Box Ships Inc. Reports Financial Results For The Fourth Quarter And Year Ended December 31, 2013

Box Ships Inc. Reports Financial Results For The Fourth Quarter And Year Ended
                              December 31, 2013

PR Newswire

ATHENS, Greece, March 11, 2014

ATHENS, Greece, March 11, 2014 /PRNewswire/ -- Box Ships Inc. (NYSE: TEU) (the
"Company"), a global shipping company specializing in the seaborne
transportation of containers, announced today its results for the fourth
quarter and year ended December 31, 2013.

                           Three Months Ended December Year Ended December 31,
                           31,
Financial Highlights

(Expressed in thousands of 2012          2013          2012        2013
U.S. Dollars, except per
share data)
Time charter revenues      $18,055       $17,249       $67,317     $71,305
Amortization of
above/below market time    1,327         1,312         3,649       5,347
charters
Time charter revenues,     $19,382       $18,561       $70,966     $76,652
adjusted^1
EBITDA^2                   $9,250        $8,808        $36,677     $38,739
Adjusted EBITDA^2          $11,228       $10,952       $42,087     $47,209
Net Income                 $2,874        $3,016        $13,176     $15,308
Adjusted Net Income^2      $4,852        $5,160        $18,586     $23,778
Earnings per common share  $0.12         $0.10         $0.56       $0.47
(EPS), basic
Earnings per common share  $0.11         $0.10         $0.54       $0.46
(EPS), diluted
Adjusted Earnings per      $0.21         $0.19         $0.95       $0.91
common share, basic^2
Adjusted Earnings per      $0.19         $0.19         $0.89       $0.84
common share, diluted^2

^1 Time charter revenues, adjusted, is not a recognized measurement under
generally accepted accounting principles in the United States of America
("U.S. GAAP" or "GAAP"). We believe that the presentation of Time charter
revenues, adjusted is useful to investors because it presents the charter
revenues recognized in the relevant period based on the contracted charter
rates, excluding the amortization of above/below market time charters attached
to vessels acquired. Please refer to the definition and reconciliation of this
measurement to the most directly comparable financial measure calculated and
presented in accordance with U.S. GAAP at the back of this release.
^2 EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per
common share ("Adjusted EPS") are not recognized measurements under GAAP.
Please refer to the definitions and reconciliation of these measurements to
the most directly comparable financial measures calculated and presented in
accordance with U.S. GAAP at the back of this release.

Mr. Michael Bodouroglou, Chairman, President and Chief Executive Officer of
Box Ships Inc., commented:

"The fourth quarter of 2013 was a challenging one, despite being our eleventh
consecutive profitable quarter as a public company. The containership market
continues to be pressured by the extended weakness in Europe and the United
States, and charter rates have continued to decline during the fourth quarter.
The Box Queen, formerly known as the Maersk Diadema, was redelivered to us
upon expiration of its time charter with Maersk and was subsequently
rechartered to MSC at a rate that was $21,900 per day less than its previous
employment. The CMA CGM Kingfish and CMA CGM Marlin have both extended their
charters with CMA CGM for a period of four to seven months at a rate which is
$16,000 per day less than their previous employment. This continued decline in
rates, coupled with the fact that we have another vessel employed at a charter
rate well above the current market levels expiring in 2014, has caused the
Board of Directors to refrain from paying a common stock dividend with respect
to the fourth quarter of 2013 in an effort to maintain our liquidity and
ensure the sustainability of the Company going forward. The Board of Directors
will continue to evaluate the market conditions at regular intervals to
consider a potential reinstatement of the common stock dividend when the
market recovers, as we remain committed to our policy of paying out excess
free cash flow in the form of dividends."

Results of Operations

Three months ended December 31, 2013 compared to three months ended December
31, 2012

During the fourth quarter of 2013, we operated an average of 9 vessels. Our
Net Income and Adjusted Net Income during the fourth quarter of 2013 was $3.0
million and $5.2 million, respectively, resulting in basic earnings per share
of $0.10 and basic adjusted earnings per share of $0.19. EBITDA and Adjusted
EBITDA for the fourth quarter of 2013 was $8.8 million and $11.0 million,
respectively.

During the fourth quarter of 2012, we operated an average of 9 vessels. Our
Net Income and Adjusted Net Income during the fourth quarter of 2012 was $2.9
million and $4.9 million, respectively, resulting in basic earnings per share
of $0.12 and basic adjusted earnings per share of $0.21. EBITDA and Adjusted
EBITDA for the fourth quarter of 2012 was $9.2 million and $11.2 million,
respectively.

