PARN SHIP8.375N21 ATHENS, Greece, Nov. 5, 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 third quarter and nine months ended September 30, 2014.
Third Quarter 2014 Highlights & Recent Developments
-- Net revenue, net of voyage expenses, of $8.4 million in the third
quarter of 2014
-- Reduced average daily adjusted total vessel operating expenses by 9.2%
year-over-year
-- Adjusted EBITDA of $0.7 million in the third quarter of 2014
-- Adjusted net loss of $6.1 million, or $0.25 per common share, in the
third quarter of 2014
-- With the delivery of the M/V Gentle Seas and the M/V Peaceful Seas, the
Company's fleet increased to 16 vessels in four size classes.
Financial Highlights
(Expressed in thousands of United States Dollars, except for vessel data, TCE and share data)
Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2014 September 30, 2013 September 30, 2014
------------------ ------------------ ------------------ ------------------
Average number
of vessels 13.0 14.0 12.9 14.0
-------------- ---- ---- ---- ----
Time charter
equivalent
rate (TCE) (1) 9,274 6,570 10,360 7,645
--------------- ----- ----- ------ -----
Net Revenue,
net of voyage
expenses 10,981 8,383 35,659 28,377
-------------- ------ ----- ------ ------
EBITDA (1) (1,431) 744 7,317 (20,466)
--------- ------ --- ----- -------
Adjusted EBITDA
(1) 5,658 673 14,960 1,888
--------------- ----- --- ------ -----
Net Loss (7,499) (6,037) (10,992) (41,574)
-------- ------ ------ ------- -------
Adjusted Net
Loss (1) (410) (6,108) (3,349) (17,709)
------------ ---- ------ ------ -------
Loss per common
share basic
and diluted (0.65) (0.25) (0.97) (1.78)
--------------- ----- ----- ----- -----
Adjusted Loss
per common
share basic
and diluted
(1) (0.04) (0.25) (0.30) (0.76)
------------- ----- ----- ----- -----
(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, "During the third quarter, the Baltic Dry Index continued to be weaker year-over-year. More specifically, Panamax charter rates averaged $5,865 per day during the quarter, compared to an average Panamax charter rate of $8,926 per day for the same period in 2013. Despite the ongoing weakness, we continue to outperform the market with an average time charter equivalent rate of $6,570 for the third quarter, which was 12.0% above the market, but 29.2% below the time charter equivalent rate of $9,274 we reported for the same period in 2013. This decrease in charter rates translated to net revenues, net of voyage expenses, of $8.4 million, and an adjusted net loss of $6.1 million in the third quarter of 2014, compared to net revenues, net of voyage expenses, of $11.0 million, and an adjusted net loss of $0.4 million in the third quarter of 2013."
Mr. Bodouroglou continued, "In October, we took delivery of our first two eco-design Ultramax vessels, which increased our fleet size to 16 and reduced the average age of our fleet to 7.1 years from 8.1 years. These modern eco-design vessels are a part of our fleet renewal program and will significantly improve our market position with our charterers. We immediately deployed these two vessels in the spot market on attractive short-term time charters."
Mr. Bodouroglou concluded, "We have taken great strides this year to improve our balance sheet, reduce our cash flow breakeven levels and improve our fleet profile while maintaining full spot exposure to ensure that we are well positioned to take advantage of any improvements in the drybulk market. To that extent, we have seen an improvement in drybulk spot charter rates since mid-October, and we expect rates to continue to improve through the end of this year and into 2015."
Newbuilding Program Update
In October 2014, the Company took delivery of its first two Ultramax drybulk carriers, the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153), from Yangzhou Dayang Shipbuilding Co. Ltd. in China. These vessels have a cargo carrying capacity of approximately 63,350 dwt each. In October 2014, an aggregate amount of $35.7 million was paid to the shipyard representing the final installment for the two vessels, which was mainly financed from the loan facility with HSH Nordbank AG, following a total drawdown of $34.4 million. Both vessels have already been deployed under short-term time charters.
Currently, the Company's outstanding newbuilding program consists of 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 $148.2 million, of which $101.7 million is currently outstanding. With the $160.0 million syndicated secured loan facility led by Nordea Bank Finland Plc, the Company has currently secured debt financing of up to $78.0 million, in the aggregate, for all of its outstanding Ultramax and two of its Kamsarmax newbuilding drybulk carriers.
