Euroseas Ltd. · NASDAQ:ESEA
Euroseas — Roth Capital Partners 2006 New York Conference
36 slides from Euroseas's conference presentation, Sep 6, 2006
Slide 1: Presentation At Roth Capital Partners 2006 New York Conference
(ESEAF.OB) Presentation At Roth Capital Partners 2006 New York Conference New York City, NY, September 6, 2006 1870 Today 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation may be "forward-looking statements" within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result
Slide 3: Agenda
Agenda § Introduction & Recent Events § Company Strategy § Industry background § Financials results and dividend history 3
Slide 4: Who is Euroseas Ltd.
Who is Euroseas Ltd. § A public company involved in ocean-going transportation - we transport: § Bulk raw materials including iron ore, coal, grain & others; and, § Containerized trade (container boxes) § Owner of 8 vessels, 4 dry bulkers, 3 containerships, 1 multipurpose § Financial Highlights: 1st
Slide 5: Financing History & Profile
Financing History & Profile § Completed a private placement in Aug. 2005 raising $21 million § Approximately 7 m shares @ $3 / share (incl. 25% 5-yr warrants @ $3.60) § A subsidiary merged with Cove Apparel Inc. (CVAP.OB) § Registered for resale shares sold in the private placement and shares of Cov
Slide 6: Fleet Development during 2006 H1
Fleet Development during 2006 H1 § Acquired: § M/V Tasman Trader, a 950 teu / 22,568 dwt multipurpose vessel built in 1990 (April 2006), and, § M/V Torm Tekla, a Panamax dry bulk carrier vessel of 69,268 dwt built in 1993 (September 2006) § Sold M/V “Pantelis P” and M/V “John P”, both handysize bulk
Slide 7: Current Fleet – September 2006
Current Fleet – September 2006 Vessel List Type Size Units Year Built Ariel Dry Bulk 33,712 dwt 1 977 Nikolaos P Dry Bulk 34,750 dwt 1 984 Torm Tekla Dry Bulk 69,268 dwt 1 993 Irini Dry Bulk 69,734 dwt 1 988 QuingDao Container 1,269 teu 1 990 Kuo Hsiung Container 1,269 teu 1 993 Artemis Container 2,
Slide 8: Agenda
Agenda § Introduction & Recent Events § Company Strategy § Industry background § Financials results and dividend history 8
Slide 9: Growth Strategy
Growth Strategy § Currently the 2nd smallest among public dry bulk companies § Immediate larger company twice as big § Limited liquidity § Company committed to increase size and liquidity § “Going public” was a strategic decision § Will grow by pursuing accretive acquisitions and by employing our ve
Slide 10: Our Investment and Employment Strategy
Our Investment and Employment Strategy § Maximize cash flow and earnings per dollar invested § Target mid-age vessels at time of purchase § Evaluate all projects on own merits plus effect on fleet § Employ our vessels in a mix of profitable time charters and the spot market § Enough contracts to cov
Slide 11: Our Execution Platform
Our Execution Platform § We expect the remaining of 2006 will present purchasing opportunities § Would allow us to grow our fleet based on existing capital resources & new funds § We continuously inspect and evaluate vessels listed for sale § Targeting vessels mainly 10 to 20 years old which we beli
Slide 12: Management Team
Management Team § Aristides J. Pittas, Chairman & CEO § 4th generation of maritime family, 20 years experience – 10 years running Eurobulk; naval architect & management studies in Newcastle (UK) & MIT § Tasos Aslidis, PhD, CFO § 17 yrs in shipping, formerly with shipping financial consultant, Marsof
Slide 13: Investment Strategy Rational
Investment Strategy Rational § Invest in middle age vessels, 10-20 years at time of purchase § A middle age vessel still has 10-15 years of remaining life § Investment Evaluation Example: Panamax Dry bulk vessels § 1st year total return / based on recent prices & rates and constant market conditions
Slide 14: Own Earnings Vs. Market Rates
Own Earnings Vs. Market Rates Our actual average rates for our 4 Handysize vessels compared against the 1-year TC rate for a 5-year old handysize vessel usd/day 25,000 Modern 28-30,000 avg. 2002-06q2 = 12,260 $/day Euroseas Handysize avg. 2002-06q2 = 11,575 $/day 20,000 15,000 10,000 5,000 0 02q1 02
Slide 15: Average Daily Operating Costs – 2006Q1
Average Daily Operating Costs – 2006Q1 Average Daily Total Operating Costs usd / day 7,000 Running Costs Mgt Fee and G&A Expenses 6,000 5,000 4,000 3,000 2,000 1,000 0 DSX DRYS EGLE EXM GENCO QMAR ESEAS Data based on published accounts for 2006 Q1 15
Slide 16: Charter Coverage
