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Management Commentary Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, “We are pleased to announce our results for the first quarter of 2012. For the three months ended March 31, 2012, we operated a fleet of 10 drybulk carriers; our EBITDA was $6.6 million, while we reported net income of $0.7 million. After adjusting for non-cash items, our EBITDA and net income increase to $7.0 million and $1.1 million, respectively.” Mr. Bodouroglou continued, “Regarding our fleet developments, on May 4 and June 18, 2012, we took delivery of our first newbuilding vessels; the M/V Prosperous Seas and the M/V Precious Seas, respectively. Each vessel has a carrying capacity of approximately 37,200 dwt tonnes and both were built in China. The outstanding balance of the contracted price of the vessels was fully financed with the syndicated loan facility led by Nordea that we had entered into in 2011, plus an additional equity contribution of $0.5 million. With these deliveries in place, we now operate a fleet of twelve drybulk carriers with an average age of 6.9 years, compared to the industry average of 9.2 years. By the end of 2012, and pro-forma for the delivery of our two remaining Handysize drybulk carriers, the fleet average age will decrease further to 6.4 years. Based on earliest redelivery dates, we have secured time charter revenues of approximately $68 million, out of which $34 million is secured in 2012.” Mr. Bodouroglou concluded, “As a Company, we continue to execute on our strategy of conservative growth and cash preservation through the current drybulk market. All the steps we have taken aim at improving our position to further withstand the downturn.” First Quarter 2012 Financial Results Gross time charter revenue for the first quarter of 2012 was $13.2 million, compared to $29.0 million for the first quarter of 2011. The Company reported net income of $0.7 million, or $0.01 per basic and diluted share, for the first quarter of 2012, calculated on 59,055,573 weighted average number of basic and diluted shares outstanding for the period and reflecting the impact of the non-cash items discussed below. For the first quarter of 2011, the Company reported net income of $5.4 million, or $0.09 per basic and diluted share, calculated on 56,282,522 weighted average number of basic and diluted shares. Excluding all non-cash items described below, adjusted net income for the first quarter of 2012 was $1.1 million, or $0.02 per basic and diluted share, compared to adjusted net income of $6.8 million, or $0.12 per basic and diluted share, for the first quarter of 2011. EBITDA for the first quarter of 2012 was $6.6 million, compared to $17.7 million for the first quarter of 2011. EBITDA for the first quarter of 2012 was calculated by adding to net income of $0.7 million, net interest expense and depreciation that, in the aggregate, amounted to $5.9 million. Adjusted EBITDA, excluding all non-cash items described below, was $7.0 million for the first quarter of 2012, compared to $18.3 million for the first quarter of 2011. The Company operated an average of 10.0 vessels during the first quarter of 2012, earning a TCE rate of $13,490 per day, compared to an average of 13.0 vessels during the first quarter of 2011, earning an average TCE rate of $24,109 per day. Total adjusted operating expenses for the first quarter of 2012 equaled $6.2 million, or approximately $6,759 per day per vessel, including vessel operating expenses, management fees, general and administrative expenses and drydocking costs, but excluding $0.8 million of share-based compensation for the period. For the first quarter of 2011, total adjusted operating expenses were $8.9 million, or approximately $7,604 per day per vessel, including the same items as mentioned above, but excluding $1.6 million of share-based compensation. Currently, the Company owns approximately 21.1% 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, an affiliate, is accounted for under the equity method and is separately reflected on Company’s unaudited condensed consolidated balance sheet. For the first quarter of 2012, the Company recorded income of $1.0 million, representing its share of Box Ships’ net income for the period. In the first quarter of 2012, we received a cash amount of $1.0 million representing dividend distributions from Box Ships. First Quarter 2012 Non-cash Items The Company’s results for the three months ended March 31, 2012 included the following non-cash items: • An unrealized gain from interest rate swaps of $0.4 million. • Non-cash expenses of $0.8 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 the Company’s executive officers, directors and employees. In total, these non-cash items decreased net income by $0.4 million, or $0.01 per basic and diluted share, for the three months ended March 31, 2012. Cash Flows For the three months ended March 31, 2012, the Company generated net cash from operating activities of $3.9 million, compared to $12.6 million for the three months ended March 31, 2011. For the three months ended March 31, 2012, net cash used in investing activities was $0.4 million and net cash used in financing activities was $5.4 million. For the three months ended March 31, 2011, net cash used in investing activities was $5.5 million and net cash from financing activities was $15,190. Financing Update As previously reported, on April 26, 2012, the Company entered into a supplemental agreement and agreed to amended terms with one of our lenders. In accordance with the terms of the respective supplemental agreement, the Company prepaid an amount of $9.9 million on May 9, 2012. The continuing market downturn, which has been more severe than anticipated, has further depressed vessel prices and has impacted our re-chartering rates. As of March 31, 2012, we are not in compliance with the leverage ratio covenant contained in one of our loan agreements and the security cover ratio contained in four of our loan agreements. As a result, the Company may be required either to prepay indebtedness, provide additional collateral in the form of cash or other property or request for waivers and amendments to the respective terms of the facilities. The Company is or will enter into discussions with its lenders in order to address the issue in a mutually beneficial way. Detailed report at: www.paragonship.com About Paragon Shipping Inc. Paragon Shipping is a Marshall Islands-based international shipping company with executive offices in Athens, Greece, specializing in the transportation of drybulk cargoes. The Company’s current fleet consists of twelve drybulk vessels with a total carrying capacity of 779,270 dwt. In addition, the Company’s current newbuilding program consists of two Handysize drybulk carriers that are scheduled to be delivered in 2012 and two 4,800 TEU Containerships that are scheduled to be delivered in 2013. Paragon Shipping has granted Box Ships Inc., an affiliated company, the option to acquire its two Containerships under construction. For more information, visit: www.paragonship.com (the information contained on the Company’s website does not constitute part of this press release). Paragon Shipping Inc. press release |
Paragon Shipping Inc. Reports First Quarter 2012 Results
