIS                                                    14              
----------------------------------------------------------------------------
                        Panamax    72,119         1997  TC 'til Oct-    Hire
                                                             14       97% of
ELENI P                                                              Average
                                                                     BPI 4TC
----------------------------------------------------------------------------
                        Panamax    69,268         1993  TC 'til May-  $7,500
ARISTIDES N.P.                                               14             
----------------------------------------------------------------------------
                       Handymax    46,667         1998  TC 'til Sep-  $7,500
MONICA P                                                    14              
----------------------------------------------------------------------------
Hull Number DY 160     Ultramax    63,500         2015      N/A             
----------------------------------------------------------------------------
Hull Number DY 161     Ultramax    63,500         2016      N/A             
----------------------------------------------------------------------------
Total Dry Bulk            6       389,074                                   
Vessels                                                                     
----------------------------------------------------------------------------
Container Carriers                                                          
----------------------------------------------------------------------------
EVRIDIKI G (ex-      Inte
rmediate  34,677  2,556  2001    TC 'til     $8,000
MAERSK NOUMEA)                                            April-14          
----------------------------------------------------------------------------
                     Intermediate  31,627  2,228  1990 TC till June-  $6,800
                                                             14             
TIGER BRIDGE                                            +6 months in  $9,500
                                                         Charterers         
                                                           Option           
----------------------------------------------------------------------------
                     Intermediate  30,360  2,008  1998  TC 'til Sep-  $6,950
AGGELIKI P                                                   14             
----------------------------------------------------------------------------
                      Handy size   33,667  1,932  1990  TC 'til Sep-  $6,950
DESPINA P                                                    14             
----------------------------------------------------------------------------
                                                        TC 'til Mar-  $6,500
                      Handy size   30,007  1,742  1992       14             
CAPTAIN COSTAS                                         +12 months in $11,500
(ex-OEL TRANSWORLD)                                      Charterers         
                                                          Option            
----------------------------------------------------------------------------
MARINOS (ex-YM PORT   Handy size   23,596  1,599  1993  TC 'till Apr  $7,150
KELANG, ex-MASTRO                                           -14             
NICOS, ex- YM                                                               
XINGANG I)                                                                  
----------------------------------------------------------------------------
                      Handy size   22,301  1,732  1999    TC 'till    $7,500
JOANNA                                                   April - 14         
----------------------------------------------------------------------------
                      Handy size   20,346  1,452  1995  TC 'til May-  $7,200
MANOLIS P                                                    14             
----------------------------------------------------------------------------
                        Feeder     18,253  1,169  1990  TC 'til Oct-  $8,200
NINOS                                                        14             
----------------------------------------------------------------------------
                        Feeder     18,154  1,169  1993  TC till Mar-  $7,700
                                                            14 +            
KUO HSIUNG                                              12 months in $11,500
                                                         Charterers         
                                                           Option           
----------------------------------------------------------------------------
Total Container           10      262,988 17,587                            
Carriers                                                                    
----------------------------------------------------------------------------
Fleet Grand Total         16      652,062 17,587                            
----------------------------------------------------------------------------

 
Summary Fleet Data: 


 
                                                                            
                                                                            
----------------------------------------------------------------------------
                                     3 months, 3 months,    Year      Year  
                                       ended     ended     ended     ended  
                                      December  December  December  December
                                      31, 2012  31, 2013  31, 2012  31, 2013
----------------------------------------------------------------------------
FLEET DATA                                                                  
Average number of vessels (1)           15.00     14.00     15.21     14.56 
Calendar days for fleet (2)           1,380.0   1,288.0   5,566.0   5,313.0 
Scheduled off-hire days incl. laid-                                         
 up (3)                                  28.8       0.8      44.9     127.6 
Available days for fleet (4) = (2) -                                        
 (3)                                  1,351.2    1287.2   5,521.1   5,185.4 
Commercial off-hire days (5)              2.6       0.6     208.4     167.8 
Operational off-hire days (6)            11.8      15.4      33.1      56.7 
Voyage days for fleet (7) = (4) -                                           
 (5) - (6)                            1,336.8    1271.2   5,279.7   4,960.8 
Fleet utilization (8) = (7) / (4)        98.9%     98.8%     95.6%     95.7%
Fleet utilization, commercial (9) =                                         
 ((4) - (5)) / (4)                       99.8%    100.0%     96.2%     96.8%
Fleet utilization, operational (10)                                         
 = ((4) - (6)) / (4)                     99.1%     98.8%     99.4%     98.9%
                                                                            
