EuroDry : First Quarter of 2023

EuroDry Ltd.

Reports Results for the Quarter Ended March 31, 2023

Maroussi, Athens, Greece - May 15, 2023- EuroDry Ltd. (NASDAQ: EDRY, the "Company" or "EuroDry"), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three-month period ended March 31, 2023.

First Quarter 2023 Highlights:

• Total net revenues of $11.3 million.
• Net loss of $1.5 million or $0.55 loss per share basic and diluted, respectively.
• Adjusted net income1 for the quarter of $0.4 million or $0.14 earnings per share basic and diluted, respectively, before unrealized loss on derivatives.
• Adjusted EBITDA1 was $2.4 million.
• An average of 10.0 vessels were owned and operated during the first quarter of 2023 earning an average time charter equivalent rate of $10,674 per day. Refer to a subsequent section of the Press Release for the definition and method of calculation of time charter equivalent rate.
• As of May 15, 2023, we had repurchased 198,731 shares of our common stock in the open market for $3.0 million, since the initiation of our repurchase plan of up to $10 million, announced in August 2022.

1Adjusted EBITDA, Adjusted net income and Adjusted earnings per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry's financial results presented in accordance with GAAP. Refer to a subsequent section of the Press Release for the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with GAAP.

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Aristides Pittas, Chairman and CEO of EuroDry commented:

"During the second half of last quarter and through mid-May 2023, drybulk earnings for Supramax and Panamax vessels have recovered from their mid-February lows to levels that are currently profitable for our fleet. However, the market has continued to be volatile as financial and other developments influence economic trends and, thus, influence demand for raw materials. In parallel, the drybulk orderbook as a percentage of the fleet dropped below 7% after hovering for the last three years around a low level of 8% by historical standards. This persistent underbuilding of the fleet along with increased environmentally-driven regulatory requirements that will likely result in slow steaming and increased scrapping, are destined to create in the following two to three years a "supply squeeze". It remains to be seen whether demand for raw materials will increase over the same timeframe for rates to meaningfully react.

"Our strategy remains to position our fleet and liquidity to deal with and take advantage of both the current environment and the expected developments in the markets. Most of our fleet is exposed to the market by being employed in short term or market linked contracts. At the same time, we selectively use the FFA markets to secure in the near-term rate levels for our vessels which we consider as profitable. We also continuously evaluate investment opportunities in modern vessels having built sufficient liquidity to grow organically by 20-30% if we identify accretive opportunities for our shareholders."

Tasos Aslidis, Chief Financial Officer of EuroDry commented:

"Our net revenues for the first quarter of 2023 were lower by 38.6% as compared to the first quarter of 2022. As a result of the depressed market rates, our vessels earned 56.7% lower average time charter equivalent rates during the quarter as compared to the first quarter of 2022. This effect was slightly offset by the increased number of vessels owned and operated in the first quarter of 2023 as compared to the same period of 2022.

"Vessel operating expenses were $4.7 million for the first quarter of 2023 as compared to $4.2 million for the same period of 2022. The increase is mainly attributable to the increased number of vessels operating in the first quarter of 2023 compared to the corresponding period in 2022 as well as the higher prices for all the categories of vessel supplies paid for our vessels compared to the same period of 2022. The latter is a result of the increased global inflation rates.

"Adjusted EBITDA during the first quarter of 2023 was $2.4 million compared to $12.7 million achieved for the first quarter of last year. As of March 31, 2023, our outstanding debt (excluding the unamortized loan fees) was $66.9 million versus restricted and unrestricted cash of approximately $24.0 million."

First Quarter 2023 Results:

For the first quarter of 2023, the Company reported total net revenues of $11.34 million representing a 37.9% decrease over total net revenues of $18.28 million during the first quarter of 2022, which was the result of the lower time charter rates our vessels earned during the first quarter of 2023 slightly offset by the increased number of vessels owned and operated in first quarter of 2023 compared to the same period of last year and the voyage charter revenue recognized in respect of one of our vessels while employed under a voyage charter. The Company reported net loss for the period of $1.54 million, as compared to a net income of $10.49 million for the same period of 2022.

Voyage expenses, net for the first quarter of 2023 were $2.44 million and mainly relate to expenses incurred by one of our vessels while employed under a voyage charter. For the first quarter of 2022, a gain on bunkers resulted in positive voyage expenses of $1.00 million. Depreciation expense for the first quarter of 2023 was $2.53 million compared to $2.46 million for the same period of 2022 as a result of the higher number of vessels owned and operated in the first quarter of 2023.

Vessel operating expenses increased to $4.69 million for the first quarter of 2023 from $4.23 million in the same period of 2022, mainly due to the higher number of vessels owned and operated as well as due to inflationary increases.

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Management fees for the period were $0.77 million compared to $0.70 million for the same period of 2022, again due to the increased number of vessels owned and operated in the first quarter of 2023, as well as due to the adjustment for inflation in the daily vessel management fee, effective from January 1, 2023, increasing it from 720 Euros to 775 Euros, partly offset by the favorable movement of the euro/dollar exchange rate.

Similarly, general and administrative expenses were $0.80 million compared to $0.75 million, respectively, for the first quarter of 2023 as compared to the same period of last year. This increase in mainly due to the increased cost of our share-based compensation in the first quarter of 2023 compared to the same period of last year.

