Euroseas Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2017

Maroussi, Athens, Greece - August 9, 2017

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 three and six month period ended June 30, 2017.

Second Quarter 2017 Highlights:

Total net revenues of $10.0 million. Net loss of $1.0 million; net loss attributable to common shareholders (after a $0.4 million of dividend on Series B Preferred Shares) of $1.5 million or $0.13 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 remained unchanged, compared to net loss attributable to common shareholders, at $0.13 per share.

Adjusted EBITDA1 was $2.0 million.

An average of 13.1 vessels were owned and operated during the second quarter of 2017 earning an average time charter equivalent rate of $8,191 per day.

The Company declared its fourteenth dividend of $0.4 million on its Series B Preferred Shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.

First Quarter 2017 Highlights:

Total net revenues of $18.3 million. Net loss of $3.2 million; net loss attributable to common shareholders (after a $0.9 million of dividend on Series B Preferred Shares) of $4.1 million or $0.37 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders1 for the period was $0.42.

Adjusted EBITDA1 was $2.2 million

An average of 13.3 vessels were owned and operated during the first half of 2017 earning an average time charter equivalent rate of $7,654 per day.

(1) Adjusted EBITDA, Adjusted net loss and Adjusted loss per share are not recognized measurements under 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 U.S. GAAP.

Aristides Pittas, Chairman and CEO of Euroseas commented: "During the second quarter of 2017, both the drybulk and containership markets continued their recovery. Although charter rates peaked in early May and have softened since, they remain at levels noticeably higher than their respective periods of last year. Expectations for continued economic growth across many developed and developing countries and low levels of orderbook for both sectors support our guarded optimism that charter rates will further improve in the latter part of the year and in 2018. Thus, we consider the current charter rate levels appropriate for short and selected medium term charters, a strategy that affords us the flexibility to take advantage of any improvement in charter rates.

"At the same time, we are trying to exploit any opportunities to acquire new vessels in accretive transactions like our recent acquisition of M/V EM Astoria. We continue to believe that a company like Euroseas with access to the public markets and a cost-effective operating structure provides an ideal consolidation platform for drybulk and containership vessels and we are exploring such opportunities."

Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the second quarter of 2017 reflect the improving levels of the containership and drybulk markets compared to the same period of 2016.

"Adjusted EBITDA during the second quarter of 2017 was $2.0 million versus $(0.9) million in the second quarter of last year. During the second quarter of 2017, we repaid $1.5 million of debt earlier than scheduled and as a result one of our vessels, M/V Joanna, is unencumbered. As of June 30, 2017, our outstanding debt (excluding the unamortized loan fees) was $62.9 million versus restricted and unrestricted cash of $13.7 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $11.4 million (excluding the unamortized loan fees).

"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $5,984 per vessel per day during the second quarter of 2017 as compared to $6,065 per vessel per day for the same quarter of last year, and $5,835 per vessel per day for the first half of 2017 as compared to $6,097 per vessel per day for the same period of 2016, reflecting a 1.3% and 4.3% decline, respectively. As always, we want to emphasize that cost control remains a key component of our strategy."

Second Quarter 2017 Results:
For the second quarter of 2017, the Company reported total net revenues of $10.0 million representing a 36.4% increase over total net revenues of $7.3 million during the second quarter of 2016. The Company reported net loss for the period of $1.0 million and a net loss attributable to common shareholders of $1.5 million, as compared to a net loss of $19.2 million and a net loss attributable to common shareholders of $19.6 million, respectively, for the same period of 2016. The results for the second quarter of 2016 include a $0.01 million gain on sale of a vessel, a $1.4 million loss on termination of new building contract and a $14.0 million impairment charge on investment in joint venture none of which were incurred in the second quarter of 2017. Drydocking expenses amounted to $0.05 million during the second quarter of the year 2017 as a vessel underwent an in-water survey compared to one vessel that underwent drydocking during the second quarter of 2016 for a total amount of $1.2 million. Depreciation expenses for the second quarter of 2017 remained unchanged at $2.2 million compared to the same period of 2016.

