ATHENS, Greece, Sept. 2, 2014 /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, 2014.
Second Quarter 2014 Highlights
- Net revenue, net of voyage expenses of $9.7 million in the second quarter of 2014
- Reduced average daily vessel operating expenses by 12.0%
year-over-year
- Adjusted EBITDA of $0.9
million in the second quarter of 2014
- Adjusted net loss of $5.6
million, or $0.23 per common
share in the second quarter of 2014
Financial Highlights
(Expressed in thousands of United States Dollars, except for
vessel data, TCE and share data)
|
Quarter
Ended
June 30,
2013
|
Quarter
Ended
June 30,
2014
|
Six Months
Ended
June 30,
2013
|
Six Months
Ended
June 30,
2014
|
Average number of
vessels
|
13.0
|
14.0
|
12.8
|
14.0
|
Time charter
equivalent rate (TCE) (1)
|
10,476
|
7,870
|
10,930
|
8,208
|
Net Revenue, net
of voyage expenses
|
11,890
|
9,743
|
24,678
|
19,994
|
EBITDA
(1)
|
6,196
|
(2,158)
|
8,747
|
(21,210)
|
Adjusted EBITDA
(1)
|
6,119
|
882
|
9,301
|
1,215
|
Net Income /
(Loss)
|
17
|
(9,652)
|
(3,494)
|
(35,537)
|
Adjusted Net Loss
(1)
|
(60)
|
(5,584)
|
(2,940)
|
(11,601)
|
Earnings / (Loss)
per common share basic and diluted
|
0.00
|
(0.39)
|
(0.31)
|
(1.56)
|
Adjusted Loss per
common share basic and diluted (1)
|
(0.01)
|
(0.23)
|
(0.26)
|
(0.51)
|
|
|
(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").
|
Management Commentary
Commenting on the results, Michael Bodouroglou, Chairman and
Chief Executive Officer of Paragon Shipping, stated, "For the
second quarter of 2014, the drybulk market, and more specifically
the market for Panamax vessels, was weaker than expected. The
Baltic Panamax Index 4 time charter routes average in the second
quarter of 2014 was $6,304 per day,
compared to $10,427 per day in the
first quarter of 2014 and $7,775 per
day in the second quarter of 2013, which represents a decline of
39.5% and 18.9%, respectively. Although we continued to outperform
the market during the quarter, earning an average TCE rate of
$7,870 per vessel per day, the
overall decline in the market rates had a direct impact on our
second quarter results, as we reported a net loss of $9.7 million, or $0.39 per common share. As we continue to expand
our fleet, we will continue to take advantage of economies of scale
and cost-cutting measures. In the second quarter of 2014, we
reduced our daily vessel operating expenses by 12.0%
year-over-year. For the quarter, the non-cash items that were
recorded totaled a loss of $4.1
million, or $0.16 per common
share, including a $3.1 million loss
in our investment in Box Ships. After excluding same, adjusted
EBITDA was $0.9 million and adjusted
net loss was $5.6 million, or
$0.23 per common share."
Mr. Bodouroglou continued, "During the second quarter of 2014,
we strengthened the Company's balance sheet and focused on
improving our cash flow break even rates. More specifically, we
successfully secured debt financing for six of our seven
newbuilding vessels, while at the same time we refinanced the
indebtedness of seven of our operating vessels at more favorable
terms, especially with regard to debt amortization profile and
financial covenant restrictions. Subsequent to the quarter, we also
entered into supplemental agreements with several of our lenders,
pursuant to which we either extended the waiver period or, in some
instances, eliminated the EBITDA related covenants completely. In
addition, in August 2014, we
completed an offering of $25.0
million of senior unsecured notes due 2021. We intend to use
substantially all of the net proceeds from the offering, which are
expected to amount to approximately $23.9
million, for the repayment of existing indebtedness. We have
already agreed with one of our lenders to reduce their current loan
outstanding in return for a streamlined repayment profile and the
removal of all but the leverage related covenants from the
respective loan agreement, which will reduce our cash flow break
even levels further."
Mr. Bodouroglou concluded, "On the basis of a stronger balance
sheet, we will continue to focus on our strategy of conservative
growth by selectively taking advantage of investment opportunities,
while preserving our moderate leverage profile, which we expect,
assuming future improvement in the drybulk market, will eventually
enable the Company to resume paying cash dividends to its
shareholders."
