ATHENS, Greece, Aug. 11, 2009 (GLOBE NEWSWIRE) -- Paragon Shipping Inc. (Nasdaq:PRGN), a global shipping transportation company specializing in drybulk cargoes, announced today its results for the second quarter and six months ended June 30, 2009.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, "We are pleased to announce another profitable quarter for Paragon with our strongest quarterly operating performance to date. This has been achieved through our significant charter coverage and disciplined approach to cost controls. On an adjusted basis, Paragon's financial performance during the second quarter of 2009 beat our 2008 second quarter results. Our fleet average timecharter income was higher, our daily expenses were lower and, as a consequence, our EBITDA was higher. As we previously announced, during the quarter we took advantage of the strengthening charter market by fixing the 'Calm Seas' and 'Coral Seas' on new two-year time charters. These new charter arrangements will increase our contractually fixed revenue days in 2010 and 2011 to 84% and 66%, respectively, providing us with significant stability in a potentially uncertain time in our markets. Gross contracted fleet revenue from our existing charters is approximately $323 million."
Mr. Bodouroglou concluded, "In addition, in August, we contracted to sell one of our oldest vessels, the 1995 built handymax bulkcarrier 'Blue Seas,' which is scheduled to be delivered to the buyers between September and December 2009. The vessel will be redelivered from the current charter in the fourth quarter of this year and therefore, we have taken the decision to sell the vessel at what we believe to be an opportune time of relative strength in asset values. Finally, I am pleased to announce that we will again pay a quarterly dividend to shareholders of $0.05 per share."
Second Quarter 2009 Financial Results:
Time charter revenue for the second quarter of 2009 was $42.3 million, compared to $40.6 million for the second quarter of 2008. The Company reported net income of $15.8 million, or $0.48 per basic and diluted share, for the second quarter of 2009, calculated on 32,816,789 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 second quarter of 2008, the Company reported net income of $24.6 million, or $0.91 per basic and diluted share, calculated on 26,927,648 weighted average number of basic shares and on 27,155,816 weighted average number of diluted shares.
Excluding all non-cash items described below, adjusted net income for the second quarter of 2009 was $16.6 million, or $0.50 and $0.51 per basic and diluted share, respectively. This compares to adjusted net income of $13.4 million, or $0.49 per basic and diluted share, for the second quarter of 2008. Please refer to the table at the back of this press release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share.
EBITDA was $27.2 million for the second quarter of 2009, compared to $35.6 million for the second quarter of 2008. This was calculated by adding to net income of $15.8 million for the second quarter of 2009, net interest expense and depreciation that in the aggregate amounted to $11.4 million for the second quarter of 2009. Adjusted EBITDA, excluding all non-cash items described below, was $27.3 million for the second quarter of 2009, compared to $23.7 million for the second quarter of 2008. Please see the table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated 12 vessels during the second quarter of 2009, earning an average time charter equivalent rate, or TCE rate, of $36,833 per day, compared to an average of 11 vessels during the second quarter of 2008, earning an average time charter equivalent rate of $39,027 per day. Please see the table at the back of this release for a reconciliation of TCE rates to time charter revenue.
Total adjusted operating expenses for the second quarter of 2009 were $6.6 million, or approximately $6,005 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $0.2 million of share-based compensation for the period. For the second quarter of 2008, total adjusted operating expenses were $7.8 million, or approximately $7,764 per day, including vessel operating expenses, management fees and general and administrative expenses and drydocking costs, but excluding $0.1 million of share-based compensation.
Second Quarter 2009 Non-cash Items
The Company's results for the three months ended June 30, 2009 included the following non-cash items:
* Non-cash revenue of $4.6 million and depreciation expense of $0.7 million associated with below market time charters attached to vessels acquired, which increases net revenue (amortized over the remaining period of the time charter) and increases depreciation expense (amortized over the remaining useful life of the vessel). These non-cash items contributed an aggregate of $3.9 million to net income, or $0.12 to basic and diluted earnings per share, for the three months ended June 30, 2009. * Impairment loss on the MV Blue Seas of $6.0 million, or $0.18 per basic and diluted share. * An unrealized gain from interest rate swaps of $1.4 million, or $0.04 per basic and diluted share, respectively, for the three months ended June 30, 2009. * Non-cash expenses of $0.2 million, or $0.01 per basic and diluted share, relating to the amortization for the three months ended June 30, 2009, of the compensation cost recognized for restricted common shares issued to executive officers, directors and employees.
