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06.08.2013 22:05:00
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Paragon Shipping Inc. Reports Second Quarter And Six Months Ended June 30, 2013 Results
ATHENS, Greece, Aug. 6, 2013 /PRNewswire/ -- Paragon Shipping Inc. (NASDAQ: PRGN) ("Paragon Shipping" or the "Company"), a global shipping transportation company specializing in drybulk cargoes, announced today its results for the second quarter and six months ended June 30, 2013.
Financial Highlights
(Expressed in United States Dollars where applicable)
Quarter Ended June 30, 2012 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2012 | Six Months Ended June 30, 2013 | |
Average number of vessels | 10.8 | 13.0 | 10.4 | 12.8 |
Time charter equivalent rate (TCE) (1) | 11,866 | 10,476 | 12,910 | 10,930 |
Net Revenue | 11,949,526 | 13,878,268 | 24,426,712 | 27,331,630 |
EBITDA (1) | 6,349,055 | 6,196,088 | 12,971,559 | 8,747,494 |
Adjusted EBITDA (1) | 6,637,339 | 6,119,016 | 13,673,923 | 9,301,454 |
Net Income / (Loss) | 179,354 | 17,032 | 899,191 | (3,494,070) |
Adjusted Net Income / (Loss) (1) | 467,638 | (60,040) | 1,601,555 | (2,940,110) |
Earnings / (Loss) per common share basic and diluted (2) | 0.03 | 0.00 | 0.15 | (0.31) |
Adjusted Earnings / (Loss) per common share basic and diluted (1), (2) | 0.08 | (0.01) | 0.26 | (0.26) |
(1) | Please see the table at the back of this release for a reconciliation of TCE to Charter Revenue, EBITDA and Adjusted EBITDA to Net Income / (Loss), Adjusted Net Income / (Loss) to Net Income / (Loss) and Adjusted Earnings / (Loss) per common share to Earnings / (Loss) per common share, the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). |
(2) | All per-share figures in this table and in our financial results reported below have been adjusted to give effect to the 10-for-1 reverse stock split that became effective on November 5, 2012. |
Management Commentary
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, "We are pleased to announce our results for the quarter and six months ended June 30, 2013. For the second quarter of 2013, the Company's net results were once again positive, compared to the net loss of $3.5 million that we reported in the first quarter of 2013. Our EBITDA for the quarter was $6.2 million, while on average we operated 13.0 vessels with a utilization rate, after excluding scheduled dry-dockings, of 100%."
Mr. Bodouroglou continued, "As per our financing update, we successfully secured the financing of our outstanding newbuilding program by signing, subject to certain contingencies and conditions, a new credit facility of up to $69.0 million with China Development Bank to partially finance our two 4,800 TEU containerships currently under construction, and by amending our syndicated secured loan facility led by Nordea in order to remove any restrictions from drawing down the loan."
Mr. Bodouroglou concluded, "Although the drybulk shipping market continues to be challenging, sentiment has already started to improve. We believe we have positioned the Company to take advantage of any upside opportunities that may arise in the forthcoming future."
Second Quarter 2013 Financial Results
Gross charter revenue for the second quarter of 2013 was $14.7 million, compared to $12.7 million for the second quarter of 2012. The Company reported a net income of $17,032, or less than $0.01 per basic and diluted share, for the second quarter of 2013, calculated based on 11,041,107 and 11,133,500 weighted average number of basic and diluted shares outstanding for the period, respectively, and reflecting the impact of the non-cash items discussed below. For the second quarter of 2012, the Company reported net income of $0.2 million, or $0.03 per basic and diluted share, calculated based on 5,920,832 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, the adjusted net loss for the second quarter of 2013 was $0.1 million, or $0.01 per basic and diluted share, compared to adjusted net income of $0.5 million, or $0.08 per basic and diluted share, for the second quarter of 2012.
EBITDA for the second quarter of 2013 was $6.2 million, compared to $6.3 million for the second quarter of 2012. EBITDA for the second quarter of 2013 was calculated by adding the net income of $17,032 to net interest expense, including interest expense from interest rate swaps, and depreciation that in the aggregate amounted to $6.2 million. Adjusted EBITDA, excluding all non-cash items described below, was $6.1 million for the second quarter of 2013, compared to $6.6 million for the second quarter of 2012.
The Company operated an average of 13.0 vessels during the second quarter of 2013, earning an average TCE rate of $10,476 per day, compared to an average of 10.8 vessels during the second quarter of 2012, earning an average TCE rate of $11,866 per day.