Net revenues

Net revenues represent charter hire earned, net of commissions. During the
fourth quarter of 2013 and 2012, our vessels operated a total of 797 and 801
days, respectively, out of a total of 828 calendar days in both periods.
Currently, all vessels in our fleet are employed under fixed rate time
charters. Following the extension of charters for the Box Voyager, CMA CGM
Kingfish and CMA CGM Marlin,  discussed below, we have an average weighted
remaining charter duration of 12 months (weighted by aggregate contracted
charter hire). The Company reported net revenues for the fourth quarter of
2013 of $16.9 million, which represented a decrease of 4.5% compared to net
revenue for the fourth quarter of 2012 of $17.7 million, mainly due to 31 idle
days of the Box Queen in the fourth quarter of 2013. Our net revenues are also
net of the amortization of above/below market time charters, which decreased
our revenues and net income for the fourth quarter of 2013 and 2012 by $1.3
million for both periods, or $0.05 and $0.07 per common share, respectively.
Our average time charter equivalent rate, or TCE rate, for the fourth quarter
of 2013 was $20,591 per vessel per day, which was 3.2% below our TCE rate of
$21,276 per vessel per day during the fourth quarter of 2012, due to the
redelivery of the Box Queen on November 30, 2013 from the charterers, which
was partially offset by the higher rate achieved on the charter extension of
the Box Trader in the fourth quarter of 2013 and the higher voyage expenses
incurred during the fourth quarter of 2012. Our adjusted TCE rate was $22,237
per vessel per day in the fourth quarter of 2013, 3.0% lower than our adjusted
TCE of $22,933 for the fourth quarter of 2012, for the same reasons outlined
above. TCE rate is not a recognized measurement under GAAP. Please see the
table at the back of this release for a reconciliation of TCE rates to time
charter revenues, the most directly comparable financial measure calculated
and presented in accordance with U.S. GAAP.

Voyage expenses

Voyage expenses for the fourth quarter of 2013 and 2012 amounted to $0.5
million and $0.6 million, respectively, and mainly relate to war risk
insurance costs and bunkers consumed during the periods that vessels were in
between employment. Voyage expenses for the fourth quarter of 2013 include
approximately $0.1 million, relating to war risk insurance costs and $0.2
million, relating to bunkers consumed by the Box Queen during the period the
vessel was unemployed. Voyage expenses for the fourth quarter of 2012 include
approximately $0.4 million, relating to war risk insurance costs and $0.1
million, relating to bunkers consumed by the Box Trader and the Box Voyager
during the periods the vessels were unemployed.

Vessels operating expenses

Vessels operating expenses comprise crew wages and related costs, insurance
and vessel registry costs, repairs and maintenance expenses (excluding
dry-docking expenses), the cost of spares and consumable stores, regulatory
fees, non-cash amortization of other intangible assets and other miscellaneous
expenses. The amortization of other intangible assets for each of the fourth
quarters of 2013 and 2012 amounted to $0.3 million. During the fourth quarter
of 2013, vessels operating expenses including the amortization of other
intangible assets amounted to $4.7 million, or $4.4 million on an adjusted
basis to exclude the amortization of other intangible assets, compared to $4.9
million, or $4.6 million on an adjusted basis, during the fourth quarter of
2012. On average, our vessels' operating expenses for the fourth quarter of
2013 decreased to $5,622 per vessel per day, or $5,300 per vessel per day on
an adjusted basis, compared to $5,874 per vessel per day, or $5,552 per vessel
per day on an adjusted basis, in the fourth quarter of 2012, an improvement of
approximately 4.5% period over period on a cash basis after adjusting for
non-cash items.

Management fees charged by a related party

Management fees charged by Allseas Marine S.A (our "Manager" or "Allseas") for
the fourth quarters of 2013 and 2012 were $0.7 million, or $871 (€643.77) per
vessel per day, and $822 (€634.88) per vessel per day, for the fourth quarter
of 2013 and 2012, respectively. Management fees charged by a related party
represent fees for management and technical services in accordance with our
management agreements and are adjusted annually in accordance with the
official Eurozone inflation rate. This fee is charged on a daily basis per
vessel and is affected by the number of vessels in our fleet, the number of
calendar days during the period, the official Eurozone inflation rate and the
U.S. Dollar/Euro exchange rate at the beginning of each month.

