Euroseas Ltd. · NASDAQ:ESEA
Euroseas — Oppenheimer 4th Annual Industrials Conference (November 2009)
29 slides from Euroseas's conference presentation, Nov 17, 2009
Slide 1: Presentation to Oppenheimer 4th Annual Industrials Conference
Presentation to Oppenheimer pp 4th Annual Industrials Conference November 17, 2009
Slide 2: Forward-Looking Statements
Forward-Looking g Statements Statements in this presentation may be "forward-looking statements" within the meaning of federal securities laws. The matters discussed herein that are forward forward-looking looking statements are based on current management expectations that involve risks and uncerta
Slide 3: Introduction & Milestones
Introduction & Milestones » Euroseas is a provider of worldwide dry cargo transportation services Owner of 17 ships – 6 Drybulk carriers – transporting iron ore, coal and grains and minor bulks – 11 Container and multipurpose ships – transporting dry and refrigerated cargoes » Corporate Profile • Fo
Slide 4: Acquisitions 2005-2009
Acquisitions q 2005-2009 Euroseas avoided investing at the peak of the market except for Ioanna P 70 Ioanna P 60 Dry Bulk (Panamax) Containership (1700 teu) 50 million $, 15--yr old vessels 40 Gregos 30 Artemis Aristides NP Maersk Noumea Tiger Bridge Clan Gladiator 20 Pantelis Despina/Jonathan Xinga
Slide 5: Current Fleet
Current Fleet Name Type DWT TEU Built Year Acq'd Pantelis Panamax 74,020 - 2000 2009 Eleni P Panamax 72 119 72,119 - 1988 2009 Irini Panamax 69,734 - 1993 2002 Aristides NP Panamax 69,268 - 1997 2006 Monica P Handymax 46,667 - 1998 2009 Gregos Handysize 38,691 - 1984 2007 Maersk Noumea Intermediate
Slide 6: 2009 Third Quarter & First Nine Months Overview
2009 Third Quarter & First Nine Months Overview • Financial Highlights - 2009: Third Quarter First Nine Months Net Revenues $17.2 m $47.3 m Net Income $2.2 m $0.07 / $0.7 m $0.02 / share(2) share(2) Adj. Net Income / ($0.3) m ($0.01) / $2.1 m $0.07 / (Loss)(1) share(2) share(2) Adj. EBITDA(1) $5.0 m
Slide 7: A Volatile & Challenging Market Environment
A Volatile & Challenging g g Market Environment 1-Year TC Rates Market Environment 90 000 90,000 • While dry bulk rates rebounded after the Panam ax 72-75,000 dw t 80,000 October 2008 crash to profitable levels by Containe rs hip 1700 te u any historical standards… 70,000 • …Containership Containers
Slide 8: Euroseas Strategy - Investment
Euroseas Strategy gy - Investment Selectively acquire & sell vessels 10-yr old Price Historical Range • Used the opportunity of dramatically lower 90 dry bulk prices earlier this year to buy three 80 M ax, 19 9 9 - 2 0 0 9 vessels (’97, ’98 and ’00 built) and sell two A ver ag e, 19 9 9 - 2 0 0 9 ’8
Slide 9: Dividend Declaration
Dividend Declaration $0 5 $0.5 25% • Declared the 17th consecutive dividend of $0.4 20% $0.05 per share for the third quarter nd aan n u alized yiel d q u arterly d ivid en • Annualized yield of about 5% (1) $0.3 15% • One of the very few companies still paying dividend $0.2 10% • Dividend reduction
Slide 10: Euroseas Strategy – Costs & Funding