In the aggregate, these non-cash items reduced net income by $0.8 million, or $0.02 to earnings per basic and diluted share, for the three months ended June 30, 2009.
Dividend Declared
The Company's Board of Directors declared a quarterly dividend of $0.05 per share with respect to the second quarter of 2009, payable on September 7, 2009 to shareholders of record as of the close of business on August 25, 2009.
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping Inc. mainly employs vessels under fixed rate charters for periods ranging from one to five years. The Company has secured under such contracts 98%, 84% and 66% of its fleet capacity in the remainder of 2009, in 2010 and in 2011, respectively.
Cash Flows
For the six months ended June 30, 2009, the Company generated net cash from operating activities of $43.5 million, compared to $39.4 million for the six months ended June 30, 2008. For the six months ended June 30, 2009, net cash used in investing activities was $40.0 million and net cash from financing activities was $33.3 million. For the six months ended June 30, 2008, net cash used in investing activities was $5.4 million and cash from financing activities was $16.5 million.
Six months ended June 30, 2009 Financial Results:
Time charter revenue for the six months ended June 30, 2009 was $83.9 million, compared to $81.1 million for the six months ended June 30, 2008. The Company reported net income of $35.0 million, or $1.17 per basic and diluted share for the six months ended June 30, 2009, calculated on 29,962,927 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, 2008, the Company reported net income of $40.4 million, or $1.51 and $1.50 per basic and diluted share, respectively, calculated on 26,601,327 weighted average number of basic shares and on 26,961,407 weighted average number of diluted shares.
Excluding all non-cash items described below, adjusted net income for the six months ended June 30, 2009 was $31.3 million, or $1.04 per basic and diluted share. This compares to adjusted net income of $27.6 million, or $1.03 and $1.02 per basic and diluted share, respectively, for the six months ended June 30, 2008. Please refer to the table at the back of this press release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share.
EBITDA was $59.0 million for the six months ended June 30, 2009, compared to $62.8 million for the six months ended June 30, 2008. This was calculated by adding to net income of $35.0 million for the six months ended June 30, 2009, net interest expense and depreciation that in the aggregate amounted to $24.0 million for the six months ended June 30, 2009. Adjusted EBITDA, excluding all non-cash items described below, was $54.0 million for the six months ended June 30, 2009, compared to $48.6 million for the second quarter of 2008. Please see the table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated 12 vessels during the six months ended June 30, 2009, earning an average time charter equivalent rate, or TCE rate, of $37,004 per day, compared to an average of 11 vessels during the six months ended June 30, 2008, earning an average time charter equivalent rate of $39,063 per day. Please see the table at the back of this release for a reconciliation of TCE rates to time charter revenue.
Total adjusted operating expenses for the six months ended June 30, 2009 were $13.6 million, or approximately $6,284 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $0.3 million of share-based compensation for the period. For the six months ended June 30, 2008, total adjusted operating expenses were $13.9 million, or approximately $6,938 per day, including vessel operating expenses, management fees and general and administrative expenses and drydocking costs, but excluding $0.3 million of share-based compensation.
Six months ended June 30, 2009 Non-cash Items
The Company's results for the six months ended June 30, 2009 included the following non-cash items:
* Non-cash revenue of $9.2 million and depreciation expense of $1.4 million associated with below market time charters attached to vessels acquired, which increases net revenue (amortized over the remaining period of the time charter) and increases depreciation expense (amortized over the remaining useful life of the vessel). These non-cash items contributed an aggregate of $7.8 million to net income, or $0.26 to basic and diluted earnings per share, for the six months ended June 30, 2009. * Impairment loss on the MV Blue Seas of $6.0 million, or $0.20 per basic and diluted share. * An unrealized gain from interest rate swaps of $2.2 million, or $0.07 per basic and diluted share, respectively, for the six months ended June 30, 2009. * Non-cash expenses of $0.3 million, or $0.01 per basic and diluted share, relating to the amortization for the six months ended June 30, 2009, of the compensation cost recognized for restricted common shares issued to executive officers, directors and employees.
In the aggregate, these non-cash items contributed $3.7 million to net income, or $0.12 to earnings per basic and diluted share, for the six months ended June 30, 2009.