Senior Unsecured Notes Due 2021
On August 8, 2014, the Company completed the offering of 1,000,000 senior unsecured notes due 2021 (the "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 net proceeds from the offering amounted to approximately $23.9 million, net of underwriting discounts and commissions of $0.8 million, and offering expenses payable by the Company of $0.3 million.
Financing Update
On September 30, 2014, the Company completed the documentation for supplementing the loan agreement with Unicredit Bank AG and proceeded with a prepayment of $7.0 million as previously agreed. According to the supplemental agreement, the financial covenants relating to the minimum debt service coverage ratio, the minimum market value adjusted net worth and the maximum leverage ratio are eliminated until the maturity of the loan. In addition, the required ratio of the fair market value of mortgaged vessels to outstanding loan increased from 110% to 130% at all times.
In addition, on September 30, 2014, the Company proceeded with a prepayment of $4.0 million with respect to its loan agreement with Bank of Ireland in return for a significant reduction in the next eight quarterly installments and an increase in the balloon at maturity.
Following the above mentioned prepayments, the Company reduced its principal repayment obligations through 2015 on amounts currently drawn, from $32.9 million for the full period, or $6.6 million on average per quarter, to $25.4 million for the full period, or $5.1 million on average per quarter.
Third Quarter 2014 Financial Results
Gross charter revenue for the third quarter of 2014 was $12.8 million, compared to $14.1 million for the third quarter of 2013. The Company reported a net loss of $6.0 million, or $0.25 per basic and diluted share, for the third quarter of 2014, calculated based on a weighted average number of basic and diluted shares outstanding for the period of 24,253,142 and reflecting the impact of the non-cash items discussed below. For the third quarter of 2013, the Company reported net loss of $7.5 million, or $0.65 per basic and diluted share, calculated based on a weighted average number of basic and diluted shares of 11,307,194.
Excluding all non-cash items described below, the adjusted net loss for the third quarter of 2014 was $6.1 million, or $0.25 per basic and diluted share, compared to adjusted net loss of $0.4 million, or $0.04 per basic and diluted share, for the third quarter of 2013.
EBITDA for the third quarter of 2014 was positive $0.7 million, compared to negative $1.4 million for the third quarter of 2013. EBITDA for the third quarter of 2014 was calculated by adding the net loss of $6.0 million to net interest expense, including interest expense from interest rate swaps, and depreciation that in the aggregate amounted to $6.8 million. Adjusted EBITDA, excluding all non-cash items described below, was $0.7 million for the third quarter of 2014, compared to $5.7 million for the third quarter of 2013.
The Company operated an average of 14.0 vessels during the third quarter of 2014, earning an average TCE rate of $6,570 per day, compared to an average of 13.0 vessels during the third quarter of 2013, earning an average TCE rate of $9,274 per day.
Adjusted total vessel operating expenses, which included vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, and excluded share-based compensation, were $8.3 million for the third quarter of 2014, compared to $7.8 million for the third quarter of 2013. On a daily basis, adjusted total vessel operating expenses for the third quarter of 2014 were approximately $6,471 per vessel per day, compared to $6,510 per vessel per day for the third quarter of 2013.
As of September 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 November 5, 2014, for the third quarter of 2014, the Company recorded income of $0.8 million, compared to $0.3 million income for the third quarter of 2013.
Third Quarter 2014 Non-cash and One-off Items
The Company's results for the three months ended September 30, 2014 included the following non-cash items:
-- An unrealized gain on interest rate swaps of $0.3 million, or $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.
In the aggregate, these non-cash items did not materially affect the Company's earnings for the three months ended September 30, 2014.
Nine months ended September 30, 2014 Financial Results
Gross charter revenue for the nine months ended September 30, 2014 was $41.7 million, compared to $43.0 million for the nine months ended September 30, 2013. The Company reported a net loss of $41.6 million, or $1.78 per basic and diluted share, for the nine months ended September 30, 2014, calculated based on a weighted average number of basic and diluted shares outstanding for the period of 23,023,546 and reflecting the impact of the non-cash items discussed below. For the nine months ended September 30, 2013, the Company reported a net loss of $11.0 million, or $0.97 per basic and diluted share, calculated based on a weighted average number of basic and diluted shares of 11,114,617.