AVERAGE DAILY RESULTS                                                       
Time charter equivalent rate (11)       9,510     7,923    10,155     7,945 
Vessel operating expenses excl.                                             
 drydocking expenses (12)               5,381     5,934     5,401     5,665 
General and administrative expenses                                         
 (13)                                     654       689       658       639 
Total vessel operating expenses (14)    6,035     6,623     6,058     6,304 
----------------------------------------------------------------------------
Drydocking expenses (15)                  611       299       290       718 
----------------------------------------------------------------------------

 
(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. The Company defines calendar days as the total
number of days in a period during which each vessel in the Company's
fleet was in its 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
its fleet over a period and affect both the amount of revenues and
the amount of expenses that the Company records 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. The Company uses
available days to measure the number of days in a period during which
vessels were available to generate revenues. 
(4) Available days. The Company defines available days as the total
number of days in a period during which each vessel in the Company's
fleet was in its possession net of scheduled off-hire days including
days of vessels laid-up. 
(5) Commercial off-hire days. The Company defines commercial off-hire
days as days waiting to find employment.  
(6) Operational off-hire days. The Company defines operational
off-hire days as days associa
ted with unscheduled repairs or other
off-hire time related to the operation of the vessels. 
(7) Voyage days. The Company defines voyage days as the total number
of days in a period during which each vessel in the Company's fleet
was in its possession net of commercial and operational off-hire
days. The Company uses voyage days to measure the number of days in a
period during which vessels actually generate revenues. 
(8) Fleet utilization. The Company calculates fleet utilization by
dividing the number of the Company's voyage days during a period by
the number of its available days during that period. The Company uses
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. The Company calculates commercial
fleet utilization by dividing the Company's available days net of
commercial off-hire days during a period by its available days during
that period. 
(10) Fleet utilization, operational. The Company calculates
operational fleet utilization by dividing the Company's available
days net of operational off-hire days during a period by its
available days during that period. 
(11) Time charter equivalent, or TCE, is a measure of the average
daily revenue performance of a vessel on a per voyage basis. The
Company's method of calculating TCE is determined by dividing Voyage
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. 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.  
(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 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 expense by fleet calendar days
for the relevant time period.  
(14) Total vessel operating expenses, or TVOE, is a measure of the
Company's total expenses associated with operating its vessels. TVOE
is the sum of vessel operating expenses excluding drydocking expenses
and general and administrative expenses. Daily TVOE is calculated by
dividing TVOE by fleet calendar days for the relevant time period.  
(15) Drydocking expenses, which 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. 
Conference Call and Webcast: 
 Tomorrow, Friday, February 21, 2014 at
9:00 a.m. EST, 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: 1 866
819 7111 (from the US), 0800 953 0329 (from the UK) or +44 (0)1452
542 301 (international standard dial in). Please quote "Euroseas".  
A replay of the conference call will be available until February 28,
2014. The United States replay number is 1(866) 247-4222; from the UK
0(800) 953-1533; the standard international replay number is (+44)
(0) 1452 550 000 and the access code required for the replay is:
6973591#. 
Audio webcast - Slides Presentation:
 There will be a live and then
archived audio webcast of the conference call, via the internet
through the Euroseas website (www.euroseas.gr). Participants to the
live webcast should register on the website approximately 10 minutes
prior to the start of the webcast. A slide presentation on the Fourth
Quarter and Full Year 2013 results in PDF format will also be
available 10 minutes prior to the conference call and webcast
accessible on the company's website (www.euroseas.gr) on the webcast
page. Participants to the webcast can download the PDF presentation. 