Total adjusted operating expenses for the second quarter of 2013 equaled $9.3 million, or approximately $7,900 per vessel per day, which include vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, and exclude share-based compensation for the period of $0.2 million. For the second quarter of 2012, total adjusted operating expenses were $6.7 million, or approximately $6,858 per vessel per day, which include the items mentioned above, and exclude share-based compensation of $0.8 million.
As of June 30, 2013, the Company owned approximately 13.8% of the outstanding common stock of Box Ships Inc. (NYSE: TEU) ("Box Ships"), a former wholly-owned subsidiary of the Company which successfully completed its initial public offering in April 2011. The investment in Box Ships is accounted for under the equity method and is separately reflected on the Company's unaudited condensed consolidated balance sheets. For the second quarter of 2013, the Company recorded income of $0.4 million, representing its share of Box Ships' net income for the period, compared to $0.4 million for the second quarter of 2012. In the second quarter of 2013, we received a cash amount of $0.4 million, representing dividend distributions from Box Ships, compared to $1.0 million received in the second quarter of 2012.
On March 28, 2013, the Seoul Central District Court approved an amended Korea Line Corporation ("KLC") rehabilitation plan, under which nine-tenths of the remaining cash payments due to the Company under the agreement will be paid in shares of KLC rather than in cash. In addition, a 15-for-1 reverse stock split over the outstanding shares of KLC was approved. On May 9, 2013, the 15-for-1 reverse stock split was effectuated and accordingly, the number of KLC shares held by the Company was adjusted from 111,201 to 7,413. In addition, pursuant to the amended KLC rehabilitation plan, on May 9, 2013, 58,483 additional shares of KLC were issued to the Company, which will be secured at the Korean Security Depository until November 10, 2013, increasing the total number of KLC shares held by the Company to 65,896 on a reverse stock split adjusted basis. For the three months ended June 30, 2013, the Company recorded a gain from marketable securities of $3.1 million, representing the fair value of the 58,483 additional KLC shares, based on the closing price of KLC shares as of May 9, 2013, the date of issuance.
Second Quarter 2013 Non-cash Items
The Company's results for the three months ended June 30, 2013 included the following non-cash items:
- An unrealized gain on interest rate swaps of $0.3 million, or $0.03 per basic and diluted share.
- Non-cash expenses of $0.2 million, or $0.02 per basic and diluted share, relating to the amortization of the compensation cost recognized for non-vested share awards issued to executive officers, directors and employees.
In the aggregate, these non-cash items increased the Company's earnings by $0.1 million, which represents a $0.01 increase in earnings per basic and diluted share, for the three months ended June 30, 2013.
Six months ended June 30, 2013 Financial Results
Gross charter revenue for the six months ended June 30, 2013 was $28.9 million, compared to $25.9 million for the six months ended June 30, 2012. The Company reported a net loss of $3.5 million, or $0.31 per basic and diluted share, for the six months ended June 30, 2013, calculated based on 11,016,733 weighted average number of basic and diluted shares outstanding for the period and reflecting the impact of the non-cash items discussed below. For the six months ended June 30, 2012, the Company reported net income of $0.9 million, or $0.15 per basic and diluted share, calculated based on 5,913,195 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, the adjusted net loss for the six months ended June 30, 2013 was $2.9 million, or $0.26 per basic and diluted share, compared to adjusted net income of $1.6 million, or $0.26 per basic and diluted share, for the six months ended June 30, 2012.
EBITDA for the six months ended June 30, 2013 was $8.7 million, compared to $13.0 million for the six months ended June 30, 2012. EBITDA for the six months ended June 30, 2013 was calculated by adding the net loss of $3.5 million to net interest expense, including interest expense from interest rate swaps, and depreciation that in the aggregate amounted to $12.2 million. Adjusted EBITDA, excluding all non-cash items described below, was $9.3 million for the six months ended June 30, 2013, compared to $13.7 million for the six months ended June 30, 2012.
The Company operated an average of 12.8 vessels during the six months ended June 30, 2013, earning an average TCE rate of $10,930 per day, compared to an average of 10.4 vessels during the six months ended June 30, 2012, earning an average TCE rate of $12,910 per day.
Total adjusted operating expenses for the six months ended June 30, 2013 equaled $19.5 million, or approximately $8,399 per vessel per day, which include vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, and exclude share-based compensation for the period of $0.7 million. For the six months ended June 30, 2012, total adjusted operating expenses were $13.4 million, or approximately $7,070 per vessel per day, which include the items mentioned above, and exclude share-based compensation of $1.6 million.