Depreciation

Depreciation for our fleet for the fourth quarters of 2013 and 2012 was $3.8
million and $4.2 million, respectively. Effective January 1, 2013, the Company
revised its scrap rate estimate prospectively from $150 to $300 per
lightweight ton. The change in accounting estimate does not have a
retrospective effect in the financial statements previously reported. The
effect of this change was to decrease depreciation expense and to increase net
income by approximately $0.3 million, or $0.01 per basic common share, for the
three months ended December 31, 2013.

General and administrative expenses

General and administrative ("G&A") expenses for the fourth quarters of 2013
and 2012 were $2.7 million and $2.2 million, or $3,303 and $2,610 per vessel
per day, respectively. The increase in G&A expenses period over period was
primarily due to increased executive services fees paid to our Manager and
increased share-based compensation expense. During the fourth quarter of 2013
and 2012, expenses related to the provision of our executive services by our
Manager and incentive compensation amounted to $1.4 million and $1.2 million,
respectively, and share-based compensation amounted to $0.6 million and $0.4
million, respectively.

Insurance claims recoveries

Insurance claims recoveries amounted to $0.5 million for the fourth quarter of
2013 (2012: Nil), relating to the settlement of a hull and machinery claim for
the Box Voyager, incurred in 2012.

Interest and finance costs

Interest and finance costs amounted to $2.0 million and $2.2 million for the
fourth quarters of 2013 and 2012, respectively. This decrease in interest and
finance costs is due to the decrease in our average borrowings outstanding
period over period.

UNAUDITED CONSOLIDATED CONDENSED CASH FLOW INFORMATION
(Expressed in thousands of U.S. Dollars)
                                                       Year Ended December 31,
                                                       2012          2013
Net cash from Operating Activities                   $ 32,532     $  38,197
Net cash used in Investing Activities                  (62,421)      -
Net cash from / (used in) Financing Activities         29,880        (30,827)
Net (decrease) / increase in cash and cash           $ (9)        $  7,370
equivalents

Net cash from Operating Activities

Net cash from Operating Activities for the year ended December 31, 2013 was
$38.2 million. Our vessels generated positive cash flows from revenues, net of
commissions, of $75.2 million, while we paid $37.0 million for expenses, of
which $7.0 million relates to the payment of interest on our bank loans and on
our related party loan with Paragon Shipping Inc. ("Paragon Shipping").

Net cash from Operating Activities for the year ended December 31, 2012 was
$32.5 million. Our vessels generated positive cash flows from revenues, net of
commissions, of $69.4 million, while we paid $36.9 million for expenses, of
which $7.2 million relates to the payment of interest on our bank loans and on
our related party loan with Paragon Shipping.

Net cash used in Investing Activities

For the year ended December 31, 2013, there was no cash used in investing
activities. Net cash used in Investing Activities for the year ended December
31, 2012, was $62.4 million, relating to the acquisition of OOCL Hong Kong and
OOCL China, including attached intangibles.

Net cash from / (used in) Financing Activities

Net cash used in Financing Activities for the year ended December 31, 2013,
was $30.8 million. On March 18, 2013, we completed the public offering and
issuance of 4,000,000 of our common shares, resulting in net proceeds of $19.9
million, net of underwriting discounts, commissions and other offering
expenses paid by us of $1.1 million in aggregate. In July, October and
November 2013, we completed the public offering and issuance of an aggregate
of 916,333 shares of our 9.00% Series C Cumulative Redeemable Perpetual
Preferred Shares (the "Series C Preferred Shares"), resulting in net proceeds
of $20.5 million, net of underwriting discounts, commissions and other
offering expenses paid by us of $1.5 million in aggregate. $19.7 million out
of the net proceeds from the Series C Preferred Shares offering and our cash
reserves were used to redeem and retire all of our outstanding Series B-1
Preferred Shares. During the year ended December 31, 2013, we repaid $36.7
million of our debt, including our related party loan with Paragon Shipping,
paid financing costs of $0.2 million and paid dividends to our preferred and
common shareholders of $1.7 million and $12.9 million, in aggregate,
respectively.