In the first quarter of 2023 one of our vessels was drydocked in order to pass her intermediate survey, which was completed in the second quarter of 2023. The above drydocking expenses amounted to $0.51 million during the first quarter of 2023. In the corresponding period of 2022, one of our vessels was drydocked in order to pass her special survey for a total cost of $0.90 million.

Interest and other financing costs for the first quarter of 2023 increased to $1.47 million as compared to $0.65 million for the same period of 2022. Interest expense during the first quarter of 2023 was higher due to the increased benchmark rates of our loans during the period as compared to the same period of last year.

For the three months ended March 31, 2023, the Company recognized a $1.99 million unrealized loss and a $1.81 million realized gain on four interest rate swaps, three of which were terminated early in the first quarter of 2023, as well as a $0.04 million unrealized gain and a $0.24 million realized gain on forward freight agreement contracts, as compared to a $0.90 million gain on derivatives for the same period of 2022, comprised of an unrealized gain of $1.00 million and a realized loss of $0.10 million on four interest rate swaps.

On average, 10.00 vessels were owned and operated during the first quarter of 2023 earning an average time charter equivalent rate of $10,674 per day compared to 9.54 vessels in the same period of 2022 earning on average $24,636 per day.

Adjusted EBITDA for the first quarter of 2023 was $2.36 million compared to $12.71 million achieved during the first quarter of 2022.

Basic and diluted loss per share for the first quarter of 2023 was $0.55, calculated on 2,803,049 basic and diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $3.69 and $3.64 for the first quarter of 2022, calculated on 2,847,091 basic and 2,879,436 diluted weighted average number of shares outstanding.

Excluding the effect on the earnings for the quarter of the unrealized (gain) / loss on derivatives, the adjusted earnings for the quarter ended March 31, 2023 would have been $0.14 per share basic and diluted, compared to adjusted earnings of $3.34 and $3.30 per share basic and diluted, respectively for the quarter ended March 31, 2022. Usually, security analysts do not include the above item in their published estimates of earnings per share.

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Fleet Profile:

The EuroDry Ltd. fleet profile is as follows:

Name

Type

Dwt

Year

Employment(*)

Built

TCE Rate ($/day)

Dry Bulk Vessels

Hire 105.5% of the

Average Baltic

EKATERINI

Kamsarmax

82,000

2018

TC until Mar-25

Kamsarmax P5TC(**)

index

Hire 105.5% of the

XENIA

Kamsarmax

82,000

2016

TC until Mar-24

Average Baltic

Kamsarmax P5TC(**)

index

ALEXANDROS P.

Ultramax

63,500

2017

TC until Jul-23

$16,250

GOOD HEART

Ultramax

62,996

2014

TC until Jun-

$29,000(***)

23(***)

MOLYVOS LUCK

Supramax

57,924

2014

TC until May-23

$12,000

EIRINI P

Panamax

76,466

2004

TC until Oct-23

$15,750

SANTA CRUZ

Panamax

76,440

2005

TC until Jun-23

$10,400

STARLIGHT

Panamax

75,845

2004

TC until May-23

$11,000

TASOS

Panamax

75,100

2000

TC until Jul-23

$12,700

BLESSED LUCK

Panamax

76,704

2004

TC until Jan-24

$15,800

Total Dry Bulk Vessels

10

728,975

Note:

1. TC denotes time charter. Charter duration indicates the earliest redelivery date.

1. The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.

1. Vessel has missed her lay/can period due to US Coast Guard detention at Corpus Christi. Charterer has not yet declared whether it will cancel the charter.

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Summary Fleet Data:

				Three months,	Three months,
				ended	ended
				March 31, 2022	March 31, 2023
FLEET DATA
Average number of vessels (1)		9.54	10.00
Calendar days for fleet (2)		859.0	900.0
Scheduled off-hire days incl. laid-up (3)	27.0	6.0
Available days for fleet (4) = (2) - (3)		832.0	894.0
Commercial off-hire days (5)		0.0	2.2
Operational off-hire days (6)		3.0	2.5
Voyage days for fleet (7) = (4) - (5) - (6)	829.0	889.3
Fleet utilization (8) = (7) / (4)		99.6%	99.5%
Fleet utilization, commercial (9) = ((4) - (5))	100.0%	99.8%
/ (4)
Fleet utilization, operational (10) = ((4) -	99.6%	99.7%
(6)) / (4)
AVERAGE DAILY RESULTS
Time charter equivalent rate (11)		24,636	10,674
Vessel	operating	expenses	excl.
drydocking expenses (12)		5,737	6,065
General and administrative expenses (13)	873	888
Total vessel operating expenses (14)		6,610	6,953
Drydocking expenses (15)		1,050	564

1. Average number of vessels is the number of vessels that constituted the Company's fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of the Company's fleet during the period divided by the number of calendar days in that period.
2. Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was owned by us including off-hire days associated with major repairs, drydockings or special or intermediate surveys or days of vessels in lay-up. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.
3. The scheduled off-hire days including vessels laid-up are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up.
4. Available days. We define available days as the total number of Calendar days in a period net of scheduled off-hire days incl. laid up. We use available days to measure the number of days in a period during which vessels were available to generate revenues.
5. Commercial off-hire days. We define commercial off-hire days as days a vessel is idle without employment.
6. Operational off-hire days. We define operational off-hire days as days associated with unscheduled repairs or other off-hire time related to the operation of the vessels.

1. Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of commercial and operational off-hire days. We use voyage days to measure the number of days in a period during which vessels actually generate revenues or are sailing for repositioning purposes.
2. Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our available days during that period. We use fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing

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