 
                                                                            
                                                                            
                               Euroseas Ltd.                                
          Unaudited Consolidated Condensed Statements of Operations         
       (All amounts expressed in U.S. Dollars - except share amounts)       
                                                                            
----------------------------------------------------------------------------
                  Three Months   Three Months                               
                     Ended          Ended        Year Ended     Year Ended  
                  December 31,   December 31,   December 31,   December 31, 
                      2012           2013           2012           2013     
----------------------------------------------------------------------------
                                                                            
Revenues                                                                    
  Voyage revenue    12,942,762     10,126,346     54,921,697     40,850,051 
  Related party                                                             
   revenue              60,000         60,000        240,000        240,000 
  Commissions         (607,993)      (513,207)    (2,673,703)    (1,936,381)
                                                                            
Net revenues        12,394,769      9,673,139     52,487,994     39,153,670 
                                                                            
Operating                                                                   
 expenses                                                                   
  Voyage                                                                    
   expenses            228,879        151,845      1,329,668      1,537,898 
  Vessel                                                                    
   operating                                                                
   expenses          6,183,195      6,436,706     25,075,139     25,191,250 
  Drydocking                                                                
   expenses            845,777        385,048      1,616,425      3,816,699 
  Depreciation       4,283,094      7,433,670     17,385,608     19,983,772 
  Management                                                                
   fees              1,242,360      1,206,258      4,984,098      4,891,024 
  Other general                                                             
   and                                                                      
   administrativ                                                            
   e expenses          902,232      1,037,113      3,661,426      3,542,619 
  Net loss on                                                               
   sale of                                                                  
   vessels                   -              -      8,568,234      1,935,019 
  Impairment                                                                
   loss                      -     78,207,462              -     78,207,462 
  Other income               -              -       (254,604)             - 
                                                                            
Total operating                                                             
 expenses 
          13,685,537     94,858,102     62,365,994    139,105,743 
                                                                            
Operating loss      (1,290,768)   (85,184,963)    (9,878,000)   (99,952,073)
                                                                            
Other                                                                       
 income/(expense                                                            
 s)                                                                         
  Interest and                                                              
   finance cost       (473,124)      (426,247)    (1,977,226)    (1,845,776)
  Loss on                                                                   
   derivatives,                                                             
   net                  (1,262)       (68,990)      (637,403)      (177,132)
  Gain on                                                                   
   trading                                                                  
   securities                -              -         20,373              - 
  Foreign                                                                   
   exchange                                                                 
   (loss) / gain        (2,058)       (12,742)         8,321        (10,143)
  Other income               -        196,196              -        196,196 
  Interest                                                                  
   income              192,490         76,611        484,886        387,292 
  Other                                                                     
   expenses, net      (283,954)      (235,172)    (2,101,049)    (1,449,563)
  Equity loss in                                                            
   joint venture      (443,281)      (695,167)    (1,219,692)    (2,023,191)
----------------------------------------------------------------------------
                                                                            
Net loss            (2,018,003)   (86,115,302)   (13,198,741)  (103,424,827)
----------------------------------------------------------------------------
Loss, per share,                                                            
 basic and                                                                  
 diluted                 (0.04)         (1.89)         (0.34)         (2.28)
----------------------------------------------------------------------------
Weighted average                                                            
 number of                                                                  
 shares, basic                                                              
 and diluted        45,265,155     45,617,130     38,950,100     45,442,841 
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
                                                                            
                               Euroseas Ltd.                                
              Unaudited Consolidated Condensed Balance Sheets               
       (All amounts expressed in U.S. Dollars - except share amounts)       
                                                                            
                                                December 31,  December 31,  
                                                    2012           2013     
                                                                            
ASSETS                                                                      
Current Assets:                                                             
  Cash and cash equivalents                       33,374,960     11,400,237 
  Trade accounts receivable                        1,425,171      1,879,151 
  Other receivables, net                           2,310,111      1,440,833 
  Inventories                                      1,812,636      1,474,114 
  Due from related party                           4,948,443              - 
  Restricted cash                                    926,011        462,415 
  Prepaid expenses                                   273,080        295,248 
Total current assets                              45,070,412     16,951,998 
                                                                            