Newbuilding Program Update
On April 25, 2014, the Company
entered into a memorandum of agreement for the sale of its 4,800
TEU containership to an unrelated third party for $42.5 million, less 3% commission. In addition,
in May 2014, the Company agreed with
the shipyard to reduce the contract price of this vessel by
$0.8 million. The sale of the
respective vessel and its transfer to the new owners was concluded
on May 23, 2014. Taking into account
the reduction in the contract price, the sale of the vessel
resulted in a positive net cash inflow to the Company of
approximately $10.1 million.
The Company's current newbuilding program consists of two
Ultramax drybulk carriers (Hull numbers DY152 and DY153) with
expected deliveries in 2014, as well as two Ultramax drybulk
carriers (Hull numbers DY4050 and DY4052) and three Kamsarmax
drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142) with
expected deliveries in 2015. The Company's newbuilding program has
an aggregate cost of $201.2 million,
of which $138.6 million is currently
outstanding. With the $160.0 million
syndicated secured loan facility led by Nordea Bank Finland Plc
("Nordea") and the $47.0 million
secured loan facility with HSH Nordbank AG ("HSH"), the Company has
currently secured debt financing for all of its four Ultramax and
two of its Kamsarmax newbuilding drybulk carriers of up to
$112.4 million, in the aggregate.
Financing Update
On August 1, 2014, the Company
agreed with HSBC Bank Plc ("HSBC"), to extend the existing waivers
for the financial covenants relating to the minimum interest and
debt service coverage ratios, from June 30,
2014 to December 31, 2015.
On July 30, 2014, the Company
received a commitment letter from Unicredit Bank AG ("Unicredit"),
according to which, subject to certain closing conditions,
including a $7.0 million prepayment,
the financial covenants relating to the minimum debt service
coverage ratio, the minimum market value adjusted net worth and the
maximum leverage ratio, will be eliminated until the maturity of
the loan. In addition, under the terms of the commitment letter,
the required ratio of the fair market value of mortgaged vessels to
outstanding loan will be increased from 110% to 130% at all
times.
On July 25, 2014, the Company
agreed with Bank of Ireland to
eliminate the financial covenant relating to the minimum debt
service coverage ratio until the maturity of the loan.
Pursuant to the $47.0 million
secured loan facility with HSH, on July 7,
2014, the Company completed the refinancing of the M/V
Friendly Seas. The Company drew a total amount of $12.6 million and repaid in full the then
outstanding indebtedness under its existing loan agreement with HSH
(dated July 31, 2008). The remaining
undrawn portion of the facility, in the amount of up to
$34.4 million, will be used for the
partial financing of the two Ultramax newbuilding drybulk carriers
with Hull numbers DY152 and DY153.
Pursuant to the $160.0 million
syndicated secured loan facility led by Nordea, on June 10, 2014, the Company completed the
refinancing of the six vessels of its operating fleet (the four
Handysize vessels M/V Prosperous Seas, M/V Precious Seas, M/V
Priceless Seas and the M/V Proud Seas, and the Panamax vessels M/V
Coral Seas and M/V Golden Seas). The Company drew a total amount of
$81.8 million and repaid in full the
then outstanding indebtedness under the loan agreements with Bank
of Scotland (dated December 4, 2007) and Nordea (dated May 5, 2011). The remaining undrawn portion of
the facility, in the amount of up to $78.0
million, will be used for the partial financing of the two
Ultramax newbuilding drybulk carriers with Hull numbers DY4050 and
DY4052, and the two Kamsarmax newbuilding drybulk carriers with
Hull numbers YZJ1144 and YZJ1145.
Senior Unsecured Notes Due 2021
On August 8, 2014, the Company
completed the offering of 1,000,000 senior unsecured notes due 2021
("Notes"), pursuant to its effective shelf registration statement.
The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a
rate of 8.375% per year, payable quarterly on each February 15, May
15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on
August 15, 2021, and may be redeemed
in whole or in part at any time or from time to time after
August 15, 2017. The Company intends
to use substantially all of the net proceeds from the offering,
which are expected to amount to approximately $23.9 million, for the repayment of existing
indebtedness.
2014 Share Buyback Program
Pursuant to the Company's share buyback program, during the
second quarter of 2014 and as of the date of this press release,
the Company has purchased and cancelled 30,000 of its common shares
at an average price of $5.6820 per
share.
