Paragon Shipping Inc. Reports Second Quarter and Six Months Ended June 30, 2011 Results
(firmenpresse) - ATHENS, GREECE -- (Marketwire) -- 08/08/11 -- Paragon Shipping Inc. (NYSE: PRGN), or the Company, a global shipping transportation company specializing in drybulk cargoes and containers, announced today its results for the second quarter and six months ended June 30, 2011.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, "For the second quarter of 2011, Paragon reported Adjusted EBITDA of $15.4 million, and Adjusted Net Income of $5.2 million, or $0.09 per share, which excludes a non-cash non-recurring loss of $19.8 million, or $0.34 per share, relating to the share consideration received from Box Ships for the vessels sold to it, which was a result of the consideration received by Paragon being partly based on Box Ship's share price on the delivery date of those vessels, and the write off of a portion of the book value of our oldest vessel, the M/V Crystal Seas, for which we are reviewing several options now that her time charter has expired, and certain other non-cash items."
Mr. Bodouroglou continued, "Since the beginning of the year, the drybulk charter market has continued to decline and the orderbook is still at a high level. Subsequent to the second quarter, we have taken certain steps that we believe will position us well to take advantage of the opportunities that we expect to arise during these weak markets. Specifically, we no longer have exposure in the Kamsarmax segment of the market, we have agreed to extend one of our credit facilities that was maturing in 2012 by five years, we have agreed to amend the repayment profile of another credit facility to increase our cash flow. We have also fixed three vessels on time-charters, which improved our fixed rate time charter coverage to 95% of our fleet capacity in 2011, 57% in 2012 and 35% in 2013."
Mr. Bodouroglou concluded, "We remain cautiously optimistic on the medium-term prospects of the drybulk market, and have the resources to take advantage of opportunities that may increase long term shareholder value."
In April 2011, the Company's wholly-owned subsidiary, Box Ships Inc., or Box Ships, successfully completed its initial public offering ("IPO") of 11,000,000 shares of its common stock at $12.00 per share. Upon the closing of the IPO, the Company surrendered its 100 shares of Box Ships' common stock and entered into the sale of Box Voyager, Box Trader and CMA CGM Kingfish with Box Ships in consideration for an aggregate of 3,437,500 shares of Box Ships' common stock, valued at the date of delivery of vessels to Box Ships, and $105.0 million in cash. Following the delivery of the vessels to Box Ships, the Company owns approximately 21.3% of the outstanding common stock of Box Ships. The investment in Box Ships is accounted for under the equity method and is separately reflected on Company's condensed balance sheet.
For the second quarter of 2011, the Company recorded $0.5 million income, representing its share of Box Ships net income for the period.
Time charter revenue for the second quarter of 2011 was $25.1 million, compared to $29.5 million for the second quarter of 2010. The Company reported net loss of $16.8 million, or $0.28 per basic and diluted share for the second quarter of 2011, calculated on 58,254,929 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 second quarter of 2010, the Company reported net income of $7.3 million, or $0.14 per basic and diluted share, calculated on 49,481,540 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the second quarter of 2011 was $5.2 million, or $0.09 per basic and diluted share, compared to adjusted net income of $6.7 million, or $0.13 per basic and diluted share for the second quarter of 2010. Please refer to the table at the back of this release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share.
EBITDA for the second quarter of 2011 was negative $5.9 million, compared to positive $17.5 million for the second quarter of 2010. EBITDA for the second quarter of 2011 was calculated by adding to net loss of $16.8 million, net interest expense and depreciation that, in the aggregate, amounted to $10.9 million. Adjusted EBITDA, excluding all non-cash items described below, was $15.4 million for the second quarter of 2011, compared to $16.2 million for the second quarter of 2010. Please see the table at the back of this release for a reconciliation of non-GAAP EBITDA and non-GAAP Adjusted EBITDA to GAAP net income.
The Company operated an average of 11.8 vessels during the second quarter of 2011, earning an average time charter equivalent rate, or TCE rate, of $22,466 per day, compared to an average of 11.0 vessels during the second quarter of 2010, earning an average TCE rate of $29,054 per day. Please see the table at the back of this release for a reconciliation of non-GAAP TCE rates to GAAP time charter revenue.
Total adjusted operating expenses for the second quarter of 2011 equaled $8.4 million, or approximately $7,784 per day, including vessel operating expenses, management fees, general and administrative expenses and drydocking costs, but excluding $1.3 million of share-based compensation for the period. For the second quarter of 2010, total adjusted operating expenses were $7.6 million, or approximately $7,618 per day, including the same items as mentioned above, but excluding $2.4 million of share-based compensation.
The Company's results for the three months ended June 30, 2011 included the following non-cash items:
Depreciation expense of $0.7 million, or $0.01 per basic and diluted share, associated with below market time charters attached to vessels acquired, which increases depreciation expense (amortized over the remaining useful life of the vessel).
Impairment loss of $5.0 million, or $0.09 per basic and diluted share, related to the M/V Crystal Seas.
An unrealized loss from interest rate swaps of $0.2 million, or $0.01 per basic and diluted share.
Loss on sale of vessels of $14.8 million, or $0.25 per basic and diluted share, related to the sale of Box Voyager, Box Trader and CMA CGM Kingfish to Box Ships Inc.