Net cash from Financing Activities for the year ended December 31, 2012, was
$29.9 million. Included in the $29.9 million are the proceeds from the
issuance of 1,333,333 units, each unit consisting of one 9.75% Series B
Cumulative Redeemable Perpetual Preferred Share (the "Series B Preferred
Shares") and one warrant to purchase one of our common shares, which amounted
to $38.4 million in aggregate, net of related costs of $0.1 million, together
with the drawdown of $24.7 million under a secured loan agreement, net of
financing fees of $0.3 million, which were used to finance the acquisition of
OOCL Hong Kong and OOCL China. On July 18, 2012, we completed the public
offering and issuance of 4,285,715 of our common shares, resulting in net
proceeds of $28.0 million, net of underwriting discounts, commissions and
other offering costs of $2.0 million in the aggregate. We used a portion of
the net proceeds of the public offering to redeem 692,641 of the Series B
Preferred Shares at a price equal to the liquidation preference of $30.00 per
share, or $20.8 million in the aggregate. During the year ended December 31,
2012, we repaid $19.9 million of our debt and paid dividends to our preferred
and common shareholders of $0.7 million and $19.8 million, respectively.

Liquidity:

As of December 31, 2013, our cash and restricted cash (current and
non-current) amounted to $24.5 million in aggregate, of which $10.0 million is
considered restricted for minimum liquidity purposes under our loan
agreements. As of December 31, 2013, we had total outstanding indebtedness of
$179.6 million, of which $22.7 million is scheduled to be repaid in the
forthcoming 12-month period, of which $5.7 million has already been repaid as
of the date of this release. Furthermore, as of December 31, 2013, we were in
compliance with all of the covenants contained in our loan agreements, as
amended to give effect to the waivers we were granted during the second and
third quarter of 2013. As of December 31, 2013, had the waivers not been
granted, the Company would not have been in compliance with certain of its
financial covenants and security cover ratios contained in the loan
agreements. The waivers are due to expire during 2014, commencing on January
1, 2014, and in accordance with U.S. GAAP, unless the waivers are extended for
a period of more than one year after the balance sheet date or the loans are
refinanced prior to the issuance of the consolidated financial statements, our
total debt is required to be presented as current even though the Company was
in compliance as of December 31, 2013. In addition, we have no borrowing
capacity under our existing loan facilities and no capital commitments. We
anticipate that our current financial resources, together with cash generated
from operations will be sufficient to fund the operations of our current
fleet, including our working capital requirements, for the next 12 months,
assuming that the debt will not be accelerated by our lenders.

Dividends:

Our Board of Directors has determined that in an effort to maintain our
liquidity and help ensure the sustainability of the Company going forward, we
will not pay a common stock dividend with respect to the fourth quarter of
2013. The Board of Directors will continue to evaluate the market conditions
at regular intervals to consider a potential reinstatement of the dividend
when the market recovers, as we remain committed to our policy of paying out
excess free cash flow in the form of dividends.

On January 2, 2014, we paid our second dividend of $0.5 million with respect
to our Series C Preferred Shares, for the period from October 1, 2013 through
December 31, 2013. As of December 31, 2013, 916,333 Series C Preferred Shares
were outstanding.

Dividends on our Series C Preferred Shares accrue cumulatively at a rate of
9.00% per annum per $25.00 stated liquidation preference per Series C
Preferred Share and are payable, when, as and if declared by the Board of
Directors, on January 1, April 1, July 1 and October 1 of each year. Our
ability to pay dividends will be subject, among other things, to the
restrictions in our loan agreements, the provisions of Marshall Islands law
and other factors to be considered by our Board of Directors.

Chartering Update and Strategy:

In January 2014, the Box Queen entered into a time charter with Mediterranean
Shipping Company ("MSC"), for a period of 8 to 10 months, at a gross daily
charter rate of $6,100.

In February 2014, the Box Voyager extended its time charter with Chenglie
Navigation Co. ("CNC"), for an additional period of 6 to 8 months, commencing
on March 13, 2014, at a gross daily charter rate of $7,350.

In February 2014, each of the CMA CGM Kingfish and the CMA CGM Marlin extended
their time charters with CMA CGM, for an additional period of 4 to 7 months,
commencing on March 15, 2014 and March 20, 2014, respectively, each at a gross
daily charter rate of $7,000.

Pursuant to our chartering strategy, we focus on containerships with carrying
capacities ranging from 1,700 TEU to 7,000 TEU employed on short- to
medium-term time charters of one to five years with staggered maturities,
which provide us with the benefit of stable cash flows from a diversified
portfolio of charterers, while preserving the flexibility to capitalize on
potentially rising rates when the current time charters expire. We may also,
under certain circumstances, opportunistically enter our vessels into
shorter-term charters or our vessels may operate on the spot market. Based on
the earliest redelivery dates, and following the extensions of charters
discussed above, the Company has secured under such contracts 61% and 20% of
its fleet capacity for the remainder of 2014 and 2015, respectively. For
future updates on the employment of our vessels, please visit the employment
section of our website at www.box-ships.com/fleet-employment.php. The
information contained on the Company's website does not constitute part of
this press release.