Second Quarter 2014 Financial Results
Gross charter revenue was $14.7
million for each of the second quarters of 2014 and 2013.
The Company reported a net loss of $9.7
million, or $0.39 per basic
and diluted share, for the second quarter of 2014, calculated based
on a weighted average number of basic and diluted shares
outstanding for the period of 24,281,164 and reflecting the impact
of the non-cash items discussed below. For the second quarter of
2013, the Company reported net income of $17,032, or less than $0.01 per basic and diluted share, calculated
based on 11,041,107 and 11,133,500 weighted average number of basic
and diluted shares, respectively.
Excluding all non-cash items described below, the adjusted net
loss for the second quarter of 2014 was $5.6
million, or $0.23 per basic
and diluted share, compared to adjusted net loss of $0.1 million, or $0.01 per basic and diluted share, for the second
quarter of 2013.
EBITDA for the second quarter of 2014 was negative $2.2 million, compared to positive $6.2 million for the second quarter of 2013.
EBITDA for the second quarter of 2014 was calculated by adding the
net loss of $9.7 million to net
interest expense, including interest expense from interest rate
swaps, and depreciation that in the aggregate amounted to
$7.5 million. Adjusted EBITDA,
excluding all non-cash items described below, was $0.9 million for the second quarter of 2014,
compared to $6.1 million for the
second quarter of 2013.
The Company operated an average of 14.0 vessels during the
second quarter of 2014, earning an average TCE rate of $7,870 per day, compared to an average of 13.0
vessels during the second quarter of 2013, earning an average TCE
rate of $10,476 per day.
Total adjusted operating expenses, which included vessel
operating expenses, management fees, general and administrative
expenses and dry-docking costs, and excluded share-based
compensation, equaled $8.9 million
for the second quarter of 2014, or 5.3% lower than the adjusted
operating expenses of $9.3 million
for the second quarter of 2013, despite having a larger fleet. On a
daily basis, adjusted vessel operating expenses for the second
quarter of 2014 were approximately $6,950 per vessel per day, or 12.0% lower than
the adjusted vessel operating expenses of approximately
$7,900 per vessel per day for the
second quarter of 2013, as a result of the Company's cost control
efficiency and the economies of scale of having a larger fleet.
The gain from the sale of assets of $0.4
million for the second quarter of 2014, relates to the gain
on the sale of the 4,800 TEU containership newbuilding, following
the $0.8 million discount in its
contract price that was agreed with the shipyard as discussed
above.
As of June 30, 2014, the Company
owned approximately 11.2% 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. Based on the unaudited financial
statements reported by Box Ships on September 2, 2014, for the second quarter of
2014, the Company recorded income of $18,425, representing its share of Box Ships' net
income for the period, compared to $0.4
million income for the second quarter of 2013.
In the second quarter of 2014, the Company recorded a non-cash
loss of $0.2 million relating to the
dilution effect from the Company's non-participation in the public
offering by Box Ships of 5,500,000 of Box Ships' common shares,
which was completed on April 15,
2014. In addition, as of June 30,
2014, the difference between the fair value and the book
value of the Company's investment in Box Ships was considered to be
other than temporary and therefore the investment was impaired and
the Company recorded a non-cash loss of $2.9
million. Both items are included in "Loss on investment in
affiliate" in the unaudited condensed consolidated statements of
comprehensive income / (loss) at the end of this release.
Second Quarter 2014 Non-cash and One-off Items
The Company's results for the three months ended June 30, 2014 included the following non-cash
items:
- Gain from sale of assets of $0.4
million, or $0.02 per basic
and diluted share.
- Gain from marketable securities, net of $11,598, or less than $0.01 per basic and diluted share.
- Loss on investment in affiliate of $3.1
million, or $0.13 per basic
and diluted share.
- An unrealized loss on interest rate swaps of $0.1 million, or less than $0.01 per basic and diluted share.
- Non-cash expenses of $0.2
million, or $0.01 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.
- Write off of financing expenses of $1.0
million, or $0.04 per basic
and diluted share.
In the aggregate, these non-cash items decreased the Company's
earnings by $4.1 million, which
represents a $0.16 decrease in
earnings per basic and diluted share, for the three months ended
June 30, 2014.
Six months ended June 30, 2014
Financial Results
Gross charter revenue was $28.9
million for each of the first six months of 2014 and 2013.
