ATHENS, Greece, Aug. 06, 2020 (GLOBE NEWSWIRE) — EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three and six month periods ended June 30, 2020. Second Quarter 2020 Highlights:Total net revenues of $4.0 million. Net loss of $3.8 million; net loss attributable to common shareholders (after a $0.4 million dividend on Series B Preferred Shares) of $4.2 million or $1.86 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $3.9 million or $1.73 loss per share basic and diluted.Adjusted EBITDA1 was $(1.3) million.An average of 7.0 vessels were owned and operated during the second quarter of 2020 earning an average time charter equivalent rate of $7,297 per day.The Company declared a dividend of $0.4 million on its Series B Preferred Shares. The dividend will be paid in-kind by issuing additional Series B Preferred Shares.First Half 2020 Highlights:Total net revenues of $9.1 million. Net loss of $6.1 million; net loss attributable to common shareholders (after a $0.7 million dividend on Series B Preferred Shares) of $6.9 million or $3.03 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $6.2 million or $2.76 loss per share basic and diluted.Adjusted EBITDA1 was $(1.0) million.An average of 7.0 vessels were owned and operated during the first half of 2020 earning an average time charter equivalent rate of $7,390 per day.Aristides Pittas, Chairman and CEO of EuroDry commented: “During the second quarter of 2020, the drybulk market experienced the effects of the COVID-19 pandemic and lockdown of the main economies resulting in decreased cargo volumes transported and significant declines in charter rates. These developments put pressure on our cash flow, which combined with the offhire time of one of our vessels to undergo its fourth special survey led to us posting our worst quarterly results since the Company’s spin-off. During the second half of June, the market started recovering – in line with the reopening of the major economies- with rates returning to the levels seen at the beginning of the year; therefore, we expect a reversal of fortunes in the third quarter if such trends continue.“We believe, however, that there is significant uncertainty remaining about COVID-19 related developments in the world economies and the continuing trade tensions between U.S. and China which affect the drybulk markets. In addition, port lockdowns have affected our ability to change crew on board our vessels. We have taken relevant measures to ensure our crew members’ and shore employees’ health and safety, despite the ongoing hurdles and travel restrictions imposed by lockdowns around the world. Thus, our strategy is to ensure that we mitigate and address the risks of COVID-19 and have sufficient liquidity to deal with the possibility of renewed market weakness. In the midst of these unprecedented developments, we remain optimistic about the post-pandemic and medium term prospects of drybulk shipping as the fleet orderbook is the lowest in more than 20 years which should result in limited fleet growth when the above-said pandemic-driven uncertainty recedes.“As always, we continue to seek and evaluate opportunities and options to renew or expand our fleet exploring also merger possibilities with other fleets in accretive transactions.”Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the second quarter of 2020 decreased compared to the second quarter of 2019 as a result of the time charter equivalent rates our vessels earned during the quarter which were lower by 32.0% compared to the average time charter equivalent rates our vessels earned in the second quarter of 2019. The significantly lower rates compared to the same period of last year are a result of the dramatic effects on the global economy and seaborne trade of the COVID-19 pandemic. As part of our efforts to ensure sufficient liquidity, we have agreed or are in the process of discussing with some of our lenders to defer a number of loan repayments due in 2020 to later periods or to the end of the respective facilities. At the same time, we have agreed with our preferred shareholders to introduce the option from April 1, 2020 to January 29, 2021 for the Company to pay the preferred dividend in-kind by issuing new preferred shares. If paid in-kind, the preferred dividend would be at an annual rate of 10.25%, 1% higher than if it is paid in cash.Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,131 per vessel per day during the second quarter of 2020 as compared to $5,948 per vessel per day for the same quarter of last year, and $6,093 per vessel per day for the first half of 2020 as compared to $5,898 per vessel per day for the same period of 2019. This increase is mainly due to increased supply of stores and spare parts for our vessels in 2020 compared to 2019. Adjusted EBITDA during the second quarter of 2020 was $(1.3) million versus $1.8 million in the second quarter of last year. As of June 30, 2020, our outstanding debt (excluding the unamortized loan fees) was $53.4 million, while unrestricted and restricted cash was $4.4 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $5.4 million (excluding the unamortized loan fees) and all our loan covenants are satisfied.”_________________________1Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s financial results presented in accordance with 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 GAAP.Second Quarter 2020 Results:Interest and other financing costs for the second quarter of 2020 amounted to $0.6 million compared to $0.9 million for the same period of 2019. Interest during the second quarter of 2020 was lower due to the lower average outstanding debt and the decreased Libor rates of our loans during the period as compared to the same period of last year. For the three months ended June 30, 2020, the Company recognized a $0.2 million loss on three interest rate swaps and a $0.1 million unrealized loss on FFA contracts entered into during the second quarter of 2020 as compared to a loss on derivatives of $0.6 million for the same period of 2019, comprising of a $0.4 million loss on FFA contracts and a $0.2 million loss on one interest rate swap.On average, 7.0 vessels were owned and operated during the second quarter of 2020 earning an average time charter equivalent rate of $7,297 per day compared to 7.0 vessels in the same period of 2019 earning on average $10,724 per day. Adjusted EBITDA for the second quarter of 2020 was $(1.3) million compared to $1.8 million achieved during the second quarter of 2019.Basic and diluted loss per share attributable to common shareholders for the second quarter of 2020 was $1.86 calculated on 2,267,375 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $1.14 for the second quarter of 2019, calculated on 2,244,803 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, the adjusted loss attributable to common shareholders for the quarter ended June 30, 2020 would have been $1.73 per share basic and diluted compared to an adjusted loss of $0.65 per share basic and diluted for the quarter ended June 30, 2019. Usually, security analysts do not include the above item in their published estimates of earnings per share.