Fleet List:

The following table provides additional information about our fleet as of
March 11, 2014.

                     Year                     Daily Gross Charter
Vessel               Built TEU    Charterer   Charter     Expiration (2) Notes
                                              Rate (1)
Box Voyager          2010  3,426  CNC         $6,850      March 2014     3
                                              $7,350      September 2014
Box Trader           2010  3,426  Hapag Lloyd $8,000      March 2014     4
CMA CGM Kingfish     2007  5,095  CMA CGM     $23,000     March 2014     5
                                              $7,000      July 2014
CMA CGM Marlin       2007  5,095  CMA CGM     $23,000     March 2014     5
                                              $7,000      July 2014
Box Queen (ex Maersk 2006  4,546  MSC         $6,100      September 2014 6
Diadema)
Maule                2010  6,589  CSAV        $38,000     April 2016     7
                                  Valparaiso
MSC Emma             2004  5,060  MSC         $28,500     July 2014      8
OOCL Hong Kong       1995  5,344  OOCL        $26,800     May 2015       8
OOCL China           1996  5,344  OOCL        $26,800     June 2015      8
Total                      43,925

Notes:
       Daily gross charter rates do not reflect commissions payable by us to
       third party chartering brokers and our Manager, totaling 5.00% for Box
1)     Queen, 4.75% for Box Voyager, CMA CGM Kingfish and  CMA CGM Marlin (in
       relation to the extensions of their charters), 1.25% for each of OOCL
       Hong Kong and OOCL China,  and 2.5% for each of the other vessels in
       our fleet, including, in each case, 1.25% to Allseas.
2)     Based on the earliest redelivery date.
3)     The employment is extended for a period of six to eight months,
       commencing in March 2014.
4)     The employment is for a period of five to seven months and commenced in
       October 2013.
5)     The employment is extended for a period of four to seven months,
       commencing in March 2014.
6)     The employment is for a period of eight to 10 months and commenced in
       January 2014.
       The charterer has the option to increase or decrease the term of the
       charter by 30 days. The charterer also has the option to purchase the
7)     vessel upon expiration of the charter, provided that the option is
       exercised at least six months prior to the expiration of the term of
       the charter, for a purchase price of $57.0 million, less a 0.5%
       purchase commission payable to parties unaffiliated to us.
8)     The charterer has the option to increase or decrease the term of the
       charter by 30 days.

Conference Call and Webcast details:

The Company's management will host a conference call to discuss its fourth
quarter and year ended December 31, 2013 results on March 12, 2014 at 9:00 am
ET.

Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: +1-877-300-8521 (USA) or +1-412-317-6026
(international).

A replay of the conference call will be available for seven days and can be
accessed by dialing +1-877-870-5176 (domestic) and +1-858-384-5517
(international) and using passcode 10042562.

There will also be a simultaneous live webcast over the Internet, through the
Company's website (www.box-ships.com). Participants in the live webcast should
register on the website approximately 15 minutes prior to the start of the
webcast.

About Box Ships Inc.:

Box Ships Inc. is an Athens, Greece-based international shipping company
specializing in the transportation of containers. The Company's current fleet
consists of nine containerships with a total carrying capacity of 43,925 TEU
and a TEU weighted average age of 9.1 years. The Company's common shares and
Series C Preferred Shares trade on the New York Stock Exchange under the
symbols "TEU" and "TEUPRC", respectively.

Cautionary Statement Regarding Forward-Looking Statement

Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance, and underlying assumptions
and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The
words "believe," "anticipate," "intends," "estimate," "forecast," "project,"
"plan," "potential," "may," "should," "expect," "pending" and similar
expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict
and are beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our
view, could cause actual results to differ materially from those discussed in
the forward-looking statements include the strength of world economies and
currencies, general market conditions, including fluctuations in charter rates
and vessel values, changes in demand for container 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. Please see our filings with the Securities and Exchange Commission
for a more complete discussion of these and other risks and uncertainties.