The Company reported a net loss of $35.5
million, or $1.56 per basic
and diluted share, for the six months ended June 30, 2014, calculated based on a weighted
average number of basic and diluted shares outstanding for the
period of 22,414,824 and reflecting the impact of the non-cash
items discussed below. For the six months ended June 30, 2013, the Company reported a net loss of
$3.5 million, or $0.31 per basic and diluted share, calculated
based on a weighted average number of basic and diluted shares of
11,016,733.
Excluding all non-cash items described below, the adjusted net
loss for the six months ended June 30,
2014 was $11.6 million, or
$0.51 per basic and diluted share,
compared to adjusted net loss of $2.9
million, or $0.26 per basic
and diluted share, for the six months ended June 30, 2013.
EBITDA for the six months ended June 30,
2014 was negative $21.2
million, compared to positive $8.7
million for the six months ended June
30, 2013. EBITDA for the six months ended June 30, 2014 was calculated by adding the net
loss of $35.5 million to net interest
expense, including interest expense from interest rate swaps, and
depreciation that in the aggregate amounted to $14.3 million. Adjusted EBITDA, excluding all
non-cash items described below, was $1.2
million for the six months ended June
30, 2014, compared to $9.3
million for the six months ended June
30, 2013.
The Company operated an average of 14.0 vessels during the six
months ended June 30, 2014, earning
an average TCE rate of $8,208 per
day, compared to an average of 12.8 vessels during the six months
ended June 30, 2013, earning an
average TCE rate of $10,930 per
day.
Total adjusted operating expenses, which included vessel
operating expenses, management fees, general and administrative
expenses and dry-docking costs, and excluded share-based
compensation, equaled $18.5 million
for the six months ended June 30,
2014, or 5.1% lower than the adjusted operating expenses of
$19.5 million for the six months
ended June 30, 2013, despite having a
larger fleet. On a daily basis, adjusted vessel operating expenses
for the first six months of 2014 were approximately $7,331 per vessel per day, or 12.7% lower than
the adjusted vessel operating expenses of $8,399 per vessel per day for the first six
months of 2013, as a result of the Company's cost control
efficiency and the economies of scale of having a larger fleet.
The impairment loss of $15.7
million for the six months ended June
30, 2014, relates to the write down to fair value of the
contract price of the 4,800 TEU containership newbuilding, as a
result of the increased probability of selling the respective
vessel as of March 31, 2014.
The gain from the sale of assets of $0.4
million for the six months ended June
30, 2014, relates to the gain on the sale of the 4,800 TEU
containership newbuilding, following the $0.8 million discount in its contract price that
was agreed with the shipyard as discussed above.
Based on the unaudited financial statements reported by Box
Ships on September 2, 2014, for the
six months ended June 30, 2014, the
Company recorded a loss of $0.3
million, representing its share of Box Ships' net loss for
the period, compared to $1.0 million
income for the six months ended June 30,
2013.
In the six months ended June 30,
2014, the Company recorded a non-cash loss of $0.2 million relating to the dilution effect from
the Company's non-participation in the public offering by Box Ships
of 5,500,000 of Box Ships' common shares, which was completed on
April 15, 2014. In addition, as of
March 31, 2014 and June 30, 2014, the difference between the fair
value and the book value of the Company's investment in Box Ships
was considered to be other than temporary and therefore the
investment was impaired and the Company recorded a non-cash loss of
$2.8 million and $2.9 million in the first and second quarter of
2014, respectively. Both items are included in "Loss on investment
in affiliate" in the unaudited condensed consolidated statements of
comprehensive loss at the end of this release.
Six months ended June 30, 2014
Non-cash and One-off Items
The Company's results for the six months ended June 30, 2014 included the following non-cash
items:
- Impairment loss of $15.7 million,
or $0.69 per basic and diluted
share.
- Gain from sale of assets of $0.4
million, or $0.02 per basic
and diluted share.
- Gain from marketable securities, net of $11,598, or less than $0.01 per basic and diluted share.
- Loss on investment in affiliate of $5.9
million, or $0.26 per basic
and diluted share.
- An unrealized gain on interest rate swaps of $0.1 million, or less than $0.01 per basic and diluted share.