For the six months ended June 30, 2013, the Company recorded income of $1.0 million, representing its share of Box Ships' net income for the period, compared to $1.4 million for the six months ended June 30, 2012. In the six months ended June 30, 2013, we received a cash amount of $1.2 million, representing dividend distributions from Box Ships, compared to $2.1 million received in the six months ended June 30, 2012.
In the six months ended June 30, 2013, the Company recorded a non-cash loss of $0.4 million relating to the dilution effect from the Company's non-participation in the public offering by Box Ships of 4,000,000 of Box Ships' common shares, which was completed on March 18, 2013.
Pursuant to the amended KLC rehabilitation plan, in the six months ended June 30, 2013, the Company recorded a gain from marketable securities of $3.1 million, representing the fair value of the 58,483 additional KLC shares issued to the Company, based on the closing price of KLC shares as of May 9, 2013, the date of issuance as discussed above.
Six months ended June 30, 2013 Non-cash Items
The Company's results for the six months ended June 30, 2013 included the following non-cash items:
- Loss on investment in affiliate of $0.4 million, or $0.04 per basic and diluted share.
- An unrealized gain on interest rate swaps of $0.5 million, or $0.05 per basic and diluted share.
- Non-cash expenses of $0.7 million, or $0.06 per basic and diluted share, relating to share based compensation to the management company amounting to $0.3 million and to the amortization of the compensation cost recognized for non-vested share awards issued to executive officers, directors and employees amounting to $0.4 million.
In the aggregate, these non-cash items decreased the Company's earnings by $0.6 million, which represents a $0.05 decrease in earnings per basic and diluted share, for the six months ended June 30, 2013.
Cash Flows
For the six months ended June 30, 2013, the Company generated net cash from operating activities of $1.9 million, compared to $7.4 million for the six months ended June 30, 2012. For the six months ended June 30, 2013, net cash used in investing activities was $41,292 and net cash used in financing activities was $7.9 million. For the six months ended June 30, 2012, net cash used in investing activities was $22.0 million and net cash from financing activities was $7.7 million.
Time Charter Coverage Update
Pursuant to our chartering strategy, for as long as time charter rates remain weak we will continue to employ our vessels on short-term time charters or voyage charters, which generally last for periods of ten days to four months, to be in a position to take advantage of any strengthening of the spot market when the charter market recovers.
In July 2013, we agreed with Morgan Stanley Capital Group Inc., the charterer of the M/V Coral Seas and the M/V Deep Seas, on the early termination of the respective time charter agreements for a total cash compensation of $2.3 million. Under the terms of the original time charter agreements, the vessels were expected to be redelivered to the Company in December 2013 and July 2014, respectively. Based on the early termination agreement, both vessels will be redelivered to the Company by the end of August 2013. The total cash compensation of $2.3 million, which was paid in July 2013, was agreed based on the difference between the vessels' gross time charter rates under the respective time charter agreements, and the existing equivalent market time charter rates and therefore, the Company was paid in full for the difference between the two rates. Thus, assuming that charter rates do not deteriorate any further, the early termination agreement was on favorable terms for the Company, as it allows us to take advantage of any strengthening of the market that may occur over the next several months to one year.
Assuming all charter counterparties fully perform under the terms of the charters, based on the earliest redelivery datesand including our newbuilding vessels, we have secured employment for 37% and 4% of our fleet capacity for the remainder of 2013 and full year 2014, respectively.
Financing Update
On May 17, 2013, we signed an agreement with China Development Bank ("CDB") for a $69.0 million credit facility to partially finance our two 4,800 TEU containerships currently under construction, that are expected to be delivered in the third quarter of 2014. The drawdown of the facility is subject to certain customary and non-customary conditions, including obtaining shareholder approval by a guarantor. We cannot assure you that we or the guarantor will be able to satisfy such conditions or that we will be able to draw amounts under the facility. The CDB credit facility, which is available for drawdown upon the delivery of the vessels subject to certain contingencies and conditions precedent as discussed above, will be used to finance the lower of 60% of the construction cost of the vessels, or 80% of the vessels' market value at delivery. The facility matures ten years after the drawdown date. In relation to the option we have granted to Box Ships Inc. (NYSE: TEU) to acquire the two 4,800 TEU containerships, the facility can be freely transferred to Box Ships Inc. in the event such option is declared.
In addition, on June 18, 2013, we signed an amendment agreement with the syndicate led by Nordea Bank Finland Plc ("Nordea"), in relation to our secured loan facility dated May 5, 2011. Based on the amendment agreement, the condition precedent under which the drawdown of the outstanding portion of the loan was subject to the prepayment of the Company's outstanding loan to Box Ships Inc. was removed.