Excluding all non-cash items described below, the adjusted net loss for the nine months ended September 30, 2014 was $17.7 million, or $0.76 per basic and diluted share, compared to adjusted net loss of $3.3 million, or $0.30 per basic and diluted share, for the nine months ended September 30, 2013.
EBITDA for the nine months ended September 30, 2014 was negative $20.5 million, compared to positive $7.3 million for the nine months ended September 30, 2013. EBITDA for the nine months ended September 30, 2014 was calculated by adding the net loss of $41.6 million to net interest expense, including interest expense from interest rate swaps, and depreciation that in the aggregate amounted to $21.1 million. Adjusted EBITDA, excluding all non-cash items described below, was $1.9 million for the nine months ended September 30, 2014, compared to $15.0 million for the nine months ended September 30, 2013.
The Company operated an average of 14.0 vessels during the nine months ended September 30, 2014, earning an average TCE rate of $7,645 per day, compared to an average of 12.9 vessels during the nine months ended September 30, 2013, earning an average TCE rate of $10,360 per day.
Adjusted total vessel operating expenses, which included vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, and excluded share-based compensation, were $26.9 million for the nine months ended September 30, 2014, or 1.6% lower than the adjusted total vessel operating expenses of $27.3 million for the nine months ended September 30, 2013, despite having a larger fleet. On a daily basis, adjusted total vessel operating expenses for the nine months ended September 30, 2014 were approximately $7,040 per vessel per day, or 9.2% lower than the adjusted total vessel operating expenses of $7,757 per vessel per day for the nine months ended September 30, 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 nine months ended September 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 nine months ended September 30, 2014, relates to the gain on the sale of the 4,800 TEU containership newbuilding that was concluded in May 2014.
Based on the unaudited financial statements reported by Box Ships on November 5, 2014, for the nine months ended September 30, 2014, the Company recorded income of $0.6 million, compared to $1.3 million income for the nine months ended September 30, 2013.
In the nine months ended September 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. As of September 30, 2014, the fair value of the Company's investment in Box Ships based on the quoted share price of Box Ships on NYSE was lower than the book value of the investment by $1.9 million. The Company did not consider the respective difference as other than temporary and therefore, the investment was not impaired any further.
Nine months ended September 30, 2014 Non-cash and One-off Items
The Company's results for the nine months ended September 30, 2014 included the following non-cash items:
-- Impairment loss of $15.7 million, or $0.67 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 $0.25 per basic and
diluted share.
-- An unrealized gain on interest rate swaps of $0.4 million, or $0.02 per
basic and diluted share.
-- Non-cash expenses of $1.6 million, or $0.07 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 $0.7 million.
-- Write off of financing expenses of $1.5 million, or $0.06 per basic and
diluted share.
In the aggregate, these non-cash items decreased the Company's earnings by $23.9 million, which represents a $1.02 decrease in earnings per basic and diluted share, for the nine months ended September 30, 2014.
Cash Flows
For the nine months ended September 30, 2014, the Company's net cash used in operating activities was $3.7 million, compared to net cash generated from operating activities of $2.1 million for the nine months ended September 30, 2013. For the nine months ended September 30, 2014, net cash used in investing activities was $65.6 million and net cash from financing activities was $57.0 million. For the nine months ended September 30, 2013, net cash from investing activities was $5.4 million and net cash from financing activities was $19.0 million.
Conference Call and Webcast details
The Company's management team will host a conference call to discuss its third quarter and nine months ended September 30, 2014 results on November 6, 2014, at 10:00 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 10055402.
Slides and audio webcast
There will also be a simultaneous live webcast through the Company's website, www.paragonship.com. Participants should register on the website approximately ten minutes prior to the start of the webcast. If you would like a copy of the release mailed or faxed, please contact Allen & Caron Investor Relations at 212-691-8087.
About Paragon Shipping Inc.
Paragon Shipping is an international shipping company incorporated under the laws of the Republic of the Marshall Islands with executive offices in Athens, Greece, specializing in the transportation of drybulk cargoes. Paragon Shipping's current fleet consists of sixteen drybulk vessels with a total carrying capacity of 980,380 dwt. In addition, Paragon Shipping's current newbuilding program consists of two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered in 2015. The Company's common shares and senior notes trade on NASDAQ under the symbols "PRGN" and "PRGNL," respectively. For more information, visit: www.paragonship.com. The information contained on 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 November 5, 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
------------- --- -------
Ultramax
--------
Gentle Seas Ultramax 63,350 2014
----------- -------- ------ ----
Peaceful Seas Ultramax 63,331 2014
------------- -------- ------ ----
Total Ultramax 2 126,681
-------------- --- -------
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 16 980,380
----------- --- -------
Drybulk Newbuildings that we have agreed to acquire
Hull
no. Type / No. of Vessels Dwt Expected Delivery
---- --------------------- --- -----------------
Ultramax
--------
Hull
no.