Euroseas Strategy gy – Costs & Funding g • Focus on keeping operating costs low • One of the lowest cost structure amongst public companies • total operating costs including G&A in the third quarter: $4,755 / vessel / day (it would be about $600-650 more if 3 vessels currently laid-up were operating
Slide 11: Fleet Management & Operational Performance
Fleet Management g & Operational p Performance Daily costs per vessel » Management is performed by Eurobulk Ltd., an affiliate 9,000 8,000 • Top management – 100+ years of industry 7,000 ((*)) shipping hi i experience i 6,000 $ / day • 4th generation of Pittas’ family managing 5,000 secondhand dry-c
Slide 12: Euroseas Strategy - Employment
Euroseas Strategy gy - Employment p y • Balance employment between period and spot • Try to secure enough contracted employment to cover cash costs over next 12 months whenever possible and commercially sound • Employ balance opportunistically depending on market trends and views • Dry Bulkers • Mos
Slide 13: Vessels Employment Chart – Bulkers
Vessels Employment p y Chart – Bulkers 100% coverage in Nov-Dec 2009 / 80% in 2010 / 17% in 2011 PANTELIS P $25,200 $17,500 $17,500 ELENI P $15,350 Spot GREGOS / 150% FFA @ 7,000 / 80% FFA @ 7,450 Spot pool / 100% FFA @ MONICA P. Spot / 100% FFA @ 10,950 10,250 Spot pool / 100% FFA @ IRINI Spot / 10
Slide 14: Vessels Employment Chart – Containerships
Vessels Employment p y Chart – Containerships p 57% coverage in Nov-Dec 2009 / 29% in 2010 / 14% in 2011 ARTEMIS laid-up Container Ship Vessels DESPINA P laid-up Multi-purpose Vessel JONATHAN P laid-up MASTRO NICOS $3,850 $3,750 $5,900 MANOLIS P $15,800 $3850 $4000 Contex 1700 less 10% CAPTAIN COSTA
Slide 15: Market Overview
Market Overview
Slide 16: Panamax & 1700 teu Containership 10-yr Old Prices & 1-yr TC Rates
Panamax & 1700 teu Containership p 10-yr y Old Prices & 1-yr y TC Rates 1-Year TC Rates Secondhand Price, 10-Year Old Vessels 90,000 90 Panamax 72-75,000 dwt Panam ax 72-75,000 dw t 80,000 Containers hip 1700 teu 80 Containership 1700 teu 70,000 70 60,000 60 million USD 50,000 50 $ / day 40,000 40 3
Slide 17: World GDP & Shipping Demand Growth
World GDP & Shipping Demand Growth Real GDP (% p.a.) 2006 2007 2008 2009F 2010F 2011-13F USA 33 3.3 25 2.5 11 1.1 -2 7 (-2.7) -2.7 (-2 7) 3 4 (1.8) 1 5(1 4) 3.4 1.5(1.4) (1 8) Eurozone 3.0 2.7 0.8 -4.2 (-4.8) 0.3 (0.3) 1.7 (1.8) Japan 2.8 1.9 -0.7 -5.4 (-6.0) 1.7 (1.7) 2.7 (1.2) China 10.5 11.2 9.0
Slide 18: Drybulk Age Profile & Orderbook Delivery Schedule
Drybulk y Age g Profile & Orderbook Deliveryy Schedule Dry Bulk Age Profile Dry Bulk Orderbook (1) m dwt d t 30% m dwt d t 140.0 120 For delivery in 2010 22.8% 130.0 110 (vessels): 120.0 100 Cape 324 110.0 Panamax 276 50.0 90 13.5% 100.0 H’max H max 362 17 3% 17.3% 17.8% % 80 57 60 57.60 90.0 16.9%
Slide 19: Containership Age Profile & Orderbook Delivery Schedule
Containership p Age g Profile & Orderbook Deliveryy Schedule Containership Age Profile(1) Container Orderbook (1) m TEU m TEU 6.4 48.1 % 2.0 6.0 14.6% 13.0% 16.0% 5.6 9.8% 5.2 1.6 4.8 4.4 3.02 13 .8% 0.79 0.9 4.0 1.2 1.22 3.6 3.2 21.5% 0.6 2.8 1.466 15.8% 0.8 2.4 1 63 1.63 0 44 0.44 2.0 1.21 0.51 0.