Loan Agreement with Box Ships (May 27, 2011)
Pursuant to the loan agreement with Box Ships, as amended on March 11, 2013, on July 19, 2013, Box Ships proceeded with a quarterly principal installment payment of $1.0 million. In addition, on August 5, 2013, Box Ships prepaid an amount of $5.0 million and reduced the outstanding balance of the respective loan to $6.0 million.
Conference Call and Webcast details
The Company's management team will host a conference call to discuss its second quarter and six months ended June 30, 2013 results on August 7, 2013 at 9:00 am Eastern Time.
Participants should dial into the call ten minutes before the scheduled time using the following numbers 1-877-300-8521 (USA) or +1-412-317-6026 (international) to access the call. A replay of the conference call will be available for seven days and can be accessed by dialing 1-877-870-5176 (USA) or +1-858-384-5517 (international) and using passcode 105684.
Slides and audio webcast
There will also be a simultaneous live webcast through the Company's website, www.paragonship.com. Participants should register on the website approximately ten minutes prior to the start of the webcast. If you would like a copy of the release mailed or faxed, please contact Allen & Caron Investor Relations at 212-691-8087.
About Paragon Shipping Inc.
Paragon Shipping is an international shipping company incorporated under the laws of the Republic of the Marshall Islands with executive offices in Athens, Greece, specializing in the transportation of drybulk cargoes. The Company's current fleet consists of thirteen drybulk vessels with a total carrying capacity of 816,472 dwt. In addition, the Company's current newbuilding program consists of one Handysize drybulk carrier that is scheduled to be delivered in the fourth quarter of 2013 and two 4,800 TEU containerships that are scheduled to be delivered in 2014. Paragon Shipping has granted Box Ships Inc., an affiliated company, the option to acquire its two containerships under construction. For more information, visit: www.paragonship.com. The information contained on the Company's website does not constitute part of this press release.
Forward-Looking Statements
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, without limitation, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for drybulk shipping capacity, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors, as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov.
Contacts:
Paragon Shipping Inc.
Robert Perri, CFA
Chief Financial Officer
ir@paragonshipping.gr
Allen & Caron Inc.
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087
Len Hall (Media)
len@allencaron.com
(949) 474-4300
- Tables Follow -
Fleet List
Drybulk Fleet
The following tables represent our drybulk fleet and the drybulk newbuilding vessels that we have agreed to acquire as of August 6, 2013.
Operating Drybulk Fleet
Name | Type | Dwt | Year Built |
Panamax | |||
Dream Seas | Panamax | 75,151 | 2009 |
Coral Seas | Panamax | 74,477 | 2006 |
Golden Seas | Panamax | 74,475 | 2006 |
Pearl Seas | Panamax | 74,483 | 2006 |
Diamond Seas | Panamax | 74,274 | 2001 |
Deep Seas | Panamax | 72,891 | 1999 |
Calm Seas | Panamax | 74,047 | 1999 |
Kind Seas | Panamax | 72,493 | 1999 |
Total Panamax | 8 | 592,291 | |
Supramax | |||
Friendly Seas | Supramax | 58,779 | 2008 |
Sapphire Seas | Supramax | 53,702 | 2005 |
Total Supramax | 2 | 112,481 | |
Handysize | |||
Prosperous Seas | Handysize | 37,293 | 2012 |
Precious Seas | Handysize | 37,205 | 2012 |
Priceless Seas | Handysize | 37,202 | 2013 |
Total Handysize | 3 | 111,700 | |
Grand Total | 13 | 816,472 | |
Drybulk Newbuildings that we have agreed to acquire
Hull no. | Type | Dwt | Expected Delivery |
Handysize | |||
Hull no. 625 | Handysize | 37,200 | Q4 2013 |
Total Handysize | 1 | 37,200 | |
Containership Fleet
The following table represents the containership newbuilding vessels that we have agreed to acquire as of August 6, 2013.