DY4050 Ultramax 63,500 Q2 2015
------- -------- ------ -------
Hull
no.
DY4052 Ultramax 63,500 Q2 2015
------- -------- ------ -------
Total
Ultramax 2 127,000
--------- --- -------
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 5 372,400
------ --- -------
Summary Fleet Data
(Expressed in United States Dollars where applicable)
Quarter Ended Quarter Ended Nine Months Ended September 30, Nine Months Ended September 30,
2013 2014
September 30, 2013 September 30, 2014
------------------ ------------------
FLEET DATA
----------
Average number of
vessels (1) 13.0 14.0 12.9 14.0
----------------- ---- ---- ---- ----
Calendar days for
fleet (2) 1,196 1,288 3,521 3,816
----------------- ----- ----- ----- -----
Available days for
fleet (3) 1,196 1,288 3,456 3,755
------------------ ----- ----- ----- -----
Operating days for
fleet (4) 1,184 1,276 3,442 3,712
------------------ ----- ----- ----- -----
Fleet utilization
(5) 99.0% 99.1% 99.6% 98.9%
----------------- ---- ---- ---- ----
AVERAGE DAILY RESULTS
---------------------
Time charter
equivalent (6) 9,274 6,570 10,360 7,645
--------------- ----- ----- ------ -----
Vessel operating
expenses (7) 4,313 4,385 4,474 4,286
---------------- ----- ----- ----- -----
Dry-docking
expenses (8) - - 482 575
------------- --- --- --- ---
Management fees -
related party
adjusted (9) 1,023 1,034 1,014 1,050
----------------- ----- ----- ----- -----
General and
administrative
expenses adjusted
(10) 1,174 1,052 1,787 1,129
------------------ ----- ----- ----- -----
Total vessel
operating expenses
adjusted (11) 6,510 6,471 7,757 7,040
------------------- ----- ----- ----- -----
(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 Quarter Ended Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2014 September 30, 2013 September 30, 2014
------------------ ------------------ ------------------ ------------------
Charter Revenue 14,112 12,803 43,021 41,706
--------------- ------ ------ ------ ------
Commissions (758) (758) (2,336) (2,408)
----------- ---- ---- ------ ------
Voyage Expenses,
net (2,373) (3,662) (5,026) (10,921)
---------------- ------ ------ ------ -------
Net Revenue, net
of voyage
expenses 10,981 8,383 35,659 28,377
---------------- ------ ----- ------ ------
Total operating
days 1,184 1,276 3,442 3,712
--------------- ----- ----- ----- -----
Time Charter
Equivalent 9,274 6,570 10,360 7,645
------------ ----- ----- ------ -----
Condensed Cash Flow Information (Unaudited)
(Expressed in thousands of United States Dollars)
Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2014
------------------ ------------------
Cash
and
Cash
Equivalents,
beginning
of
period 17,677 31,302
------------- ------ ------
Cash generated from / (used in):
--------------------------------
Operating
Activities 2,132 (3,729)
---------- ----- ------
Investing
Activities 5,377 (65,598)
---------- ----- -------
Financing
Activities 19,050 57,014
---------- ------ ------
Net
increase
/
(decrease)
in
Cash
and
Cash
Equivalents 26,559 (12,313)
------------ ------ -------
Cash
and
Cash
Equivalents,
end
of
period 44,236 18,989
------------- ------ ------
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 Quarter Ended Nine Months Ended September 30, Nine Months Ended September 30,
2013 2014
September 30, 2013 September 30, 2014
------------------ ------------------
Net Loss (7,499) (6,037) (10,992) (41,574)
-------- ------ ------ ------- -------
Plus Net interest
expense, including
interest expense
from interest rate
swaps 1,770 2,247 5,626 7,662
------------------- ----- ----- ----- -----
Plus Depreciation 4,298 4,534 12,683 13,446
----------------- ----- ----- ------ ------
EBITDA (1,431) 744 7,317 (20,466)
------ ------ --- ----- -------
Adjusted EBITDA Reconciliation
------------------------------
Net Loss (7,499) (6,037) (10,992) (41,574)
-------- ------ ------ ------- -------
Impairment loss - - - 15,695
--------------- --- --- --- ------
Gain from sale of
assets - - - (403)
----------------- --- --- --- ----
Loss /(gain) from
marketable
securities, net 952 - 952 (12)