- Non-cash expenses of $1.4
million, or $0.06 per basic
and diluted share, relating to share based compensation to the
management company amounting to $0.9
million and to the amortization of the compensation cost
recognized for non-vested share awards issued to executive
officers, directors and employees amounting to $0.5 million.
- Write off of financing expenses of $1.5
million, or $0.07 per basic
and diluted share.
In the aggregate, these non-cash items decreased the Company's
earnings by $23.9 million, which
represents a $1.05 decrease in
earnings per basic and diluted share, for the six months ended
June 30, 2014.
Cash Flows
For the six months ended June 30,
2014, the Company's net cash used in operating activities
was $0.3 million, compared to net
cash generated from operating activities of $1.9 million for the six months ended
June 30, 2013. For the six months
ended June 30, 2014, net cash used in
investing activities was $63.9
million and net cash from financing activities was
$55.2 million. 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.
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, 2014 results on September 3, 2014 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 10050640.
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
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. Paragon Shipping's current
fleet consists of fourteen drybulk vessels with a total carrying
capacity of 853,699 dwt. In addition, Paragon Shipping's current
newbuilding program consists of two Ultramax drybulk carriers that
are scheduled to be delivered in 2014, as well as two Ultramax
drybulk carriers and three Kamsarmax drybulk carriers that are
scheduled to be delivered in 2015. For more information, visit:
www.paragonship.com. The information contained on the Paragon
Shipping'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
September 2, 2014.
Operating Drybulk
Fleet
|
Name
|
Type / No. of
Vessels
|
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
|
Proud
Seas
|
Handysize
|
37,227
|
2014
|
Total
Handysize
|
4
|
148,927
|
|
Grand
Total
|
14
|
853,699
|
|
Drybulk Newbuildings
that we have agreed to acquire
|
Hull
no.
|
Type / No. of
Vessels
|
Dwt
|
Expected
Delivery
|
Ultramax
|
Hull no.
DY152
|
Ultramax
|
63,500
|
Q3 2014
|
Hull no.
DY153
|
Ultramax
|
63,500
|
Q3 2014
|
Hull no.
DY4050
|
Ultramax
|
63,500
|
Q2 2015
|
Hull no.
DY4052
|
Ultramax
|
63,500
|
Q2 2015
|
Total
Ultramax
|
4
|
254,000
|
|
Kamsarmax
|
Hull no.
YZJ1144
|
Kamsarmax
|
81,800
|
Q2 2015
|
Hull no.
YZJ1145
|
Kamsarmax
|
81,800
|
Q2 2015
|
Hull no.
YZJ1142
|
Kamsarmax
|
81,800
|
Q4 2015
|
Total
Kamsarmax
|
3
|
245,400
|
|
Grand
Total
|
7
|
499,400
|
|
Summary Fleet
Data
(Expressed in
United States Dollars where applicable)
|
|
Quarter
Ended
June 30,
2013
|
Quarter
Ended
June 30,
2014
|
Six Months Ended
June 30, 2013
|
Six Months Ended
June 30, 2014
|
FLEET
DATA
|
Average number of
vessels (1)
|
13.0
|
14.0
|
12.8
|
14.0
|
Calendar days for
fleet (2)
|
1,183
|
1,274
|
2,325
|
2,528
|
Available days for
fleet (3)
|
1,135
|
1,256
|
2,260
|
2,467
|
Operating days for
fleet (4)
|
1,135
|
1,238
|
2,258
|
2,436
|
Fleet utilization
(5)
|
100.0%
|
98.6%
|
99.9%
|
98.7%
|
AVERAGE DAILY
RESULTS
|
Time charter
equivalent (6)
|
10,476
|
7,870
|
10,930
|
8,208
|
Vessel operating
expenses (7)
|
4,661
|
4,211
|
4,557
|
4,236
|
Dry-docking expenses
(8)
|
1,037
|
562
|