Containership Newbuildings that we have agreed to acquire
Hull no. | TEU | Dwt | Expected Delivery |
Hull no. 656 (1) | 4,800 | 56,500 | Q3 2014 |
Hull no. 657 (1) | 4,800 | 56,500 | Q3 2014 |
Total | 9,600 | 113,000 |
(1) | The Company has granted to Box Ships an option to purchase. |
Summary Fleet Data | ||
Quarter Ended June 30, 2012 | Quarter Ended June 30, 2013 | |
FLEET DATA | ||
Average number of vessels (1) | 10.8 | 13.0 |
Calendar days for fleet (2) | 981 | 1,183 |
Available days for fleet (3) | 981 | 1,135 |
Operating days for fleet (4) | 974 | 1,135 |
Fleet utilization (5) | 99.3% | 100.0% |
AVERAGE DAILY RESULTS | ||
Time charter equivalent (6) | 11,866 | 10,476 |
Vessel operating expenses (7) | 4,604 | 4,661 |
Dry-docking expenses (8) | - | 1,037 |
Management fees - related party adjusted (9) | 998 | 1,004 |
General and administrative expenses adjusted (10) | 1,256 | 1,198 |
Total vessel operating expenses adjusted (11) | 6,858 | 7,900 |
Six Months Ended June 30, 2012 | Six Months Ended June 30, 2013 | |
FLEET DATA | ||
Average number of vessels (1) | 10.4 | 12.8 |
Calendar days for fleet (2) | 1,891 | 2,325 |
Available days for fleet (3) | 1,891 | 2,260 |
Operating days for fleet (4) | 1,882 | 2,258 |
Fleet utilization (5) | 99.5% | 99.9% |
AVERAGE DAILY RESULTS | ||
Time charter equivalent (6) | 12,910 | 10,930 |
Vessel operating expenses (7) | 4,667 | 4,557 |
Dry-docking expenses (8) | - | 730 |
Management fees - related party adjusted (9) | 1,016 | 1,010 |
General and administrative expenses adjusted (10) | 1,387 | 2,102 |
Total vessel operating expenses adjusted (11) | 7,070 | 8,399 |
(1) | Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of our fleet during the period divided by the number of days in the period. |
(2) | Calendar days for the fleet are the total days the vessels were in our possession for the relevant period. |
(3) | Available days for the fleet are the total calendar days for the relevant period less any off-hire days associated with scheduled dry-dockings or special or intermediate surveys. |
(4) | Operating days for the fleet are the total available days for the relevant period less any off-hire days due to any reason, other than scheduled dry-dockings or special or intermediate surveys, including unforeseen circumstances. Any idle days relating to the days a vessel remains unemployed are included in operating days. |
(5) | Fleet utilization is the percentage of time that our vessels were able to generate revenues and is determined by dividing operating days by fleet available days for the relevant period. |
(6) | Time charter equivalent ("TCE") is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing Net Revenue generated from charters less voyage expenses by operating days for the relevant time period. Voyage expenses consist of all costs that are unique to a particular voyage, primarily including port expenses, canal dues, war risk insurances and fuel costs, net of gains or losses from the sale of bunkers to charterers. TCE is a non-GAAP standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot voyage charters, time charters and bareboat charters) under which the vessels may be employed between the periods. |
(7) | Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. |
(8) | Daily dry-docking expenses are calculated by dividing dry-docking expenses by fleet calendar days for the relevant time period. |
(9) | Daily management fees - related party adjusted are calculated by dividing management fees charged by a related party, excluding share based compensation to the management company, by fleet calendar days for the relevant time period. |
(10) | Daily general and administrative expenses adjusted are calculated by dividing general and administrative expenses, excluding non-cash expenses relating to the amortization of the share based compensation cost for non-vested share awards, by fleet calendar days for the relevant time period. |
(11) | Total vessel operating expenses ("TVOE") is a measurement of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses, dry-docking expenses, management fees and general and administrative expenses. Daily TVOE adjusted is calculated by dividing TVOE, excluding non-cash expenses relating to the amortization of the share based compensation cost for non-vested share awards and share based compensation to the management company, by fleet calendar days for the relevant time period. |
Time Charter Equivalents Reconciliation | ||
Quarter Ended June 30, 2012 | Quarter Ended June 30, 2013 | |
Charter Revenue | 12,662,352 | 14,683,907 |