----------------- --- --- --- ---
Loss on investment
in affiliate 5,378 - 5,769 5,855
------------------ ----- --- ----- -----
Unrealized gain on
interest rate swaps (151) (319) (660) (388)
-------------------- ---- ---- ---- ----
Non-cash expenses
from the
amortization of
share based
compensation cost
recognized and
share based
compensation to the
management company 910 248 1,582 1,607
-------------------- --- --- ----- -----
Write off of
financing expenses - - - 1,511
------------------- --- --- --- -----
Adjusted Net Loss (410) (6,108) (3,349) (17,709)
----------------- ---- ------ ------ -------
Plus Net interest
expense, net of
write off of
financing expenses,
including interest
expense from swaps 1,770 2,247 5,626 6,151
-------------------- ----- ----- ----- -----
Plus Depreciation 4,298 4,534 12,683 13,446
----------------- ----- ----- ------ ------
Adjusted EBITDA 5,658 673 14,960 1,888
--------------- ----- --- ------ -----
(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 Quarter Ended Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2014 September 30, 2013 September 30, 2014
--- ------------------ ------------------ ------------------ ------------------
Net Loss (7,499) (6,037) (10,992) (41,574)
-------- ------ ------ ------- -------
Net Loss attributable
to non-vested share
awards (182) (83) (228) (653)
--------------------- ---- --- ---- ----
Net Loss available to
common shareholders (7,317) (5,954) (10,764) (40,921)
--------------------- ------ ------ ------- -------
Weighted average number
of common shares basic
and diluted 11,307,194 24,253,142 11,114,617 23,023,546
----------------------- ---------- ---------- ---------- ----------
Loss per common share
basic and diluted (0.65) (0.25) (0.97) (1.78)
--------------------- ----- ----- ----- -----
Reconciliation of Net Income /(Loss) to Adjusted Net
Income /(Loss)
----------------------------------------------------
Net Loss (7,499) (6,037) (10,992) (41,574)
-------- ------ ------ ------- -------
Impairment loss - - - 15,695
--------------- --- --- --- ------
Gain from sale of
assets - - - (403)
----------------- --- --- --- ----
Loss /(gain) from
marketable securities,
net 952 - 952 (12)
----------------------- --- --- --- ---
Loss on investment in
affiliate 5,378 - 5,769 5,855
--------------------- ----- --- ----- -----
Unrealized gain on
interest rate swaps (151) (319) (660) (388)
-------------------- ---- ---- ---- ----
Non-cash expenses from
the amortization of
share based
compensation cost
recognized and share
based compensation to
the management company 910 248 1,582 1,607
----------------------- --- --- ----- -----
Write off of financing
expenses - - - 1,511
---------------------- --- --- --- -----
Adjusted Net Loss (1) (410) (6,108) (3,349) (17,709)
-------------------- ---- ------ ------ -------
Adjusted Net Loss
attributable to non-
vested share awards (10) (84) (69) (278)
--------------------- --- --- --- ----
Adjusted Net Loss
available to common
shareholders (400) (6,024) (3,280) (17,431)
-------------------- ---- ------ ------ -------
Weighted average number
of common shares basic
and diluted 11,307,194 24,253,142 11,114,617 23,023,546
----------------------- ---------- ---------- ---------- ----------
Adjusted Loss per
common share basic and
diluted (1) (0.04) (0.25) (0.30) (0.76)
----------------------- ----- ----- ----- -----
(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
September 30, 2014
(Expressed in thousands of
United States Dollars)
--------------------------
December 31, 2013 September 30, 2014
Assets
Cash and restricted cash
(current and non-current) 41,312 31,101
Vessels, net 306,136 318,746
Advances for vessels under
construction 45,209 67,965
Other fixed assets, net 596 521
Investment in affiliate 11,309 6,026
Other assets 14,984 18,870
Total Assets 419,546 443,229
------------ ------- -------
Liabilities and Shareholders'
Equity
Total debt 180,115 201,039
Total other liabilities 6,780 9,744
Total shareholders' equity 232,651 232,446
Total Liabilities and