730
|
868
|
Management fees -
related party adjusted (9)
|
1,004
|
1,060
|
1,010
|
1,058
|
General and
administrative expenses adjusted (10)
|
1,198
|
1,117
|
2,102
|
1,169
|
Total vessel
operating expenses adjusted (11)
|
7,900
|
6,950
|
8,399
|
7,331
|
|
|
(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
- 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
(Expressed in
thousands of United States Dollars where applicable, except for
TCE)
|
|
Quarter
Ended
June 30,
2013
|
Quarter
Ended
June 30,
2014
|
Six Months
Ended
June 30,
2013
|
Six Months
Ended
June 30,
2014
|
Charter
Revenue
|
14,684
|
14,666
|
28,909
|
28,903
|
Commissions
|
(806)
|
(842)
|
(1,578)
|
(1,650)
|
Voyage Expenses,
net
|
(1,988)
|
(4,081)
|
(2,653)
|
(7,259)
|
Net Revenue, net of
voyage expenses
|
11,890
|
9,743
|
24,678
|
19,994
|
Total operating
days
|
1,135
|
1,238
|
2,258
|
2,436
|
Time Charter
Equivalent
|
10,476
|
7,870
|
10,930
|
8,208
|
Condensed Cash
Flow Information (Unaudited)
(Expressed in
thousands of United States Dollars)
|
|
Six Months
Ended
June 30,
2013
|
Six Months
Ended
June 30,
2014
|
Cash and Cash
Equivalents, beginning of period
|
17,677
|
31,302
|
Cash generated from /
(used in):
|
Operating
Activities
|
1,948
|
(341)
|
Investing
Activities
|
(41)
|
(63,927)
|
Financing
Activities
|
(7,887)
|
55,169
|
Net decrease in Cash
and Cash Equivalents
|
(5,980)
|
(9,099)
|
Cash and Cash
Equivalents, end of period
|
11,697
|
22,203
|
Reconciliation of
U.S. GAAP Financial Information to Non-GAAP Financial
Information
EBITDA and
Adjusted EBITDA Reconciliation (1)
(Expressed in
thousands of United States Dollars)
|
|
Quarter
Ended
June 30,
2013
|
Quarter
Ended
June 30,
2014
|
Six Months Ended
June 30, 2013
|
Six Months Ended
June 30, 2014
|
Net Income /
(Loss)
|
17
|
(9,652)
|
(3,494)
|
(35,537)
|
Plus Net interest
expense, including interest expense from interest rate
swaps
|
1,928
|
3,009
|
3,856
|
5,415
|
Plus
Depreciation
|
4,251
|
4,485
|
8,385
|
8,912
|
EBITDA
|
6,196
|
(2,158)
|
8,747
|
(21,210)
|
Adjusted EBITDA
Reconciliation
|
Net Income /
(Loss)
|
17
|
(9,652)
|
(3,494)
|
(35,537)
|
Impairment
loss
|
-
|
-
|
-
|
15,695
|
Gain from sale of
assets
|
-
|
(403)
|
-
|
(403)
|
Gain from marketable
securities, net
|
-
|
(12)
|
-
|
(12)
|
Loss on investment in
affiliate
|
-
|
3,101
|
391
|
5,855
|
Unrealized (gain) /
loss on interest rate swaps
|
(271)
|
108
|
(509)
|
(69)
|
Non-cash expenses
from the amortization of share based compensation cost recognized
and share based compensation to the management company
|
194
|
246
|
672
|
1,359
|
Write off of
financing expenses
|
-
|
1,028
|
-
|
1,511
|
Adjusted Net
Loss
|
(60)
|
(5,584)
|
(2,940)
|
(11,601)
|
Plus Net interest
expense, net of write off of financing expenses, including interest
expense from swaps
|
1,928
|
1,981
|
3,856
|
3,904
|
Plus
Depreciation
|
4,251
|
4,485
|
8,385
|
8,912
|
Adjusted
EBITDA
|
6,119
|
882
|
9,301
|
1,215
|
|
|
(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
(Expressed in
thousands of United States Dollars - except for shares and share
data)
|
U.S. GAAP
Financial Information
|
Quarter
Ended
June 30,
2013
|
Quarter
Ended
June 30,
2014
|
Six Months
Ended
June 30,
2013
|
Six Months
Ended
June 30,
2014
|
Net Income /
(Loss)
|
17
|
(9,652)
|
(3,494)
|
(35,537)
|
Net Income / (Loss)
attributable to non-vested share awards
|
-
|
(133)
|
(66)
|
(571)
|
Net Income / (Loss)