Fixed assets:                                                               
  Vessels, net                                   206,934,746    105,463,737 
  Advances for vessels under construction                  -         50,122 
Long-term assets:                                                           
  Restricted cash                                  9,000,000      7,400,000 
  Deferred charges, net                              318,578        172,753 
  Deferred assets                                          -        165,678 
    Other invetsments                                      -      5,196,196 
    Investment in joint venture                   16,989,061     21,215,870 
Total long-term assets                           233,242,385    139,664,356 
---------------------------------------------- -------------  ------------- 
Total assets                                     278,312,797    156,616,354 
---------------------------------------------- -------------  ------------- 
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities:                                                        
  Long term debt, current portion                 15,937,000     12,862,000 
  Trade accounts payable                           2,438,716      2,336,952 
  Accrued expenses                                 1,143,626      1,002,445 
  Accrued dividends                                   36,424         13,050 
  Deferred revenue                                 1,093,317        996,599 
  Due to related company                                   -        903,478 
  Derivatives                                      1,718,438        697,889 
Total current liabilities                         22,367,521     18,812,413 
                                                                            
Long-term liabilities:                                                      
  Long term debt, net of current portion          45,644,000     32,782,000 
  Derivatives                                        675,130        319,859 
Total long-term liabilities                       46,319,130     33,101,859 
Total liabilities                                 68,686,651     51,914,272 
                                                                            
Shareholders' equity:                                                       
  Common stock (par value $0.03, 200,000,000                                
   shares authorized, 45,319,605 and                                        
   45,723,255, respectively, issued and           1,359,588      1,371,698  
   outstanding)                                                             
  Preferred shares (par value $0.01,                                        
   20,000,000 shares authorized, no shares                                  
   issued and outstanding)                                 -              - 
  Additional paid-in capital                     251,758,459    252,314,683 
  Accumulated deficit                            (43,491,901)  (148,984,299)
Total shareholders' equity                       209,626,146    104,702,082 
---------------------------------------------- -------------  ------------- 
Total liabilities and shareholders' equity       278,312,797    156,616,354 
---------------------------------------------- -------------  ------------- 
            
                                                                
                                                                            
                                                                            
                                                                            
                               Euroseas Ltd.                                
         Unaudited Consolidated Condensed Statements of Cash Flows          
                  (All amounts expressed in U.S. Dollars)                   
                                                                            
                                                 Year Ended     Year Ended  
                                                December 31,   December 31, 
                                                    2012           2013     
                                                                            
Cash flows from operating activities:                                       
Net loss                                         (13,198,741)  (103,424,827)
Adjustments to reconcile net loss to net cash                               
 provided by operating activities:                                          
Depreciation of vessels                           17,385,608     19,983,772 
Impairment loss                                            -     78,207,462 
Amortization of deferred charges                     135,981        145,825 
Loss in investment in joint venture                1,219,692      2,023,191 
Share-based compensation                             671,381        568,334 
Loss on sale of vessels                            8,568,234      1,935,019 
Unrealized gain on derivatives, net               (1,057,929)    (1,375,820)
Gain on trading securities                           (20,373)             - 
Other income accrued                                       -       (196,196)
Proceeds from the sale of trading securities          47,846              - 
Changes in operating assets and liabilities       (5,238,593)     6,165,129 
Net cash provided by operating activities          8,513,106      4,031,889 
                                                                            
Cash flows from investing activities:                                       
Proceeds from sale of vessels                      4,250,843      7,322,818 
Contribution to joint venture                     (3,750,000)    (6,250,000)
Purchase of a vessel                                       -     (5,978,062)
Advances for vessels under construction                    -        (37,820)
Other investments                                          -     (5,000,000)
Change in restricted cash                         (4,005,900)     2,063,596 
Net cash used ininvesting activities              (3,505,057)    (7,879,468)
                                                                            