Conference Call and Webcast:
The Company's management will host a conference call to discuss its second quarter and six months ended June 30, 2009 results on August 12, 2009 at 9:00 a.m. Eastern Time.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: + 1 866 288 9315 (from the US), + 44 (0) 800 3769 250 (from the UK), or + 30 211 180 2000 (all other callers). The access code for the call is "909".
A telephonic replay of the conference call will be available for 90 days by dialing + 1 866 288 9317 (from the US), + 44 (0) 800 901 2906 (from the UK), or + 30 210 94 60 929 (all other callers). The access code for the replay is "909#".
Slides and audio webcast:
There will also be a live webcast of the conference call and accompanying slide presentation on the Paragon Shipping Inc. website (www.paragonship.com). Please allow 15 minutes prior to the call to visit the site and download and install any necessary audio software. The webcast will be archived on this site for one year.
About Paragon Shipping Inc.
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation of drybulk cargoes. The Company's current fleet consists of twelve vessels with a total carrying capacity of 765,137 dwt.
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 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. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Updated Fleet List
The following table represents our fleet as of August 11, 2009.
---------------------------------------------------------------------
Name Type Dwt Year Built
---------------------------------------------------------------------
Panamax
---------------------------------------------------------------------
Deep Seas Panamax 72,891 1999
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Calm Seas Panamax 74,047 1999
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Kind Seas Panamax 72,493 1999
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Pearl Seas Panamax 74,483 2006
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Diamond Seas Panamax 74,274 2001
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Coral Seas Panamax 74,477 2006
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Golden Seas Panamax 74,475 2006
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Total Panamax 7 517,140
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Handymax
---------------------------------------------------------------------
Blue Seas Handymax 45,654 1995
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Clean Seas Handymax 46,640 1995
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Crystal Seas Handymax 43,222 1995
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Total Handymax 3 135,516
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Supramax
---------------------------------------------------------------------
Sapphire Seas Supramax 53,702 2005
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Friendly Seas Supramax 58,779 2008
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Total Supramax 2 112,481
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Grand Total 12 765,137
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Summary Fleet Data
--------------------------------------
Quarter Ended Quarter Ended
June 30, 2008 June 30, 2009
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FLEET DATA
---------------------------------------------------------------------
Average number of vessels (1) 11 12
---------------------------------------------------------------------
Available days for fleet (2) 987 1,085
---------------------------------------------------------------------
Calendar days for fleet (3) 1,001 1,092
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Fleet utilization (4) 99% 99%
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AVERAGE DAILY RESULTS
---------------------------------------------------------------------
Time charter equivalent (5) 39,027 36,833
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Time charter equivalent
Adjusted (5) 31,394 32,566
---------------------------------------------------------------------
Vessel operating expenses (6) 4,859 4,391
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Dry-docking expenses (7) 509 23
---------------------------------------------------------------------
Management fees (8) 931 792
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General and administrative 1,465 799
expenses (9) Adjusted
---------------------------------------------------------------------
Total vessel operating expenses 7,764 6,005
(10) Adjusted
---------------------------------------------------------------------
--------------------------------------
Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
FLEET DATA
---------------------------------------------------------------------
Average number of vessels (1) 11 12
---------------------------------------------------------------------
Available days for fleet (2) 1,976 2,142
---------------------------------------------------------------------
Calendar days for fleet (3) 2,002 2,172
---------------------------------------------------------------------
Fleet utilization (4) 99% 99%
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AVERAGE DAILY RESULTS
---------------------------------------------------------------------
Time charter equivalent (5) 39,063 37,004
---------------------------------------------------------------------
Time charter equivalent
Adjusted (5) 31,438 32,704
---------------------------------------------------------------------
Vessel operating expenses (6) 4,475 4,651
---------------------------------------------------------------------
Dry-docking expenses (7) 311 30
---------------------------------------------------------------------
Management fees (8) 847 810
---------------------------------------------------------------------
General and administrative 1,305 793
expenses (9) Adjusted
---------------------------------------------------------------------
Total vessel operating expenses
(10) Adjusted 6,938 6,284
---------------------------------------------------------------------
(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 calendar days in
the period.
(2) Available days for the fleet are the total calendar days the
vessels were in our possession for the relevant period after
subtracting for off hire days with major repairs, dry-docks or
special or intermediate surveys.
(3) Calendar days are the total days we possessed the vessels in our
fleet for the relevant period including off hire days associated
with major repairs, dry-dockings or special or intermediate
surveys.
(4) Fleet utilization is the percentage of time that our vessels were
available for revenue generating available days and is determined
by dividing available days by fleet calendar days for the
relevant period.