Interest and other financing costs for the second quarter of 2017 amounted to $0.86 million compared to $0.54 million for the same period of 2016. Interest during the second quarter of 2017 was higher due to higher debt during the period as compared to the same period of last year during which interest was also lower due to the recognition of imputed interest for the vessels then under construction. In the second quarter of 2017, there was no equity loss and investment in joint venture as compared to equity loss of $0.57 million and impairment of investment in joint venture of $14.0 million for the three months ended June 30, 2016, as in June 2016, the Company concluded that its equity investment in Euromar and the invested portion of its investment in preferred units of Euromar were totally impaired and hence the Company also ceased recognising income on the preferred units.

On average, 13.1 vessels were owned and operated during the second quarter of 2017 earning an average time charter equivalent rate of $8,191 per day compared to 11.4 vessels in the same period of 2016 earning on average $7,213 per day.

Adjusted EBITDA for the second quarter of 2017 was $2.0 million compared to $(0.9) million achieved during the second quarter of 2016. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share attributable to common shareholders for the second quarter of 2017 was $0.13 calculated on 11,061,612 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $2.42 for the second quarter of 2016, calculated on 8,104,860 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the quarter of the unrealized loss on derivatives and the realized gain / loss on derivatives, the loss on termination of a newbuilding contract and the impairment of investment in joint venture, the adjusted net loss per share attributable to common shareholders for the quarter ended June 30, 2017 would have remained unchanged at $0.13 per share basic and diluted compared to adjusted net loss of $0.51 per share basic and diluted for the quarter ended June 30, 2016. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Half 2017 Results:
For the first half of 2017, the Company reported total net revenues of $18.3 million representing a 31.8% increase over total net revenues of $13.9 million during the first half of 2016, as a result of the increased average number of vessels and the increase in the average time charter equivalent rate our vessels earned. The Company reported a net loss for the period of $3.2 million and a net loss attributable to common shareholders of $4.1 million, as compared to net loss of $22.0 million and $22.9 million respectively, for the first half of 2016. The results for the first half of 2017 include a $0.5 million gain on sale of a vessel, as compared to a $0.2 million unrealized loss on derivatives, a $0.1 million realized loss on derivatives, a $0.01 million gain on sale of a vessel, a $1.4 million loss on termination of a new building contract and a $14.0 million impairment charge on investment in joint venture for the same period of 2016. Depreciation expenses for the first half of 2017 were $4.3 million compared to $4.4 million during the same period of 2016.

Interest and other financing costs for the first half of 2017 amounted to $1.63 million compared to $0.92 million for the same period of 2016. This increase is due to the increased amount of debt in the current period compared to the same period of 2016 and the recognition of imputed interest in the first half of 2016 for the vessels then under construction that reduced the interest for the period.

On average, 13.3 vessels were owned and operated during the first half of 2017 earning an average time charter equivalent rate of $7,654 per day compared to 11.5 vessels in the same period of 2016 earning on average $6,702 per day.

Adjusted EBITDA for the first half of 2017 was $2.2 million compared to $(1.0) million achieved during the first half of 2016. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share attributable to common shareholders for the first half of 2017 was $0.37 , calculated on 11,030,754 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $2.82 for the first half of 2016, calculated on 8,104,860 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the first half of the year of the unrealized loss on derivatives, realized gain/loss on derivatives, loss on termination of newbuilding contract, impairment of investment in joint venture and the gain on sale of vessel, the adjusted net loss per share attributable to common shareholders for the six-month period ended June 30, 2017 would have been $0.42 compared to loss of $0.89 per share basic and diluted for the same period in 2016. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Full report

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 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA.

Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc., which are 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 14 vessels, including 3 Panamax drybulk carriers, 1 Handymax drybulk carrier, 1 Kamsarmax drybulk carrier, 1 Ultramax drybulk carrier and 8 Feeder containerships. Euroseas 6 drybulk carriers have a total cargo capacity of 417,753 dwt and its 8 containerships have a cargo capacity of 14,313 teu. The Company has also signed a contract for the construction of one extra Kamsarmax (82,000 dwt) fuel efficient drybulk carrier. Including the new-building vessel, the total cargo capacity of the Company's drybulk vessels will be 499,753 dwt.

Euroseas Ltd. Press Release