Cash flows from financing activities:                                       
Dividends paid                                    (4,447,522)    (2,090,944)
Offering expenses paid                              (295,733)       (99,200)
Proceeds from shares issued                       15,237,303              - 
Repayment of long-term debt                      (13,332,000)   (15,937,000)
Net cash used in financing activities             (2,837,952)   (18,127,144)
                                                                            
Net increase / (decrease) in cash and cash                                  
 equivalents                                       2,170,097    (21,974,723)
                                                                            
Cash and cash equivalents at beginning of year    31,204,863     33,374,960 
Cash and cash equivalents at end of year          33,374,960     11,400,237 
                                                                            
                                                                            
                                                                            
                                                                            
                                Euroseas Ltd.                               
                    Reconciliation of Adjusted EBITDA to                    
           Net loss and Cash Flow Provided By Operating Activities          
                   (All amounts expressed in U.S. Dollars)                  
                                                                            
============================================================================
                      Three Months  Three Months                            
                         Ended         Ended       Year Ended    Year Ended 
                      December 31,  December 31,  December 31,  December 31,
                          2012          2013          2012          2013    
----------------------------------------------------------------------------
Net loss               (2,018,003)  (86,115,302)  (13,198,741) (103,424,827)
----------------------------------------------------------------------------
Interest and finance                                                        
 costs, net (incl.                                                          
 interest income)         280,634       349,636     1,492,340     1,458,484 
----------------------------------------------------------------------------
Depreciation            4,283,094     7,433,670    17,385,608    19,983,772 
----------------------------------------------------------------------------
Net loss on sale of                                                         
 vessels                        -             -     8,568,234     1,935,019 
----------------------------------------------------------------------------
Loss on derivatives,                                                        
 net                        1,262        68,990       637,403       177,132 
----------------------------------------------------------------------------
Impairment loss                 -    78,207,462             -    78,207,462 
----------------------------------------------------------------------------
Adjusted EBITDA         2,546,987       (55,544)   14,884,844    (1,662,958)
----------------------------------------------------------------------------
                                                                            
                                                                            
============================================================================
                      Three Months  Three Months                            
                         Ended         Ended       Year Ended    Year Ended 
                      December 31,  December 31,  December 31,  December 31,
                          2012          2013          2012          2013    
----------------------------------------------------------------------------
Net cash flow                                                               
 provided by                                                                
 operating                                                                  
 activities             2,097,348     1,461,541     8,513,106     4,031,889 
----------------------------------------------------------------------------
Changes in operating                                                        
 assets /                                                                   
 liabilities              372,697    (1,462,105)    5,238,593    (6,165,129)
----------------------------------------------------------------------------
Realized loss on                                                            
 derivatives, net         424,771       217,850     1,695,331     1,552,953 
----------------------------------------------------------------------------
Proceeds from sale                                                          
 of trading                                                                 
 securities, g
ain on                                                        
 trading securities                                                         
 and equity loss in                                                         
 joint venture net       (443,281)     (498,971)   (1,247,165)   (1,826,996)
----------------------------------------------------------------------------
Share-based                                                                 
 compensation            (153,650)      (93,414)     (671,381)     (568,334)
----------------------------------------------------------------------------
Interest, net             249,102       319,555     1,356,360     1,312,659 
----------------------------------------------------------------------------
Adjusted EBITDA         2,546,987       (55,544)   14,884,844    (1,662,958)
============================================================================

 
Adjusted EBITDA Reconciliation:
 Euroseas Ltd. considers Adjusted
EBITDA to represent net earnings / (loss) before interest, income
taxes, depreciation, amortization, gain / loss in derivatives, net
loss on sale of vessels and impairment loss. Adjusted EBITDA does not
represent and should not be considered as an alternative to net
income /(loss) or cash flow from operations, as determined by United
States generally accepted accounting principles, or U.S. GAAP, and
the Company's calculation of Adjusted EBITDA may not be comparable to
that reported by other companies. Adjusted EBITDA is included herein
because it is a basis upon which the Company assesses its financial
performance and liquidity position and because the Company believes
that it presents useful information to investors regarding a
company's ability to service and/or incur indebtedness. 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 loss to Adjusted net loss               
  (All amounts expressed in U.S. Dollars - except share data and per share  
                                  amounts)                                  
                                                                            