(5) Time charter equivalent or 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 revenue generated from
charters net of voyage expenses by available days for the
relevant time period. Voyage expenses primarily consist of port,
canal and fuel costs that are unique to a particular voyage. 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.
For the time charter equivalent adjusted, other non-cash items
relating to the below market time charters attached to vessels
acquired which are amortized over the remaining period of the
time charter as an increase to net revenue have been excluded.
The Company excluded amortization of below market acquired time
charters because the Company believes that these non-cash items
do not reflect fairly the fleet operational results.
(6) 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.
(7) Daily dry-docking expenses is calculated by dividing dry-docking
expenses by fleet calendar days for the relevant time period.
(8) Daily management fees are calculated by dividing management fees
by fleet calendar days for the relevant time period.
(9) Daily general and administrative expenses are calculated by
dividing general and administrative expense by fleet calendar
days for the relevant time period. Non-cash expenses relating to
the amortization of the share based compensation cost for
restricted shares have been excluded.
(10) Total vessel operating expenses, or 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 is calculated by dividing TVOE by fleet calendar days for
the relevant time period. Non-cash expenses relating to the
amortization of the share based compensation cost for restricted
shares have been excluded.
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
--------------------------------------
Quarter Ended Quarter Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Time Charter Revenues 40,621,454 42,291,887
---------------------------------------------------------------------
Less Voyage Expenses (147,676) (129,001)
---------------------------------------------------------------------
Less Commission (1,954,504) (2,198,711)
---------------------------------------------------------------------
Total Revenue, net of voyage
expenses 38,519,274 39,964,175
---------------------------------------------------------------------
Total available days 987 1,085
---------------------------------------------------------------------
Time Charter Equivalent 39,027 36,833
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted Reconciliation
---------------------------------------------------------------------
Time Charter Revenues 40,621,454 42,291,887
---------------------------------------------------------------------
Less Voyage Expenses (147,676) (129,001)
---------------------------------------------------------------------
Less Commission (1,954,504) (2,198,711)
---------------------------------------------------------------------
Total Revenue, net of voyage
expenses 38,519,274 39,964,175
---------------------------------------------------------------------
Less Amortization of Below
Market Acquired Time Charters (7,533,493) (4,630,368)
---------------------------------------------------------------------
Total Revenue, net of voyage
expenses Adjusted 30,985,781 35,333,807
---------------------------------------------------------------------
Total available days 987 1,085
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted 31,394 32,566
---------------------------------------------------------------------
--------------------------------------
Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Time Charter Revenues 81,075,548 83,890,727
---------------------------------------------------------------------
Less Voyage Expenses (199,573) (185,296)
---------------------------------------------------------------------
Less Commission (3,688,357) (4,442,662)
---------------------------------------------------------------------
Total Revenue, net of voyage
expenses 77,187,618 79,262,769
---------------------------------------------------------------------
Total available days 1,976 2,142
---------------------------------------------------------------------
Time Charter Equivalent 39,063 37,004
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted Reconciliation
---------------------------------------------------------------------
Time Charter Revenues 81,075,548 83,890,727
---------------------------------------------------------------------
Less Voyage Expenses (199,573) (185,296)
---------------------------------------------------------------------
Less Commission (3,688,357) (4,442,662)
---------------------------------------------------------------------
Total Revenue, net of voyage
expenses 77,187,618 79,262,769
---------------------------------------------------------------------
Less Amortization of Below
Market Acquired Time Charters (15,066,986) (9,211,003)
---------------------------------------------------------------------
Total Revenue, net of voyage
expenses Adjusted 62,120,632 70,051,766
---------------------------------------------------------------------
Total available days 1,976 2,142
---------------------------------------------------------------------
Time Charter Equivalent
Adjusted 31,438 32,704
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PARAGON SHIPPING INC.