Commissions | (712,826) | (805,639) |
Voyage Expenses, net | (391,989) | (1,988,136) |
Net Revenue, net of voyage expenses | 11,557,537 | 11,890,132 |
Total operating days | 974 | 1,135 |
Time Charter Equivalent | 11,866 | 10,476 |
Six Months Ended June 30, 2012 | Six Months Ended June 30, 2013 | |
Charter Revenue | 25,856,283 | 28,909,224 |
Commissions | (1,429,571) | (1,577,594) |
Voyage Expenses, net | (129,941) | (2,652,799) |
Net Revenue, net of voyage expenses | 24,296,771 | 24,678,831 |
Total operating days | 1,882 | 2,258 |
Time Charter Equivalent | 12,910 | 10,930 |
Condensed Cash Flow Information (Unaudited) | ||
Six Months Ended June 30, 2012 | Six Months Ended June 30, 2013 | |
Cash and Cash Equivalents, beginning of period | 14,563,517 | 17,676,885 |
Cash generated from / (used in): | ||
Operating Activities | 7,386,684 | 1,947,671 |
Investing Activities | (21,974,810) | (41,292) |
Financing Activities | 7,708,147 | (7,886,606) |
Net decrease in Cash and Cash Equivalents | (6,879,979) | (5,980,227) |
Cash and Cash Equivalents, end of period | 7,683,538 | 11,696,658 |
Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial Information
EBITDA and Adjusted EBITDA Reconciliation (1) | ||
Quarter Ended June 30, 2012 | Quarter Ended June 30, 2013 | |
Net Income | 179,354 | 17,032 |
Plus Net interest expense, including interest expense from interest rate swaps | 2,113,949 | 1,928,089 |
Plus Depreciation | 4,055,752 | 4,250,967 |
EBITDA | 6,349,055 | 6,196,088 |
Adjusted EBITDA Reconciliation | ||
Net Income | 179,354 | 17,032 |
Unrealized gain on interest rate swaps | (509,701) | (271,217) |
Non-cash expenses from the amortization of share based compensation cost recognized | 797,985 | 194,145 |
Adjusted Net Income / (Loss) | 467,638 | (60,040) |
Plus Net interest expense, including interest expense from swaps | 2,113,949 | 1,928,089 |
Plus Depreciation | 4,055,752 | 4,250,967 |
Adjusted EBITDA | 6,637,339 | 6,119,016 |
Six Months Ended June 30, 2012 | Six Months Ended June 30, 2013 | |
Net Income / (Loss) | 899,191 | (3,494,070) |
Plus Net interest expense, including interest expense from interest rate swaps | 4,129,751 | 3,856,259 |
Plus Depreciation | 7,942,617 | 8,385,305 |
EBITDA | 12,971,559 | 8,747,494 |
Adjusted EBITDA Reconciliation | ||
Net Income / (Loss) | 899,191 | (3,494,070) |
Loss on investment in affiliate | - | 390,821 |
Unrealized gain on interest rate swaps | (891,635) | (508,816) |
Non-cash expenses from the amortization of share based compensation cost recognized and share based compensation to the management company | 1,593,999 | 671,955 |
Adjusted Net Income / (Loss) | 1,601,555 | (2,940,110) |
Plus Net interest expense, including interest expense from swaps | 4,129,751 | 3,856,259 |
Plus Depreciation | 7,942,617 | 8,385,305 |
Adjusted EBITDA | 13,673,923 | 9,301,454 |
(1) | The Company considers EBITDA to represent Net Income / (Loss) plus net interest expense, including interest expense from interest rate swaps, and depreciation and amortization. The Company's management uses EBITDA and Adjusted EBITDA as a performance measure. EBITDA and Adjusted EBITDA are not items recognized by U.S. GAAP and should not be considered as an alternative to Net Income / (Loss), Operating Income / (Loss) or any other indicator of a Company's operating performance required by U.S. GAAP. The Company's definition of EBITDA and Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries. The Company believes that EBITDA is useful to investors because the shipping industry is capital intensive and may involve significant financing costs. The Company excluded non-cash items to derive the Adjusted Net Income / (Loss) and the Adjusted EBITDA because the Company believes that these adjustments provide additional information on the fleet operational results. |
Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial Information
Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share Reconciliation | ||
U.S. GAAP Financial Information | Quarter Ended June 30, 2012 | Quarter Ended June 30, 2013 |
Net Income | 179,354 | 17,032 |
Net Income attributable to non-vested share awards | 5,252 | 422 |
Net Income available to common shareholders | 174,102 | 16,610 |
Weighted average number of common shares basic (2) | 5,920,832 | 11,041,107 |
Weighted average number of common shares diluted (2) | 5,920,832 | 11,133,500 |
Earnings per common share basic and diluted (2) | 0.03 | 0.00 |
Reconciliation of Net Income to Adjusted Net Income / (Loss) | ||
Net Income | 179,354 | 17,032 |
Unrealized gain on interest rate swaps | (509,701) | (271,217) |