Contacts:

Box Ships Inc.
Robert Perri, CFA
Chief Financial Officer
Tel. +30 (210) 8914600
E-mail: ir@box-ships.com

Investor Relations / Media
Allen & Caron Inc.
Michael Mason (Investors)
Tel. +1 (212) 691-8087
E-mail: michaelm@allencaron.com

Len Hall (Media)
Tel. +1 (949) 474-4300
E-mail: len@allencaron.com

- Tables Follow –





                           Three Months Ended December Year Ended December 31,
SUMMARY FLEET INFORMATION  31,
                           2012          2013          2012        2013
FLEET DATA
Average number of vessels  9.00          9.00          8.01        9.00
^(1)
Calendar days for fleet    828           828           2,932       3,285
^(2)
Less:
Scheduled off-hire         -             -             44          19
Unscheduled off-hire       27            31            154         44
Operating days for fleet   801           797           2,734       3,222
^(3)
Fleet utilization ^(4)     96.7%         96.3%         93.2%       98.1%
AVERAGE DAILY RESULTS

(Expressed in United States Dollars)
Time charter equivalent    $21,276       $20,591       $23,177     $20,890
^(5)
Vessel operating expenses  $5,874        $5,622        $5,555      $5,478
^(6)
Management fees charged by $822          $871          $808        $847
a related party ^(7)
General and administrative $2,610        $3,303        $2,019      $2,215
expenses ^(8)
Total vessel operating     $9,306        $9,796        $8,382      $8,540
expenses ^(9)

    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 calendar days in the period.
(2) Calendar days are the total days we possessed the vessels in our fleet for
    the relevant period.
    Operating days for the fleet are the total calendar days the vessels were
    in our possession for the relevant period after subtracting off-hire days
(3) for scheduled dry-dockings or special or intermediate surveys and
    unscheduled off-hire days associated with repairs and other operational
    matters. Any idle days relating to the days a vessel remains unemployed
    are included in unscheduled off-hire days.
    Fleet utilization is the percentage of time that our vessels were able to
(4) generate revenues and is determined by dividing operating days by fleet
    calendar 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 determined by dividing time charter revenues, net of commissions
    and voyage expenses by operating days for the relevant time period. Voyage
    expenses primarily consist of extra war risk insurance, port, canal, fuel
(5) costs and other crew costs reimbursable by the charterers that are unique
    to a particular voyage and bunkers consumed during the periods that
    vessels are in between employment. TCE is a non-GAAP standard shipping
    industry performance measure used primarily to compare daily earnings
    generated by vessels 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,
    deck and engine stores, lubricating oil, insurance, other than extra war
(6) risk insurance, maintenance, repairs and amortization of intangibles, is
    calculated by dividing vessel operating expenses by fleet calendar days
    for the relevant time period.
(7) Daily management fees are calculated by dividing management fees charged
    by a related party by fleet calendar days for the relevant time period.
    Daily general and administrative expenses are calculated by dividing
(8) general and administrative expense by fleet calendar days for the relevant
    time period.
    Total vessel operating expenses ("TVOE") are a measurement of our total
    expenses, excluding dry-docking expenses, associated with operating our
(9) vessels. TVOE is the sum of vessel operating expenses, management fees and
    general and administrative expenses. Daily TVOE is calculated by dividing
    TVOE by fleet calendar days for the relevant time period.



Time Charter Equivalent
Reconciliation             Three Months Ended December Year Ended December 31,
                           31,
(Expressed in thousands of
U.S. Dollars, except days  2012          2013          2012        2013
and daily results)
Time Charter Revenues      $18,055       $17,249       $67,317     $71,305
Commissions                (367)         (358)         (1,429)     (1,469)
Voyage Expenses            (645)         (480)         (2,523)     (2,528)
Total Revenue, net of      $17,043       $16,411       $63,365     $67,308
voyage expenses
Plus: Amortization of
above/below market time    1,327         1,312         3,649       5,347
charters
Total Revenue, net of      $18,370       $17,723       $67,014     $72,655
voyage expenses, adjusted
Total operating days       801           797           2,734       3,222
Time Charter Equivalent    $21,276       $20,591       $23,177     $20,890
Time Charter Equivalent,   $22,933       $22,237       $24,512     $22,550
adjusted^(10)

     Time charter equivalent, adjusted ("TCE adjusted"), is a non-GAAP measure
     and is determined by dividing time charter revenues, net of commissions,
     voyage expenses and amortization of above/below market time charters
     attached to the vessels acquired, by operating days for the relevant time
     period. Voyage expenses primarily consist of extra war risk insurance,
     port, canal, fuel costs and other crew costs reimbursable by the
(10) charterers that are unique to a particular voyage. We believe that the
     presentation of TCE adjusted is useful to investors because it presents
     the TCE earned in the relevant period based on the contracted charter
     rates, excluding the amortization of above/below market time charters
     attached to the vessels acquired. The Company's definition of TCE
     adjusted may not be the same as that used by other companies in the
     shipping or other industries.