Condensed Cash Flow Information
(Expressed in United States Dollars)
--------------------------------------
Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Cash and Cash Equivalents,
beginning of year 31,328,637 68,441,752
---------------------------------------------------------------------
Provided by (used in):
---------------------------------------------------------------------
Operating Activities 39,407,185 43,520,683
---------------------------------------------------------------------
Investing Activities (5,425,000) (40,000,000)
---------------------------------------------------------------------
Financing Activities 16,488,421 33,285,103
---------------------------------------------------------------------
Net increase in Cash and Cash
Equivalents 50,470,606 36,805,786
---------------------------------------------------------------------
Cash and Cash Equivalents,
end of period 81,799,243 105,247,538
---------------------------------------------------------------------
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
--------------------------------------
Quarter Ended Quarter Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Net Income 24,610,980 15,816,463
---------------------------------------------------------------------
Plus Net Interest expense 3,161,910 2,753,980
---------------------------------------------------------------------
Plus Depreciation 7,848,565 8,647,334
---------------------------------------------------------------------
EBITDA 35,621,455 27,217,777
---------------------------------------------------------------------
Adjusted EBITDA Reconciliation
---------------------------------------------------------------------
Net Income 24,610,980 15,816,463
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time charters (6,845,232) (3,942,900)
---------------------------------------------------------------------
Impairment loss -- 6,005,000
---------------------------------------------------------------------
Unrealized gain from interest
rate swaps (4,519,893) (1,428,101)
---------------------------------------------------------------------
Non-cash expenses from the
amortization of share based
compensation cost recognized 119,764 152,166
---------------------------------------------------------------------
Adjusted Net Income 13,365,619 16,602,628
---------------------------------------------------------------------
Plus Net Interest expense 3,161,910 2,753,980
---------------------------------------------------------------------
Plus Depreciation (2) 7,160,304 7,959,866
---------------------------------------------------------------------
Adjusted EBITDA 23,687,833 27,316,474
---------------------------------------------------------------------
--------------------------------------
Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Net Income 40,375,820 35,001,240
---------------------------------------------------------------------
Plus Net Interest expense 6,690,502 6,842,145
---------------------------------------------------------------------
Plus Depreciation 15,697,131 17,199,643
---------------------------------------------------------------------
EBITDA 62,763,453 59,043,028
---------------------------------------------------------------------
Adjusted EBITDA Reconciliation
---------------------------------------------------------------------
Net Income 40,375,820 35,001,240
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time charters (13,690,463) (7,843,622)
---------------------------------------------------------------------
Impairment loss -- 6,005,000
---------------------------------------------------------------------
Unrealized loss/(gain) from
interest rate swaps 662,890 (2,154,422)
---------------------------------------------------------------------
Non-cash expenses from the
amortization of share based
compensation cost recognized 254,179 302,659
---------------------------------------------------------------------
Adjusted Net Income 27,602,426 31,310,855
---------------------------------------------------------------------
Plus Net Interest expense 6,690,502 6,842,145
---------------------------------------------------------------------
Plus Depreciation (2) 14,320,609 15,832,261
---------------------------------------------------------------------
Adjusted EBITDA 48,613,537 53,985,261
---------------------------------------------------------------------
(1) Paragon Shipping Inc. 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 may involve significant
financing costs. EBITDA is not an item recognized by GAAP and
should not be considered as an alternative to net income,
operating income or any other indicator of a Company's operating
performance required by GAAP. The Company's definition of EBITDA
may not be the same as that used by other companies in the
shipping or other industries. The Company excluded non-cash items
to derive the adjusted net income and the adjusted EBITDA because
the Company believes that the non-cash items do not reflect fairly
the fleet operational results.
(2) Excludes a portion of depreciation charged on purchase price
adjustment allocated to vessel cost for vessel acquired with
below market charters.
Reconciliation of GAAP Financial Information to Non-GAAP
Financial Information
(Expressed in United States Dollars)
---------------------------------------------------------------------
GAAP Financial Information Quarter Ended Quarter Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Net Income 24,610,980 15,816,463
---------------------------------------------------------------------
Weighted average number of
Class A common shares basic 26,927,648 32,816,789
---------------------------------------------------------------------
Weighted average number of
Class A common shares diluted 27,155,816 32,816,789
---------------------------------------------------------------------
Earnings per Class A common
shares basic & diluted 0.91 0.48
---------------------------------------------------------------------
Reconciliation of Net Income to
Adjusted Net Income
---------------------------------------------------------------------
Net Income 24,610,980 15,816,463
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time charters (6,845,232) (3,942,900)
---------------------------------------------------------------------
Impairment loss -- 6,005,000
---------------------------------------------------------------------
Unrealized gain from interest
rate swaps (4,519,893) (1,428,101)
---------------------------------------------------------------------
Non-cash expenses from the
amortization of compensation
cost recognized 119,764 152,166
---------------------------------------------------------------------
Adjusted Net Income 13,365,619 16,602,628
---------------------------------------------------------------------
Weighted average number of
common shares basic 26,927,648 32,816,789
---------------------------------------------------------------------
Weighted average number of
common shares diluted 27,155,816 32,816,789
---------------------------------------------------------------------
Adjusted earnings per share
basic (1) 0.49 0.50
---------------------------------------------------------------------
Adjusted earnings per share
diluted (1) 0.49 0.51
---------------------------------------------------------------------
(1) Adjusted earnings per share is not an item recognized by GAAP and
should not be considered as an alternative to Earnings per share
or any other indicator of a Company's operating performance
required by GAAP. The Company excluded non-cash items to derive at
the adjusted net income and the adjusted earnings per share basic
and diluted because the Company believes that these non-cash items
do not reflect fairly the fleet operational results.