Slide 20: Indicative Supply/Demand Balance Scenario
Indicative Supply/Demand pp y Balance Scenario Dry Bulk Container Orderbook - 65.2% (Oct-09) Orderbook - 40.5% (Oct-09) 2009H1 2009H2 2010 2011 2009 2010 2011 Trade Demand Growth, annualized(1) -4.0% -2.0% 6.0% 5.5% -9.1% 2.2% 10.0% Effect of congestion, piracy, productivity 1.5% 1.5% - - 0.5% - - D
Slide 21: Market Trends & Opportunities - Bulkers
Market Trends & Opportunities pp - Bulkers » Global economic recovery appears on schedule evidenced by IMF’s IMF s continuous upward revisions of expected growth » China drives demand helped by other factors like longer hauls, port congestion and piracy effects » Oversupply fears still a major conce
Slide 22: Market Trends & Opportunities - Containerships
Market Trends & Opportunities pp - Containerships p » Freight rates, charter rates and vessel prices at all time lows below operating cost levels » All container lines face severe problems, many relying on state bail-outs » Percentage g of fleet in layy upp ppeaked end March at around 12% • Has fall
Slide 23: Financial Overview
Financial Overview
Slide 24: Financial Highlights: 3rd Quarter and First Nine Months of 2008 and 2009
Financial Highlights: g g 3rd Quarter and First Nine Months of 2008 and 2009 Third Quarter First Nine Months as as (4) (4) (in million USD except per j adjusted change g j adjusted change g (3) (3) share amounts) 2008 2009 % 2008 2009 % Net Revenues $35.5 $17.2 -51.6% $102.7 $47.3 -53.9% Net Income
Slide 25: Fleet Data for 3rd Quarter and First Nine Months of 2008 and 2009
Fleet Data for 3rd Quarter and First Nine Months of 2008 and 2009 Fleet Statistics Third Quarter First Nine Months 2008 2009 2008 2009 (unaudited) (unaudited) (unaudited) (unaudited) Number of vessels 16.00 16.79 15.48 16.17 Utilization Rate (%) Overall(1 ) 98.0% 96.2% 98.7% 95.2% Commercial(1 ) 100
Slide 26: Rapid Debt Repayment
Rapid Debt Repayment Debt Repayment Schedule – As of 11/12/2009 Cash Flow Breakeven $30 » $11.8 m less debt repayments in 2009 • About $2,000 / day / vessel lower $25 $11.8m lower debt cash flow breakeven payments in 2009 $20 » Cash Flow Breakeven rough estimate for next 12 months: million $15 4.8 2
Slide 27: Balance Sheet & Other Data
Balance Sheet & Other Data » Cash @ September 30, 2009: $ 42.7m • Also restricted cash of about $10 m » D bt $79.1 Debt: $79 1 m as off September S t b 30, 30 2009 • Debt to Capitalization ratio about 24% » About $30 m equity to fund further growth • Double purchasing power when funds are coupled wi
Slide 28: Euroseas Contacts
Euroseas Contacts Euroseas Ltd. Aethrion Center 40, Ag. Konstantinou Street 151 24 Maroussi, Greece www.euroseas.gr euroseas@euroseas.gr Tel. +30-211-1804005 Fax.+30-211-1804097 or, Tasos Aslidis Nicolas Bornozis Chief Financial Officer Investor Relations Euroseas Ltd. Capital Link, Inc. 11 Canterbu
Slide 29: Appendix
Appendix pp Please refer to the Company’s Company s press release of November 16 16, 2009 for financial statements and reconciliation of Adjusted EBITDA and “Operating” EPS to Net Income and Cash Flow from Operations, as well as Reconciliation of Net Income to Adjusted Net Income Page 29
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