============================================================================
                                                                            
                      Three Months  Three Months                            
                         Ended         Ended       Year Ended    Year Ended 
                      December 31,  December 31,  December 31,  December 31,
                          2012          2013          2012          2013    
----------------------------------------------------------------------------
Net loss               (2,018,003)  (86,115,302)  (13,198,741) (103,424,827)
----------------------------------------------------------------------------
Unrealized gain on                                                          
 derivatives, net        (423,509)     (148,860)   (1,057,929)   (1,375,820)
----------------------------------------------------------------------------
Realized gain on                                                            
 trading securities             -             -       (20,373)            - 
----------------------------------------------------------------------------
Realized loss on                                                            
 derivatives, net         424,771       217,850     1,695,331     1,552,953 
----------------------------------------------------------------------------
Loss on sale of                                                             
 vessels, net                   -             -     8,568,234     1,935,019 
----------------------------------------------------------------------------
Impairment loss                 -    78,207,462             -    78,207,462 
----------------------------------------------------------------------------
Adjusted net loss      (2,016,741)   (7,838,850)   (4,013,478)  (23,105,213)
----------------------------------------------------------------------------
Adjusted loss per                                                           
 share, basic and                                                           
 diluted                    (0.04)        (0.17)        (0.10)        (0.51)
----------------------------------------------------------------------------
Weighted average                                                            
 number of shares,                                                          
 basic and diluted     45,265,155    45,617,130    38,950,100    45,442,841 
============================================================================

 
Adjusted net loss and Adjusted net loss per share Reconciliation: 
Euroseas Ltd. considers Adjusted net loss to represent net loss
before gain / loss in derivatives, realized gain on trading
securities, net loss / (gain) on sale of vessels and impairment loss.
Adjusted net loss and Adjusted net loss per share is included herein
because the Company believes it assists its 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 gain / loss in derivatives,
realized gain on trading securities, net (gain) / loss on sale of
vessels and impairment loss, which items may significantly affect
results of operations between periods. 
Adjusted net loss and Adjusted net loss per share do not represent
and should not be considered as an alternative to net loss or loss
per share, as determined by U.S. GAAP, The Company's definition of
Adjusted net loss and Adjusted net loss 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 136 years. Euroseas
trades on the NASDAQ Global Market under the ticker ESEA since
January 31, 2007.  
Euroseas operates in the dry cargo, drybulk and container shipping
markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO
9001:2008 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 14 vessels, including 3 Panamax drybulk
carriers and 1 Handymax drybulk carrier, 3 Intermediate
containership, 5 Handysize containerships, 2 Feeder containerships.
Euroseas` 4 drybulk carriers have a total cargo capacity of 262,074
dwt, its 10 containerships have a cargo capacity of 17,587 teu. The
Company has also signed a contract for the construction of two
Ultramax fuel efficient drybulk carriers. The vessels will have a
carrying capacity of 63,500 dwt each and will be built at Yangzhou
Dayang Shipbuilding Co., Ltd., member of Sinopacific Shipbuilding
Group. Delivery of the vessels is scheduled during the fourth quarter
of 2015 and the first quarter of 2016, respectively. Including the
two new-building vessels the total cargo capacity of the Company's
drybulk vessels will be 389,074 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 and container ships, 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 the Company's website www.euroseas.gr 
Company Contact
Tasos Aslidis
Chief Financial Officer
Euroseas Ltd.
11 Canterbury Lane,
Watchung, NJ 07069
Tel. (908) 301-9091
E-mail: aha@euroseas.gr 
Investor Relations / Financial Media
Nicolas Bornozis
President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: euroseas@capitallink.com 
 
 
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