Non-cash expenses from the amortization of share based compensation cost recognized | 797,985 | 194,145 |
Adjusted Net Income / (Loss) (1) | 467,638 | (60,040) |
Adjusted Net Income / (Loss) attributable to non-vested share awards | 13,694 | (1,487) |
Adjusted Net Income / (Loss) available to common shareholders | 453,944 | (58,553) |
Weighted average number of common shares basic (2) | 5,920,832 | 11,041,107 |
Weighted average number of common shares diluted (2) | 5,920,832 | 11,133,500 |
Adjusted Earnings / (Loss) per common share basic and diluted (1), (2) | 0.08 | (0.01) |
(1) | Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share are not items recognized by U.S. GAAP and should not be considered as alternatives to Net Income / (Loss) and Earnings / (Loss) per common share, respectively, or any other indicator of a Company's operating performance required by U.S. GAAP. The Company excluded non-cash items to derive at the Adjusted Net Income / (Loss) and the Adjusted Earnings / (Loss) per common share basic and diluted because the Company believes that these adjustments provide additional information on the fleet operational results. The Company's definition of Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share may not be the same as that used by other companies in the shipping or other industries. |
(2) | Adjusted to give effect to the 10-for-1 reverse stock split that became effective on November 5, 2012. |
Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial Information
Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share Reconciliation | ||
U.S. GAAP Financial Information | Six Months Ended June 30, 2012 | Six Months Ended June 30, 2013 |
Net Income / (Loss) | 899,191 | (3,494,070) |
Net Income / (Loss) attributable to non-vested share awards | 27,295 | (66,236) |
Net Income / (Loss) available to common shareholders | 871,896 | (3,427,834) |
Weighted average number of common shares basic and diluted (2) | 5,913,195 | 11,016,733 |
Earnings / (Loss) per common share basic and diluted (2) | 0.15 | (0.31) |
Reconciliation of Net Income / (Loss) to Adjusted Net Income / (Loss) | ||
Net Income / (Loss) | 899,191 | (3,494,070) |
Loss on investment in affiliate | - | 390,821 |
Unrealized gain on interest rate swaps | (891,635) | (508,816) |
Non-cash expenses from the amortization of share based compensation cost recognized and share based compensation to the management company | 1,593,999 | 671,955 |
Adjusted Net Income / (Loss) (1) | 1,601,555 | (2,940,110) |
Adjusted Net Income / (Loss) attributable to non-vested share awards | 48,615 | (55,735) |
Adjusted Net Income / (Loss) available to common shareholders | 1,552,940 | (2,884,375) |
Weighted average number of common shares basic and diluted (2) | 5,913,195 | 11,016,733 |
Adjusted Earnings / (Loss) per common share basic and diluted (1), (2) | 0.26 | (0.26) |
(1) | Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share are not items recognized by U.S. GAAP and should not be considered as alternatives to Net Income / (Loss) and Earnings / (Loss) per common share, respectively, or any other indicator of a Company's operating performance required by U.S. GAAP. The Company excluded non-cash items to derive at the Adjusted Net Income / (Loss) and the Adjusted Earnings / (Loss) per common share basic and diluted because the Company believes that these adjustments provide additional information on the fleet operational results. The Company's definition of Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share may not be the same as that used by other companies in the shipping or other industries. |
(2) | Adjusted to give effect to the 10-for-1 reverse stock split that became effective on November 5, 2012. |
Paragon Shipping Inc. | ||||
Unaudited Condensed Consolidated Balance Sheets | ||||
As of December 31, 2012 and June 30, 2013 | ||||
(Expressed in United States Dollars) | ||||
December 31, 2012 | June 30, 2013 | |||
Assets | ||||
Cash and restricted cash (current and non-current) | 27,686,885 | 21,706,658 | ||
Vessels, net | 298,376,440 | 314,649,549 | ||
Advances for vessel acquisitions and vessels under construction | 49,592,684 | 27,249,315 | ||
Other fixed assets, net | 497,619 | 446,069 | ||
Investment in equity affiliate | 19,987,743 | 19,513,583 | ||
Loan to affiliate | 14,000,000 | 12,000,000 | ||
Other assets | 9,833,531 | 15,068,397 | ||
Total Assets | 419,974,902 | 410,633,571 | ||
Liabilities and Shareholders' Equity | ||||
Total debt | 195,542,176 | 188,328,551 | ||
Total other liabilities | 8,912,213 | 8,976,017 | ||