Non-cash expenses of $1.3 million, or $0.02 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 and related to share-based compensation to the management company.
In total, these non-cash items decreased net income by $22.0 million, or $0.37 per basic and diluted share, for the three months ended June 30, 2011.
Pursuant to its time chartering strategy, the Company mainly employs vessels under fixed rate time charters for periods ranging from one to five years. Assuming all charter counter parties fully perform under the terms of the charters and that all options are exercised and including the drybulk newbuilding vessels, the Company has secured under such contracts 95%, 57% and 35% of its fleet capacity in 2011, 2012 and 2013, respectively.
For the six months ended June 30, 2011, the Company generated net cash from operating activities of $24.5 million, compared to $28.7 million for the six months ended June 30, 2010. For the six months ended June 30, 2011, net cash from investing activities was $16.4 million and net cash used in financing activities was $55.5 million. For the six months ended June 30, 2010, net cash used in investing activities was $38.4 million and net cash used in financing activities was $50.6 million.
On August 4, 2011, the Company agreed to convert its final Kamsarmax newbuilding contract into one of its already existing 4,800 TEU Containership newbuildings, which is expected to be delivered in the fourth quarter of 2013.
Time charter revenue for the six months ended June 30, 2011, was $54.1 million, compared to $60.9 million for the six months ended June 30, 2010. The Company reported net loss of $11.4 million, or $0.19 per basic and diluted share, for the six months ended June 30, 2011, calculated on 57,276,048 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 six months ended June 30, 2010, the Company reported net income of $16.5 million, or $0.32 per basic and diluted share, calculated on 49,481,532 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the six months ended June 30, 2011, was $12.0 million, or $0.20 per basic and diluted share. Adjusted net income for the six months ended June 30, 2010 was $14.8 million, or $0.29 per basic and diluted share. Please refer to the table at the back of this release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share.
EBITDA was $10.7 million for the six months ended June 30, 2011, compared to $37.1 million for the six months ended June 30, 2010. This was calculated by adding to net loss of $11.4 million for the six months ended June 30, 2011, net interest expense and depreciation that in the aggregate amounted to $22.0 million for the six months ended June 30, 2011. Adjusted EBITDA, excluding all non-cash items described below, was $32.6 million for the six months ended June 30, 2011, compared to $34.0 million for the six months ended June 30, 2010. Please see the table at the back of this release for a reconciliation of non-GAAP EBITDA and non-GAAP Adjusted EBITDA to GAAP net income.
The Company operated 12.4 vessels during the six months ended June 30, 2011, earning an average TCE rate of $23,320 per day, compared to an average of 11.1 vessels during the six months ended June 30, 2010, earning an average TCE rate of $29,475 per day. Please see the table at the back of this release for a reconciliation of non-GAAP TCE rates to GAAP time charter revenue.
Total adjusted operating expenses for the six months ended June 30, 2011, were $17.3 million, or approximately $7,690 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $2.7 million of share-based compensation for the period. For the six months ended June 30, 2010, total adjusted operating expenses were $14.5 million, or approximately $7,251 per day, including vessel operating expenses, management fees and general and administrative expenses and drydocking costs, but excluding $4.8 million of share-based compensation.
The Company's results for the six months ended June 30, 2011, included the following non-cash items:
Depreciation expense of $1.4 million, or $0.02 per basic and diluted share, associated with below market time charters attached to vessels acquired, which increases depreciation expense (amortized over the remaining useful life of the vessel).
Impairment loss of $5.0 million, or $0.09 per basic and diluted share, related to the M/V Crystal Seas.
An unrealized gain from interest rate swaps of $0.8 million, or $0.01 per basic and diluted share, respectively.
Loss on sale of vessels of $14.8 million, or $0.26 per basic and diluted share, related to the sale of Box Voyager, Box Trader and CMA CGM Kingfish to Box Ships Inc.
Non-cash expenses of $2.9 million, or $0.05 per basic and diluted share, relating to the amortization of the compensation cost recognized for restricted common shares issued to executive officers, directors and employees and related to share based compensation to the management company.
In the aggregate, these non-cash items decreased net income by $23.3 million, which represents a $0.39 decrease in earnings per basic and diluted share, for the six months ended June 30, 2011.
The Company's management will host a conference call to discuss its second quarter and six months ended June 30, 2011 results on August 9, 2011 at 10:00 am Eastern Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +44 (0) 1452 542 301 (from outside the US) or 0080 044 131 378 (from Greece). Please quote "Paragon."
A replay of the conference call will be available until August 16, 2011. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is +44 (0) 1452 550 000 and the access code required for the replay is: 55939564#.
There will also be a simultaneous live webcast over the Internet, through the Company's website (). Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation of drybulk cargoes and containers. The Company's current fleet consists of eleven drybulk vessels with a total carrying capacity of 747,994 dwt.
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include 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, drydocking 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. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
- Tables Follow -
The following tables represent our drybulk fleet and the drybulk newbuilding vessels that we have agreed to acquire as of August 8, 2011.
Drybulk Newbuildings that we have agreed to acquire
The following table represents the containership newbuilding vessels that we have agreed to acquire as of August 8, 2011.
Containership Newbuildings that we have agreed to acquire
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Datum: 08.08.2011 - 14:05 Uhr
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