Shareholders' Equity 419,546 443,229
--------------------- ------- -------
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
For the three months ended September 30, 2013 and 2014
(Expressed in thousands of United States Dollars - except for shares and share data)
-----------------------------------------------------------------------------------
Three Months Ended Three Months Ended
September 30, 2013 September 30, 2014
Revenue
Charter revenue 14,112 12,803
Commissions (758) (758)
Net Revenue 13,354 12,045
----------- ------ ------
Expenses / (Income)
Voyage expenses, net 2,373 3,662
Vessels operating expenses 5,159 5,647
Management fees - related party 1,937 1,332
Depreciation 4,298 4,534
General and administrative expenses 1,601 1,604
Bad debt provisions 69 (15)
Gain from vessel early redelivery (2,268) -
Loss from marketable securities, net 952 -
Other expenses - 250
Operating Loss (767) (4,969)
-------------- ---- ------
Other Income / (Expenses)
Interest and finance costs (1,657) (2,001)
(Loss) / gain on derivatives, net (75) 68
Interest income 113 5
Equity in net income of affiliate 331 813
Loss on investment in affiliate (5,378) -
Foreign currency (loss) / gain (66) 47
Total Other Expenses, net (6,732) (1,068)
------------------------- ------ ------
Net Loss (7,499) (6,037)
Other Comprehensive Income / (Loss)
Unrealized loss on cash flow hedges (212) -
Transfer of realized loss on cash
flow hedges to "Interest and finance
costs" 78 -
Equity in other comprehensive (loss)
/income of affiliate (29) 22
Unrealized (loss) /gain on change in
fair value of marketable securities (1,094) 25
Transfer of loss on change in fair
value of marketable securities to 952 -
"Loss from marketable securities,
net"
---------------------------------
Total Other Comprehensive (Loss) /
Income (305) 47
Comprehensive Loss (7,804) (5,990)
Loss per Class A common share, basic
and diluted ($0.65) ($0.25)
Weighted average number of Class A
common shares, basic and diluted 11,307,194 24,253,142
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
For the nine months ended September 30, 2013 and 2014
(Expressed in thousands of United States Dollars - except for shares and share data)
-----------------------------------------------------------------------------------
Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2014
Revenue
Charter revenue 43,021 41,706
Commissions (2,336) (2,408)
Net Revenue 40,685 39,298
----------- ------ ------
Expenses / (Income)
Voyage expenses, net 5,026 10,921
Vessels operating expenses 15,754 16,357
Dry-docking expenses 1,698 2,193
Management fees - related party 4,620 4,886
Depreciation 12,683 13,446
General and administrative expenses 6,823 5,037
Impairment loss - 15,695
Bad debt provisions 69 -
Gain from sale of assets - (403)
Gain from vessel early redelivery (2,268) -
Gain from marketable securities, net (2,161) (12)
Other expenses - 211
Operating Loss (1,559) (29,033)
-------------- ------ -------
Other Income / (Expenses)
Interest and finance costs (5,418) (7,023)
Loss on derivatives, net (54) (268)
Interest income 506 17
Equity in net income of affiliate 1,310 555
Loss on investment in affiliate (5,769) (5,855)
Foreign currency (loss) / gain (8) 33
Total Other Expenses, net (9,433) (12,541)
------------------------- ------ -------
Net Loss (10,992) (41,574)
Other Comprehensive Income / (Loss)
Unrealized gain on cash flow hedges 192 131
Transfer of realized loss on cash
flow hedges to "Interest and finance
costs" 233 99
Equity in other comprehensive income
of affiliate 77 17
Unrealized loss on change in fair
value of marketable securities (1,105) (44)
Transfer of loss /(gain) on change
in fair value of marketable
securities to 952 (12)
"Gain from marketable securities,
net"
---------------------------------
Total Other Comprehensive Income 349 191
Comprehensive Loss (10,643) (41,383)
Loss per Class A common share, basic
and diluted ($0.97) ($1.78)
Weighted average number of Class A
common shares, basic and diluted 11,114,617 23,023,546
SOURCE Paragon Shipping Inc.