Total shareholders' equity | 215,520,513 | 213,329,003 | ||
Total Liabilities and Shareholders' Equity | 419,974,902 | 410,633,571 | ||
Paragon Shipping Inc. | ||||
Unaudited Condensed Consolidated Statements of Comprehensive (Loss) / Income | ||||
For the three months ended June 30, 2012 and 2013 | ||||
(Expressed in United States Dollars - except for share data) | ||||
Three Months Ended | Three Months Ended | |||
June 30, 2012 | June 30, 2013 | |||
Revenue | ||||
Charter revenue | 12,662,352 | 14,683,907 | ||
Commissions | (712,826) | (805,639) | ||
Net Revenue | 11,949,526 | 13,878,268 | ||
Expenses / (Income) | ||||
Voyage expenses, net | 391,989 | 1,988,136 | ||
Vessels operating expenses | 4,516,670 | 5,514,259 | ||
Dry-docking expenses | - | 1,227,093 | ||
Management fees - related party | 979,002 | 1,187,429 | ||
Depreciation | 4,055,752 | 4,250,967 | ||
General and administrative expenses | 2,029,736 | 1,611,452 | ||
Bad debt provisions | - | (17,166) | ||
Gain from marketable securities, net | (1,394,665) | (3,113,306) | ||
Operating Income | 1,371,042 | 1,229,404 | ||
Other Income / (Expenses) | ||||
Interest and finance costs | (1,605,428) | (1,859,602) | ||
(Loss) / gain on derivatives, net | (181,696) | 35,133 | ||
Interest income | 182,876 | 167,597 | ||
Equity in net income of affiliate | 375,170 | 410,183 | ||
Foreign currency gain | 37,390 | 34,317 | ||
Total Other Expenses, net | (1,191,688) | (1,212,372) | ||
Net Income | 179,354 | 17,032 | ||
Other Comprehensive (Loss) / Income | ||||
Unrealized (loss) / gain on cash flow hedges | (359,873) | 400,790 | ||
Transfer of realized loss on cash flow hedges to earnings | 36,118 | 78,087 | ||
Equity in other comprehensive income of affiliate | - | 91,270 | ||
Unrealized loss on change in fair value of marketable securities | (707,304) | (134,044) | ||
Total Other Comprehensive (Loss) / Income | (1,031,059) | 436,103 | ||
Comprehensive (Loss) / Income | (851,705) | 453,135 | ||
Earnings per Class A common share, basic and diluted (1) | $ 0.03 | $ 0.00 | ||
Weighted average number of Class A common shares, basic (1) | 5,920,832 | 11,041,107 | ||
Weighted average number of Class A common shares, diluted (1) | 5,920,832 | 11,133,500 | ||
(1) | Adjusted to give effect to the 10-for-1 reverse stock split that became effective on November 5, 2012. |
Paragon Shipping Inc. | ||||
Unaudited Condensed Consolidated Statements of Comprehensive Loss | ||||
For the six months ended June 30, 2012 and 2013 | ||||
(Expressed in United States Dollars - except for share data) | ||||
Six Months Ended | Six Months Ended | |||
June 30, 2012 | June 30, 2013 | |||
Revenue | ||||
Charter revenue | 25,856,283 | 28,909,224 | ||
Commissions | (1,429,571) | (1,577,594) | ||
Net Revenue | 24,426,712 | 27,331,630 | ||
Expenses / (Income) | ||||
Voyage expenses, net | 129,941 | 2,652,799 | ||
Vessels operating expenses | 8,824,891 | 10,594,953 | ||
Dry-docking expenses | - | 1,698,217 | ||
Management fees - related party | 1,922,177 | 2,683,090 | ||
Depreciation | 7,942,617 | 8,385,305 | ||
General and administrative expenses | 4,215,789 | 5,222,488 | ||
Gain from marketable securities, net | (1,394,665) | (3,113,306) | ||
Operating Income / (Loss) | 2,785,962 | (791,916) | ||
Other Income / (Expenses) | ||||
Interest and finance costs | (3,133,987) | (3,761,112) | ||
(Loss) / gain on derivatives, net | (481,590) | 20,126 | ||
Interest income | 377,461 | 393,543 | ||
Equity in net income of affiliate | 1,356,501 | 978,702 | ||
Loss on investment in affiliate | - | (390,821) | ||
Foreign currency (loss) / gain | (5,156) | 57,408 | ||
Total Other Expenses, net | (1,886,771) | (2,702,154) | ||
Net Income / (Loss) | 899,191 | (3,494,070) | ||
Other Comprehensive (Loss) / Income | ||||
Unrealized (loss) / gain on cash flow hedges | (440,917) | 403,710 | ||
Transfer of realized loss on cash flow hedges to earnings | 36,118 | 154,637 | ||
Equity in other comprehensive income of affiliate | - | 106,709 | ||
Unrealized loss on change in fair value of marketable securities | (707,304) | (10,922) | ||
Total Other Comprehensive (Loss) / Income | (1,112,103) | 654,134 | ||
Comprehensive Loss | (212,912) | (2,839,936) | ||
Earnings / (Loss) per Class A common share, basic and diluted (1) | $ 0.15 | ($0.31) | ||
Weighted average number of Class A common shares, basic and diluted (1) | 5,913,195 | 11,016,733 | ||
(1) | Adjusted to give effect to the 10-for-1 reverse stock split that became effective on November 5, 2012. |
SOURCE Paragon Shipping Inc.
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