Reconciliation of GAAP Financial Information to Non-GAAP
Financial Information
(Expressed in United States Dollars)
---------------------------------------------------------------------
GAAP Financial Information Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
---------------------------------------------------------------------
Net Income 40,375,820 35,001,240
---------------------------------------------------------------------
Weighted average number of
Class A common shares basic 26,601,327 29,962,927
---------------------------------------------------------------------
Weighted average number of
Class A common shares diluted 26,961,407 29,962,927
---------------------------------------------------------------------
Earnings per Class A common
shares basic 1.51 1.17
---------------------------------------------------------------------
Earnings per Class A common
shares diluted 1.50 1.17
---------------------------------------------------------------------
Reconciliation of Net Income to
Adjusted Net Income
---------------------------------------------------------------------
Net Income 40,375,820 35,001,240
---------------------------------------------------------------------
Non-cash revenue and
depreciation due to below
market acquired time charters (13,690,463) (7,843,622)
---------------------------------------------------------------------
Impairment loss -- 6,005,000
---------------------------------------------------------------------
Unrealized loss/(gain) from
interest rate swaps 662,890 (2,154,422)
---------------------------------------------------------------------
Non-cash expenses from the
amortization of compensation
cost recognized 254,179 302,659
---------------------------------------------------------------------
Adjusted Net Income 27,602,426 31,310,855
---------------------------------------------------------------------
Weighted average number of
common shares basic 26,601,327 29,962,927
---------------------------------------------------------------------
Weighted average number of
common shares diluted 26,961,407 29,962,927
---------------------------------------------------------------------
Adjusted earnings per share
basic (1) 1.03 1.04
---------------------------------------------------------------------
Adjusted earnings per share
diluted (1) 1.02 1.04
---------------------------------------------------------------------
(1) Adjusted earnings per share is not an item recognized by GAAP and
should not be considered as an alternative to Earnings per share
or any other indicator of a Company's operating performance
required by GAAP. The Company excluded non-cash items to derive at
the adjusted net income and the adjusted earnings per share basic
and diluted because the Company believes that these non-cash items
do not reflect fairly the fleet operational results.
Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2008 and June 30, 2009
(Expressed in United States Dollars)
---------------------------------------------------------------------
December 31, 2008 June 30, 2009
Assets
Current assets
Cash and cash equivalents 68,441,752 105,247,538
Restricted cash -- 23,300,000
Trade receivables 372,965 1,121,634
Other receivables 1,209,230 1,749,483
Prepaid expenses 379,140 333,840
Due from management company 985,960 2,572,566
Inventories 885,665 885,812
---------------------------------------------------------------------
Total current assets 72,274,712 135,210,873
---------------------------------------------------------------------
Fixed assets
Vessels at cost 713,373,186 707,368,186
Less: accumulated depreciation (51,142,696) (68,342,339)
---------------------------------------------------------------------
Total fixed assets 662,230,490 639,025,847
---------------------------------------------------------------------
Other assets 1,787,988 1,150,913
Restricted cash 6,010,000 22,710,000
Above market acquired time
charters 43,304 --
Other long-term receivables 74,760 860,284
---------------------------------------------------------------------
Total Assets 742,421,254 798,957,917
---------------------------------------------------------------------
Liabilities and Shareholders'
Equity
Current liabilities
Trade accounts payable
(including balance due to a
related party of $500 and
$419,521 as of December 31,
2008 and June 30, 2009,
respectively) 2,538,796 2,521,226
Accrued expenses and dividends
payable 4,098,929 1,923,709
Interest rate swaps 6,407,751 7,790,034
Deferred income 3,024,423 4,229,085
Current portion of long-term
debt 53,150,000 49,350,000
---------------------------------------------------------------------
Total current liabilities 69,219,899 65,814,054
---------------------------------------------------------------------
Long-Term Liabilities
Long-term debt 334,335,000 312,785,000