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

                           Three Months Ended December Year Ended December 31,
Net Income / Adjusted Net  31,
Income^(1)

(Expressed in thousands of 2012          2013          2012        2013
U.S. Dollars)
Net Income                 $2,874        $3,016        $13,176     $15,308
Plus: Amortization of      1,594         1,578         4,185       6,403
intangibles
Plus: Share-based          384           566           1,225       2,067
compensation
Adjusted Net Income        $4,852        $5,160        $18,586     $23,778
EBITDA / Adjusted
EBITDA^(1)
Net income                 $2,874        $3,016        $13,176     $15,308
Plus: Net Interest expense 2,211         1,977         8,474       8,295
Plus: Depreciation         4,165         3,815         15,027      15,136
EBITDA                     $9,250        $8,808        $36,677     $38,739
Plus: Amortization of      1,594         1,578         4,185       6,403
intangibles
Plus: Share-based          384           566           1,225       2,067
compensation
Adjusted EBITDA            $11,228       $10,952       $42,087     $47,209
Earnings per Common Share  Three Months Ended December
                           31,                         Year Ended December 31,
(Expressed in thousands of
U.S. Dollars, except share 2012          2013          2012        2013
and per share data)
Net income                 $2,874        $3,016        $13,176     $15,308
Less: Dividends to Series  (468)         -             (1,238)     (1,077)
B-1 Preferred Shares
Less: Dividends to Series  -             (515)         -           (735)
C Preferred Shares
Less: Redemption of Series -             -             (1,763)     (2,063)
B-1 Preferred Shares
Less: Net income
attributable to non-vested (53)          (67)          (190)       (271)
share awards
Net income available to    $2,353        $2,434        $9,985      $11,162
common shareholders
Weighted average number of 20,322,504    24,433,067    17,980,980  23,587,529
common shares, basic
Earnings per common share, $0.12         $0.10         $0.56       $0.47
basic
Net income                 $2,874        $3,016        $13,176     $15,308
Less: Dividends to Series  (468)         -             (1,238)     (1,077)
B-1 Preferred Shares
Less: Dividends to Series  -             (515)         -           (735)
C Preferred Shares
Less: Redemption of Series -             -             (1,763)     (2,063)
B-1 Preferred Shares
Less: Net income
attributable to non-vested -             (67)          -           (271)
share awards
Plus: Dividends to Series
B-1 Preferred Shares, if   468           -             864         1,077
converted to common shares
Net income available to    $2,874        $2,434        $11,039     $12,239
common shareholders
Weighted average number of 25,648,582    24,433,067    20,396,633  26,720,680
common shares, diluted
Earnings per common share, $0.11         $0.10         $0.54       $0.46
diluted
Adjusted Earnings per
Common Share^(1)           Three Months Ended December Year Ended December 31,
                           31,
(Expressed in thousands of
U.S. Dollars, except share 2012          2013          2012        2013
and per share data)
Adjusted Net income        $4,852        $5,160        $18,586     $23,778
Less: Dividends to Series  (468)         -             (1,238)     (1,077)
B-1 Preferred Shares
Less: Dividends to Series  -             (515)         -           (735)
C Preferred Shares
Less: Adjusted Net income
attributable to non-vested (96)          (124)         (324)       (521)
share awards
Adjusted Net income
available to common        $4,288        $4,521        $17,024     $21,445
shareholders
Weighted average number of 20,322,504    24,433,067    17,980,980  23,587,529
common shares, basic
Adjusted Earnings per      $0.21         $0.19         $0.95       $0.91
common share, basic
Adjusted Net income        $4,852        $5,160        $18,586     $23,778
Less: Dividends to Series  (468)         -             (1,238)     (1,077)
B-1 Preferred Shares
Less: Dividends to Series  -             (515)         -           (735)
C Preferred Shares
Less: Adjusted Net income
attributable to non-vested -             (124)         -           (521)
share awards
Plus: Dividends to Series
B-1 Preferred Shares, if   468           -             864         1,077
converted to common shares
Adjusted Net income
available to common        $4,852        $4,521        $18,212     $22,522
shareholders
Weighted average number of 25,648,582    24,433,067    20,396,633  26,720,680
common shares, diluted
Adjusted Earnings per      $0.19         $0.19         $0.89       $0.84
common share, diluted

