Euroseas Ltd. Reports Results for the Fourth Quarter and Year Ended December 31, 2007

02/28/08 Maroussi, Athens, Greece – Euroseas Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced today its results for the fourth quarter and year ended December 31, 2007.

Fourth quarter 2007 Highlights:

* Net income of $15.3 million or $0.55 basic and diluted earnings per share calculated on 27,610,993 basic weighted average number of shares outstanding and 27,748,850 diluted weighted average number of shares outstanding on total net revenues of $31.5 million. Ignoring the effect on the earnings for the quarter from the amortization of the fair value of time charter contracts acquired the earnings per share for the quarter ended December 31, 2007 would have been be $0.51 per share basic and diluted.
* Adjusted EBITDA was $21.5 million. Please refer to a subsequent section of the Press Release for a reconciliation of adjusted EBITDA to net income and cash flows provided by operating activities.
* An average 14.63 vessels were operated during the fourth quarter 2007 earning an average time charter equivalent rate of $26,479 per day.
* Declared a quarterly dividend of $0.30 per share for the fourth quarter 2007 payable on March 14, 2008 to shareholders of record as of March 5, 2008

2007 Highlights:

* Net income of $40.7 million or $1.89 basic and $1.88 diluted earnings per share calculated on 21,566,619 basic weighted average number of shares outstanding and 21,644,920 diluted weighted average number of shares outstanding on total net revenues of $82.1 million. Ignoring the effect on the earnings for the year from the amortization of the fair value of time charter contracts acquired the earnings per share for the year ended December 31, 2007 would have been $1.91 per share basic and $1.90 per share diluted.
* Adjusted EBITDA was $61.7 million. Please refer to a subsequent section of the Press Release for a reconciliation of adjusted EBITDA to net income and cash flows provided by operating activities.
* An average 11.48 vessels were operated during 2007 earning an average time charter equivalent rate of $21,468 per day
* Declared quarterly dividends for the results of 2007, aggregating $1.08 per share.

Aristides Pittas, Chairman and CEO of Euroseas commented: “We are very pleased with the performance of our company in the fourth quarter of 2007 during which we reaped the benefits of our fleet growth and employment strategy. With a fleet of 15 vessels we have reached a critical size that allows us to balance our employment strategy and take advantage of market developments as we did during the fourth quarter of 2007. The growth of our dividend from $0.79 per share in 2006 to $1.08 per share in 2007, a 37% increase, is the best evidence of the effectiveness of our investment and employment strategy, especially since it represents only a fraction of our net income and cash flow. We have a strong balance sheet and we are well positioned to take advantage of additional investment opportunities to deploy the funds we raised in November 2007. We will continue executing our plan to grow our fleet by focusing on age and size segments of the drybulk and containership sectors which we believe maximize our risk-adjusted shareholder returns, a strategy that we believe will enable us to continue providing consistent and significant dividends and overall returns to our shareholders.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The results of 2007 reflect significantly higher revenues compared to 2006 due to the higher number of vessels in our fleet and the higher average time charter equivalent rate our vessels have achieved. Specifically during 2007, our fleet averaged 11.48 vessels vs. 8.09 in 2006 and earned on average $21,468 per vessel per day compared to $14,313 per vessel per day during 2006.

As of today, 65% of our ship capacity days in 2008 have been fixed under time charter contracts or protected from market fluctuations. We believe that our contract coverage gives us a solid revenue base for 2008 and beyond, more predictable cash flows and sufficient downside protection, while still allowing us to participate in the potential upside of the spot market.”

Fourth quarter 2007 Results:
For the fourth quarter of 2007, the Company reported total net revenues of $31.5 million and net income of $15.3 million representing a 165.1% and 222.7% increase, respectively, over total net revenues of $11.9 million and net income of $4.8 million during the fourth quarter of 2006. On average, 14.63 vessels were operated during the fourth quarter 2007 earning an average time charter equivalent rate of $26,479 per day compared to 8.51 vessels in the same period 2006 earning on average $15,774 per day.

Adjusted EBITDA for the fourth quarter of 2007 was $21.5 million, a 166.7% increase of $8.1 million during the fourth quarter of 2006. Please see below for Adjusted EBITDA reconciliation to net income and cash flow provided by operating activities.

Basic and diluted earnings per share for the fourth quarter of 2007 were $0.55, calculated on 27,610,993 basic weighted average number of shares outstanding and 27,748,850 diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $0.38 for the fourth quarter of 2006, calculated on 12,620,148 basic and diluted weighted average number of shares outstanding. The Company has recently declared a quarterly dividend of $0.30 per share, which represents its tenth consecutive quarterly dividend and a 37% increase over last year’s fourth quarter dividend.

Ignoring the effect on the earnings for the quarter from the amortization of the fair value of time charter contracts acquired the earnings per share for the quarter ended December 31, 2007 would have been $0.51 per share basic and diluted, and, for the quarter ended December 31, 2006 would have been $0.38 per share basic and diluted. Usually, security analysts do not include amortization of the fair value of period charter contracts in their published estimates of earnings per share.

Year Ended December 31, 2007 Results:
For the year ended December 31, 2007, the company reported total net revenues of $82.1 million and net income of $40.7 million, representing a 103.6% and 102.6% increase, respectively over 2006. Adjusted EBITDA for the year was $61.7 million, a 108.8% increase of $32.1 million over 2006 (please see below for Adjusted EBITDA reconciliation to net income and cash flow from operating activities). In the year ended December 31, 2006, net revenues were $40.3 million, net income was $20.1 million and EBITDA was $29.5 million. On average, 11.48 vessels were operated during 2007 earning an average time charter equivalent rate of $21,468 per day compared to 8.09 vessels in 2006 earning a time charter equivalent rate of $14,313. Results for the year ended December 31, 2007 included a capital gain of $3.4 million from the sale of M/V “Ariel”, while results for the year ended December 31, 2006 included a capital gain of $4.4 million from the sale of M/V “Pantelis P” and M/V “John P”, the three eldest of the Company’s vessels.

Basic and diluted earnings per share for the year ended December 31, 2007 were $1.89 and $1.88, respectively, calculated on 21,566,619 basic weighted average number of shares outstanding and 21,644,920 diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $1.60 for 2006 calculated on 12,535,365 basic and diluted weighted average number of shares outstanding.

Ignoring the effect on the earnings for the year from the amortization of the fair value of time charter contracts acquired the earnings per share would have been $1.91 basic and $1.90 diluted earnings per share for the year ended December 31, 2007 and $1.57 per share basic and diluted for the year ended December 31, 2006. Usually, security analysts do not include amortization of the fair value of period charter contracts in their published estimates of earnings per share.

About Euroseas Ltd.
Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 136 years. Euroseas trades on the NASDAQ Global Market under the ticker ESEA since January 31, 2007.

Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2000 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.

The Company has a fleet of 15 vessels, including 3 Panamax drybulk carriers, 2 Handysize drybulk carriers, 2 Intermediate container ships, 5 Handysize container ships, 2 Feeder container ships and a multipurpose dry cargo vessel. Euroseas’ 5 drybulk carriers have a total cargo capacity of 277,316 dwt, its 9 container ships will have a cargo capacity of 239,010 dwt or 15,321 teu and its 1 multipurpose vessel has a cargo capacity of 22,568 dwt or 950 teu.

Euroseas Ltd. Press Release