Deferred income 703,863 --
Interest rate swaps 5,247,391 1,710,686
Below market acquired time
charters 24,483,822 15,229,515
---------------------------------------------------------------------
Total long-term liabilities 364,770,076 329,725,201
---------------------------------------------------------------------
Total Liabilities 433,989,975 395,539,255
---------------------------------------------------------------------
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par
value; 25,000,000 authorized,
none issued, none outstanding
at December 31, 2008 and
June 30, 2009 -- --
Class A common shares, $0.001
par value; 120,000,000
authorized 27,138,515 issued
and outstanding at December
31, 2008 and 42,039,115
issued and outstanding at
June 30, 2009 27,139 42,039
Class B common shares, $0.001
par value; 5,000,000
authorized, none issued and
outstanding at December 31,
2008 and June 30, 2009 -- --
Additional paid-in capital 318,515,490 381,578,519
Accumulated (deficit)/earnings (10,111,350) 21,798,104
---------------------------------------------------------------------
Total shareholders' equity 308,431,279 403,418,662
---------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity 742,421,254 798,957,917
---------------------------------------------------------------------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Income
For the three months ended June 30, 2008 and 2009
(Expressed in United States Dollars)
----------------------------------------------------------------------
Three Months Ended Three Months Ended
June 30, 2008 June 30, 2009
Revenue
Time charter revenue
(including amortization of
below and above market
acquired time charters of
$7,533,493 and $4,630,368
for the three months ended
June 30, 2008 and 2009,
respectively) 40,621,454 42,291,887
Less: commissions 1,954,504 2,198,711
---------------------------------------------------------------------
Net Revenue 38,666,950 40,093,176
---------------------------------------------------------------------
Expenses/(Income)
Voyage expenses 147,676 129,001
Vessels operating expenses
(including expenses charged
by a related party of
$41,791 and $52,000 for the
three months ended June 30,
2008 and 2009, respectively) 4,864,057 4,795,187
Dry-docking expenses 509,936 24,593
Management fees charged by a
related party 931,831 864,632
Depreciation 7,848,565 8,647,334
General and administrative
expenses (including share
based compensation of
$119,764 and $152,166 for
the three months ended
June 30, 2008 and 2009,
respectively) 1,586,699 1,024,812
Impairment loss -- 6,005,000
Gain from vessel early
redelivery -- (251,855)
---------------------------------------------------------------------
Operating Income 22,778,186 18,854,472
---------------------------------------------------------------------
Other Income/(Expenses)
Interest and finance costs (3,482,532) (2,897,944)
Gain/(Loss) on interest rate
swaps 4,105,821 (241,441)
Interest income 320,622 143,964
Other Income 912,351 --
Foreign currency loss (23,468) (42,588)
---------------------------------------------------------------------
Total Other Expenses, net 1,832,794 (3,038,009)
---------------------------------------------------------------------
Net Income 24,610,980 15,816,463
Earnings per Class A common
share, basic $ 0.91 $ 0.48
Earnings per Class A common
share, diluted $ 0.91 $ 0.48
Weighted average number of
Class A common shares, basic 26,927,648 32,816,789
Weighted average number of
Class A common shares,
diluted 27,155,816 32,816,789
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Income
For the six months ended June 30, 2008 and 2009
(Expressed in United States Dollars)
---------------------------------------------------------------------
Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
Revenue
Time charter revenue
(including amortization of
below and above market
acquired time charters of
$15,066,986 and $9,211,003
for the six months ended
June 30, 2008 and 2009,
respectively) 81,075,548 83,890,727
Less: commissions 3,688,357 4,442,662
---------------------------------------------------------------------
Net Revenue 77,387,191 79,448,065
---------------------------------------------------------------------
Expenses/(Income)
Voyage expenses 199,573 185,296
Vessels operating expenses
(including expenses charged
by a related party of $64,865
and $100,200 for the six
months ended June 30, 2008
and 2009, respectively) 8,959,711 10,101,182
Dry-docking expenses 622,458 64,257
Management fees charged by a
related party 1,696,595 1,760,272
Depreciation 15,697,131 17,199,643
General and administrative
expenses (including share
based compensation of
$254,179 and $302,659 for the
six months ended June 30,
2008 and 2009, respectively) 2,865,970 2,026,252
Impairment loss -- 6,005,000