    The Company considers EBITDA to represent net income plus net interest
    expense and depreciation and amortization. The Company's management uses
    EBITDA as a performance measure. The Company believes that EBITDA is
    useful to investors because the shipping industry is capital intensive and
(1) may involve significant financing costs. The Company excluded non-cash
    items in relation to the amortization of intangibles and share-based
    compensation to derive to Adjusted EBITDA because the Company believes
    that these adjustments provide additional information on the fleet
    operational results which may be useful to investors.
    The Company excluded non-cash items in relation to the amortization of
    intangibles and share-based compensation from net income to derive to
    Adjusted Net Income and Adjusted EPS. The impact of the redemption of
    preferred shares has been excluded from Adjusted Net Income available to
    common shareholders for the calculation of Adjusted EPS due to the
    one-time nature of this redemption. The Company believes that Adjusted Net
    Income and Adjusted EPS provide additional information on the fleet
    operational results which may be useful to investors.
    EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are items
    not recognized by U.S. GAAP and should not be considered as an alternative
    to net income, operating income, earnings per share or any other indicator
    of a Company's operating performance required by U.S. GAAP. The Company's
    definition of EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted
    EPS may not be the same as that used by other companies in the shipping or
    other industries.





BOX SHIPS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of U.S. Dollars, except per share data)
                                   Three Months Ended
                                                       Year Ended December 31,
                                   December 31,
                                   2012       2013     2012          2013
REVENUES:
Time charter revenues ^(1)         18,055     17,249   67,317        71,305
Commissions                        (367)      (358)    (1,429)       (1,469)
Net Revenues                       17,688     16,891   65,888        69,836
EXPENSES / (INCOME):
Voyage expenses                    645        480      2,523         2,528
Vessels operating expenses ^(2)    4,864      4,655    16,287        17,995
Dry-docking expenses               56         -        2,062         1,010
Management fees charged by a       681        721      2,370         2,783
related party
Depreciation                       4,165      3,815    15,027        15,136
General and administrative         2,161      2,735    5,921         7,276
expenses ^(3)
Insurance claims recoveries        -          (523)    -             (523)
Operating income                   5,116      5,008    21,698        23,631
OTHER INCOME (EXPENSES):
Interest and finance costs         (2,213)    (1,977)  (8,490)       (8,299)
Interest income                    2          -        16            4
Foreign currency loss, net         (31)       (15)     (48)          (28)
Total other expenses, net          (2,242)    (1,992)  (8,522)       (8,323)
NET INCOME                         2,874      3,016    13,176        15,308
Other Comprehensive Income /
(Loss)
Unrealized gain / (loss) on cash   106        6        (652)         568
flow hedges
Total Other Comprehensive Income / 106        6        (652)         568
(Loss)
COMPREHENSIVE INCOME               2,980      3,022    12,524        15,876
Earnings per common share, basic   $0.12      $0.10    $0.56         $0.47
Earnings per common share, diluted $0.11      $0.10    $0.54         $0.46

Footnotes:
    includes amortization of below and above market acquired time charters of
(1) $1,327 and $1,312 for the three months ended December 31, 2012 and 2013,
    respectively, and $3,649 and $5,347 for the year ended December 31, 2012
    and 2013, respectively
    includes amortization of other intangible assets of $266 and $266 for the
(2) three months ended December 31, 2012 and 2013, respectively, and $536 and
    $1,056 for the year ended December 31, 2012 and 2013, respectively
    includes share-based compensation of $384 and $566 for the three months
(3) ended December 31, 2012 and 2013, respectively, and $1,225 and $2,067 for
    the year ended December 31, 2012 and 2013, respectively





BOX SHIPS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars)
                                          December 31, 2012  December 31, 2013
ASSETS
Cash and restricted cash (current and     17,141             24,512
non-current)
Other current assets                      6,697              7,189
Vessels and other fixed assets, net and   421,226            397,905
other non-current assets
Total Assets                              445,064            429,606
LIABILITIES AND STOCKHOLDERS' EQUITY
Total debt ^(1)                           216,250            179,550
Total other liabilities                   8,035              5,337
Total stockholders' equity                220,779            244,719
Total Liabilities and Stockholders'       445,064            429,606
Equity

Footnotes:
(1) Refer to Liquidity section, above

SOURCE Box Ships Inc.

Website: http://www.box-ships.com
 
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