available to common shareholders
|
17
|
(9,519)
|
(3,428)
|
(34,966)
|
Weighted average
number of common shares basic
|
11,041,107
|
24,281,164
|
11,016,733
|
22,414,824
|
Weighted average
number of common shares diluted
|
11,133,500
|
24,281,164
|
11,016,733
|
22,414,824
|
Earnings / (Loss) per
common share basic and diluted
|
0.00
|
(0.39)
|
(0.31)
|
(1.56)
|
Reconciliation of
Net Income / (Loss) to Adjusted Net Income / (Loss)
|
|
|
|
|
Net Income /
(Loss)
|
17
|
(9,652)
|
(3,494)
|
(35,537)
|
Impairment
loss
|
-
|
-
|
-
|
15,695
|
Gain from sale of
assets
|
-
|
(403)
|
-
|
(403)
|
Gain from marketable
securities, net
|
-
|
(12)
|
-
|
(12)
|
Loss on investment in
affiliate
|
-
|
3,101
|
391
|
5,855
|
Unrealized (gain) /
loss on interest rate swaps
|
(271)
|
108
|
(509)
|
(69)
|
Non-cash expenses
from the amortization of share based compensation cost recognized
and share based compensation to the management company
|
194
|
246
|
672
|
1,359
|
Write off of
financing expenses
|
-
|
1,028
|
-
|
1,511
|
Adjusted Net Loss
(1)
|
(60)
|
(5,584)
|
(2,940)
|
(11,601)
|
Adjusted Net Loss
attributable to non-vested share awards
|
(1)
|
(77)
|
(56)
|
(186)
|
Adjusted Net Loss
available to common shareholders
|
(59)
|
(5,507)
|
(2,884)
|
(11,415)
|
Weighted average
number of common shares basic
|
11,041,107
|
24,281,164
|
11,016,733
|
22,414,824
|
Weighted average
number of common shares diluted
|
11,133,500
|
24,281,164
|
11,016,733
|
22,414,824
|
Adjusted Loss per
common share basic and diluted (1)
|
(0.01)
|
(0.23)
|
(0.26)
|
(0.51)
|
|
|
(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.
|
Paragon Shipping
Inc.
|
Unaudited
Condensed Consolidated Balance Sheets
|
As of December 31,
2013 and June 30, 2014
|
(Expressed in
thousands of United States Dollars)
|
|
December 31,
2013
|
|
June 30,
2014
|
Assets
|
|
|
|
|
|
|
|
Cash and restricted
cash (current and non-current)
|
41,312
|
|
34,162
|
Vessels,
net
|
306,136
|
|
323,235
|
Advances for vessels
under construction
|
45,209
|
|
66,243
|
Other fixed assets,
net
|
596
|
|
511
|
Investment in
affiliate
|
11,309
|
|
5,191
|
Other
assets
|
14,984
|
|
15,075
|
|
|
|
|
Total
Assets
|
419,546
|
|
444,417
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
Total debt
|
180,115
|
|
198,182
|
Total other
liabilities
|
6,780
|
|
8,047
|
Total shareholders'
equity
|
232,651
|
|
238,188
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
419,546
|
|
444,417
|
Paragon Shipping
Inc.
|
Unaudited
Condensed Consolidated Statements of Comprehensive Income /
(Loss)
|
For the three
months ended June 30, 2013 and 2014
|
(Expressed in
thousands of United States Dollars - except for shares and share
data)
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
June 30,
2013
|
|
June 30,
2014
|
Revenue
|
|
|
|
Charter
revenue
|
14,684
|
|
14,666
|
Commissions
|
(806)
|
|
(842)
|
Net
Revenue
|
13,878
|
|
13,824
|
Expenses /
(Income)
|
|
|
|
Voyage expenses,
net
|
1,988
|
|
4,081
|
Vessels operating
expenses
|
5,514
|
|
5,365
|
Dry-docking
expenses
|
1,227
|
|
716
|
Management fees -
related party
|
1,187
|
|
1,350
|
Depreciation
|
4,251
|
|
4,485
|
General and
administrative expenses
|
1,611
|
|
1,669
|
Bad debt
provisions
|
(17)
|
|
15
|
Gain from sale of
assets
|
-
|
|
(403)
|
Gain from marketable
securities, net
|
(3,113)
|
|
(12)
|
Operating Income /
(Loss)
|
1,230
|
|
(3,442)
|
Other Income /
(Expenses)