Gain from vessel early
redelivery -- (251,855)
---------------------------------------------------------------------
Operating Income 47,345,753 42,358,018
---------------------------------------------------------------------
Other Income/(Expenses)
Interest and finance costs (7,571,130) (7,206,311)
Loss on interest rate swaps (1,076,962) (534,371)
Interest income 880,628 364,166
Other income 912,351 -
Foreign currency (loss)/gain (114,820) 19,738
---------------------------------------------------------------------
Total Other Expenses, net (6,969,933) (7,356,778)
---------------------------------------------------------------------
Net Income 40,375,820 35,001,240
Earnings per Class A common
share, basic $ 1.51 $ 1.17
Earnings per Class A common
share, diluted $ 1.50 $ 1.17
Weighted average number of
Class A common shares, basic 26,601,327 29,962,927
Weighted average number of
Class A common shares,
diluted 26,961,407 29,962,927
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Shareholders' Equity
For the six months ended June 30, 2009
(Expressed in United States Dollars, except for number of shares)
---------------------------------------------------------------------
Class A Shares
-------------------
Additional Accumulated
Number of Par Paid-in (Deficit)/
Shares Value Capital Earnings Total
---------------------------------------------------------------------
Balance
January 1,
2009 27,138,515 27,139 318,515,490 (10,111,350) 308,431,279
---------------------------------------------------------------------
Issuance of
Class A
common
shares and
share based
compen-
sation 14,900,600 14,900 63,063,029 63,077,929
Dividends
declared
(0.05 per
share) (3,091,786) (3,091,786)
Net Income 35,001,240 35,001,240
---------------------------------------------------------------------
Balance
June 30,
2009 42,039,115 42,039 381,578,519 21,798,104 403,418,662
---------------------------------------------------------------------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
For the six months ended June 30, 2008 and 2009
(Expressed in United States Dollars)
----------------------------------------------------------------------
Six Months Ended Six Months Ended
June 30, 2008 June 30, 2009
Cash flows from operating
activities
Net Income 40,375,820 35,001,240
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 15,697,131 17,199,643
Impairment loss -- 6,005,000
Amortization of below and
above market acquired time
charters (15,066,986) (9,211,003)
Amortization of financing
costs 282,381 825,125
Share based compensation 254,179 302,659
Unrealized loss/(gain) on
interest rate swaps 662,890 (2,154,422)
Changes in assets and
liabilities
Decrease/(Increase) in trade
receivables 211,091 (748,669)
(Increase)/Decrease in other
receivables (736,007) 354,475
Decrease in prepaid expenses 189,197 45,300
Increase in inventories (15,357) (147)
Increase in due from
management company (203,799) (1,586,606)
Increase in other long term
receivables (201,626) (785,524)
Increase/(Decrease) in trade
accounts payable 935,226 (17,570)
Decrease in accrued expenses (1,925,885) (2,209,617)
Decrease in due to management
company (1,642,805) --
Increase in deferred income 591,735 500,799
---------------------------------------------------------------------
Net cash from operating
activities 39,407,185 43,520,683
---------------------------------------------------------------------
Cash flow from Investing
Activities
Advances for vessel
acquisitions (7,925,000) --
Repayment of restricted cash 3,000,000 --
Increase in restricted cash (500,000) (40,000,000)
---------------------------------------------------------------------
Net cash used in investing
activities (5,425,000) (40,000,000)
---------------------------------------------------------------------
Cash flows from financing
activities
Proceeds from long-term debt 60,000,000 30,000,000
Repayment of long-term debt (33,190,000) (55,350,000)
Payment of financing costs (434,289) (188,050)
Proceeds from the issuance of
Class A common shares 13,517,250 64,213,820
Class A common share offering
costs -- (2,298,881)
Dividends paid (23,404,540) (3,091,786)
---------------------------------------------------------------------
Net cash from financing
activities 16,488,421 33,285,103
---------------------------------------------------------------------
Net Increase in cash and cash
equivalents 50,470,606 36,805,786
Cash and cash equivalents at
the beginning of the period 31,328,637 68,441,752
---------------------------------------------------------------------
Cash and cash equivalents at
the end of the period 81,799,243 105,247,538
---------------------------------------------------------------------
Supplemental disclosure of
cash flow information
Cash paid during the period
for interest 7,071,170 7,882,486