First Half 2020 Results:Interest and other financing costs for the first half of 2020 amounted to $1.2 million compared to $1.9 million for the same period of 2019. This decrease is due to the lower average outstanding debt and the decreased Libor rates of our loans in the current period compared to the same period of 2019. For the six months ended June 30, 2020, the Company recognized a $0.5 million loss on three interest rate swaps and a $0.1 million unrealized loss on FFA contracts entered into during the second quarter of 2020 as compared to a gain on derivatives of $0.9 million for the same period of 2019, comprising of a $1.2 million gain on FFA contracts and a $0.3 million loss on one interest rate swap. Adjusted EBITDA for the first half of 2020 was $(1.0) million compared to $4.3 million achieved during the first half of 2019.Basic and diluted loss per share attributable to common shareholders for the first half of 2020 was $3.03, calculated on 2,267,375 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $0.96 for the first half of 2019, calculated on 2,244,803 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, the adjusted loss attributable to common shareholders for the six-month period ended June 30, 2020 would have been $2.76 per share compared to a loss of $0.87 per share basic and diluted for the same period in 2019. As previously mentioned, usually, security analysts do not include the above item in their published estimates of earnings per share.Fleet Profile:The EuroDry Ltd. fleet profile is as follows:
Summary Fleet Data:(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of the Company’s fleet during the period divided by the number of calendar days in that period.(2) Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was owned by us including off-hire days associated with major repairs, drydockings or special or intermediate surveys or days of vessels in lay-up. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.(3) The scheduled off-hire days including vessels laid-up are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up.(4) Available days. We define available days as the total number of Calendar days in a period net of scheduled off-hire days incl. laid up. We use available days to measure the number of days in a period during which vessels were available to generate revenues.(5) Commercial off-hire days. We define commercial off-hire days as days a vessel is idle without employment.(6) Operational off-hire days. We define operational off-hire days as days associated with unscheduled repairs or other off-hire time related to the operation of the vessels.(7) Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of commercial and operational off-hire days. We use voyage days to measure the number of days in a period during which vessels actually generate revenues or are sailing for repositioning purposes.(8) Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our available days during that period. We use fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as unscheduled repairs or days waiting to find employment.(9) Fleet utilization, commercial. We calculate commercial fleet utilization by dividing our available days net of commercial off-hire days during a period by our available days during that period.(10) Fleet utilization, operational. We calculate operational fleet utilization by dividing our available days net of operational off-hire days during a period by our available days during that period.(11) Time charter equivalent rate, or TCE, is a measure of the average daily net revenue performance of our vessels. Our method of calculating TCE is determined by dividing time charter revenue and voyage charter revenue net of voyage expenses by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, or are related to repositioning the vessel for the next charter. TCE is a 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, pool agreements and bareboat charters) under which the vessels may be employed between the periods. Our definition of TCE may not be comparable to that used by other companies in the shipping industry.(12) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and management fees are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. Drydocking expenses are reported separately.(13) Daily general and administrative expense is calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.(14) Total vessel operating expenses, or TVOE, is a measure of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses, management fees and general and administrative expenses; drydocking expenses are not included. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.(15) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method divided by the fleet calendar days for the relevant period. Drydocking expenses could vary substantially from period to period depending on how many vessels underwent drydocking during the period. The Company expenses drydocking expenses as incurred.Conference Call and Webcast:
Today, August 6, 2020 at 10:00 a.m. Eastern Time, the Company’s management will host a conference call and webcast to discuss the results.
EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars – except number of shares)EuroDry Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
EuroDry Ltd.
Reconciliation of Adjusted EBITDA to
Net loss
(All amounts expressed in U.S. Dollars)Adjusted EBITDA Reconciliation:
EuroDry Ltd. considers Adjusted EBITDA to represent net loss before interest, income taxes, depreciation and unrealized (gain) / loss on Forward Freight Agreement derivatives (“FFAs”) and loss on interest rate swap derivatives. Adjusted EBITDA does not represent and should not be considered as an alternative to net loss, as determined by United States generally accepted accounting principles, or GAAP. Adjusted EBITDA is included herein because it is a basis upon which the Company assesses its financial performance because the Company believes that this non-GAAP financial measure assists our management and investors by increasing the comparability of our performance from period to period by excluding the potentially disparate effects between periods of, financial costs, unrealized (gain)/loss on FFAs, loss on interest rate swap derivatives, and depreciation. The Company’s definition of Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries. EuroDry Ltd.
Reconciliation of Net loss to Adjusted net loss
(All amounts expressed in U.S. Dollars – except share data and number of shares)Adjusted net loss and Adjusted loss per share Reconciliation:EuroDry Ltd. considers Adjusted net loss to represent net loss before unrealized loss on derivatives, which includes FFAs and interest rate swaps. Adjusted net loss and Adjusted loss per share is included herein because we believe it assists our management and investors by increasing the comparability of the Company’s fundamental performance from period to period by excluding the potentially disparate effects between periods of unrealized loss on derivatives, which may significantly affect results of operations between periods. Adjusted net loss and Adjusted loss per share do not represent and should not be considered as an alternative to net loss or loss per share, as determined by GAAP. The Company’s definition of Adjusted net loss and Adjusted loss per share may not be the same as that used by other companies in the shipping or other industries.Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Visit our website www.eurodry.gr
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