|
|
|
|
Interest and finance
costs
|
(1,860)
|
|
(2,812)
|
Gain / (loss) on
derivatives, net
|
35
|
|
(310)
|
Interest
income
|
168
|
|
5
|
Equity in net income
of affiliate
|
410
|
|
18
|
Loss on investment in
affiliate
|
-
|
|
(3,101)
|
Foreign currency gain
/ (loss)
|
34
|
|
(10)
|
Total Other Expenses,
net
|
(1,213)
|
|
(6,210)
|
Net Income /
(Loss)
|
17
|
|
(9,652)
|
|
|
|
|
Other
Comprehensive Income / (Loss)
|
|
|
|
Unrealized gain on
cash flow hedges
|
401
|
|
144
|
Transfer of realized
loss on cash flow hedges to "Interest and finance costs"
|
78
|
|
22
|
Equity in other
comprehensive income / (loss) of affiliate
|
91
|
|
(10)
|
Unrealized (loss) /
gain on change in fair value of marketable securities
|
(134)
|
|
183
|
Transfer of gain on
change in fair value of marketable securities to
"Gain from marketable securities, net"
|
-
|
|
(12)
|
Total Other
Comprehensive Income
|
436
|
|
327
|
|
|
|
|
Comprehensive
Income / (Loss)
|
453
|
|
(9,325)
|
|
|
|
|
Earnings / (Loss)
per Class A common share, basic and diluted
|
$ 0.00
|
|
($0.39)
|
Weighted average
number of Class A common shares, basic
|
11,041,107
|
|
24,281,164
|
Weighted average
number of Class A common shares, diluted
|
11,133,500
|
|
24,281,164
|
Paragon Shipping
Inc.
|
Unaudited
Condensed Consolidated Statements of Comprehensive
Loss
|
For the six months
ended June 30, 2013 and 2014
|
(Expressed in
thousands of United States Dollars - except for shares and share
data)
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2013
|
|
June 30,
2014
|
Revenue
|
|
|
|
Charter
revenue
|
28,909
|
|
28,903
|
Commissions
|
(1,578)
|
|
(1,650)
|
Net
Revenue
|
27,331
|
|
27,253
|
Expenses /
(Income)
|
|
|
|
Voyage expenses,
net
|
2,653
|
|
7,259
|
Vessels operating
expenses
|
10,595
|
|
10,710
|
Dry-docking
expenses
|
1,698
|
|
2,193
|
Management fees -
related party
|
2,683
|
|
3,554
|
Depreciation
|
8,385
|
|
8,912
|
General and
administrative expenses
|
5,222
|
|
3,434
|
Impairment
loss
|
-
|
|
15,695
|
Bad debt
provisions
|
-
|
|
15
|
Gain from sale of
assets
|
-
|
|
(403)
|
Gain from marketable
securities, net
|
(3,113)
|
|
(12)
|
Other
income
|
-
|
|
(40)
|
Operating
Loss
|
(792)
|
|
(24,064)
|
Other Income /
(Expenses)
|
|
|
|
Interest and finance
costs
|
(3,761)
|
|
(5,022)
|
Gain / (loss) on
derivatives, net
|
20
|
|
(336)
|
Interest
income
|
394
|
|
12
|
Equity in net income
/ (loss) of affiliate
|
979
|
|
(258)
|
Loss on investment in
affiliate
|
(391)
|
|
(5,855)
|
Foreign currency gain
/ (loss)
|
57
|
|
(14)
|
Total Other Expenses,
net
|
(2,702)
|
|
(11,473)
|
Net
Loss
|
(3,494)
|
|
(35,537)
|
|
|
|
|
Other
Comprehensive Income / (Loss)
|
|
|
|
Unrealized gain on
cash flow hedges
|
404
|
|
131
|
Transfer of realized
loss on cash flow hedges to "Interest and finance costs"
|
154
|
|
99
|
Equity in other
comprehensive income / (loss) of affiliate
|
107
|
|
(5)
|
Unrealized loss on
change in fair value of marketable securities
|
(11)
|
|
(69)
|
Transfer of gain on
change in fair value of marketable securities to
"Gain from marketable securities, net"
|
-
|
|
(12)
|
Total Other
Comprehensive Income
|
654
|
|
144
|
|
|
|
|
Comprehensive
Loss
|
(2,840)
|
|
(35,393)
|
|
|
|
|
Loss per Class A
common share, basic and diluted
|
($0.31)
|
|
($1.56)
|
Weighted average
number of Class A common shares, basic and diluted
|
11,016,733
|
|
22,414,824
|
SOURCE Paragon Shipping Inc.