Charter Coverage 1000 100% 900 Available Days 90% Average % Days On Contract for Year 2006-95% Fixed Days 800 80% % Days Fixed 700 2007-50% 70% Available Days 600 60% 500 50% 2008-34% 400 40% 300 30% 200 20% 100 10% 0 0% 06.1 06.2 06.3 06.4 07.1 07.2 07.3 07.4 08.1 08.2 08.3 08.4 Secure position in
Slide 17: Vessels Employment Chart
Vessels Employment Chart Torm Tekla Min Charter Duration Ariel Max Charter Duration Nikolaos P Irini Tasman Trader YM Qingdao Kuo Hsiung Artemis Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 § 95% of total 2006 days and 50% in 2007 are fixed under TC contracts, or otherwise, protected from market fluctu
Slide 18: Euroseas Fleet Employment
Euroseas Fleet Employment § Our Containerships & Multipurpose vessel are employed under Time Charters with remaining terms from 10 months to more than 5 ½ years § M/V YM Qingdao - ‘til Mar-2007 [ $11,900/day] § M/V Kuo Hsiung - ‘til Nov-2007 [ $16,000/day ‘til Nov-06 then $12,000/day] § M/V Artemis
Slide 19: Agenda
Agenda § Introduction & Recent Events § Company Strategy § Industry background § Financials results and dividend history 19
Slide 20: Overview - Shipping
Overview - Shipping § Directly linked to world trade § If you believe world trade growth will continue, .. .. .. .. shipping is the industry to invest § No substitute to ocean transportation! § Shipping is a worldwide industry - not tied up to a particular region § Invest in China’s growth potential
Slide 21: Dry Bulk & Container Trade Growth
Dry Bulk & Container Trade Growth Dry Bulk Trade Containerized Trade million tons million teu 3,000 120 Other Bulks Steel Products 5.1% p.a. 10.4% p.a. Containerized Trade 2,500 Grains 100 Coal Iron Ore 2,000 80 1,500 60 1,000 40 500 20 0 0 95 96 97 98 99 00 01 02 03 04 05 95 96 97 98 99 00 01 02 03
Slide 22: China Is The Driving Force
China Is The Driving Force Selected Bulk Imports - China Container Exports - China million tons million teu 400 30 Steel Products 350 Grains Containerized Trade 25 Coal 300 Iron Ore 20 250 200 27% p.a. 15 27% p.a. 150 10 100 5 50 0 0 95 96 97 98 99 00 01 02 03 04 05 95 96 97 98 99 00 01 02 03 04 05
Slide 23: Fleet Deliveries 2006-2008
Fleet Deliveries 2006-2008 Dry Bulk Fleet – Current Orderbook 18% Containership Fleet – Orderbook ~50% 30 2,000 1,800 25 1,600 1,400 thousand teu 20 million dwt 1,200 15 1,000 800 10 600 5 400 200 0 0 2006 2007 2008 2006 2007 2008 § Dry bulk market has been able to absorb significant number of deliv
Slide 24: Dry Bulk Rates: 2006 Vs. 2005 & 2004 Comparison
Dry Bulk Rates: 2006 Vs. 2005 & 2004 Comparison Dry Bulk Spot Rates - Handymax 45,000 40,000 35,000 30,000 25,000 usd/day 20,000 15,000 10,000 5,000 2004 2005 2006 0 Aug Nov Sep Dec Jan Feb Jun Apr Oct Jul May Mar Source: Company compiled data based on industry publications 24
Slide 25: Containership Charter Rates
Containership Charter Rates Containership 1-year Time Charter Rates 40,000 35,000 30,000 25,000 usd/day 20,000 15,000 10,000 1000 teu geared 5,000 2000 teu gearless 0 03.01 03.04 03.07 03.10 04.01 04.04 04.07 04.10 05.01 05.04 05.07 05.10 06.01 06.04 06.07 Source: Company compiled data based on indu
Slide 26: Agenda
Agenda § Introduction & Recent Events § Company Strategy § Industry background § Financials results and dividend history 26
Slide 27: Baltic Dry Index Development
Baltic Dry Index Development Baltic Dry Index 5,000 4,500 • BDI is up from a 4,000 2005 recent low point Q1 of about 2030 in 3,500 late-January ‘06 to 3,000 3672 on August 2005 22 2,500 Q2 2006 2005 Q3 • 2006H1 lower that 2,000 2006 2006 2005 Q4 same period in ‘05 Q1 Q2 1,500 Q3 • But in Q3 ’06, BDI
Slide 28: Income Statement, 2003, 2004, 2005 & 2006 H1
Income Statement, 2003, 2004, 2005 & 2006 H1 Six months ended at INCOME STATEMENT Year ending at December 31, June 30, in '000 USD except per share 2003 2004 2005 2005 2006 amounts and number of vessels (audited) (audited) (audited) (unaudited) (unaudited) TC Equivalent revenue 25,514 45,348 43,853
Slide 29: Fleet Data, 2003, 2004, 2005 & 2006 H1
Fleet Data, 2003, 2004, 2005 & 2006 H1 Six months ending at Per Vessel Statistics Year ending at December 31, June 30, in USD/day/vessel 2003 2004 2005 2005 2006 (audited) (audited) (audited) (unaudited) (unaudited) Number of vessels 8.00 7.31 7.10 7.00 8.20 Period Days (days) Calendar 2,920 2,677 2
Slide 30: Balance Sheet Highlights
Balance Sheet Highlights BALANCE SHEET June 30, in USD 2006 Assets (unaudited) Current assets § Unrestricted cash: $20.2 m Cash and cash equivalents 20,205,705 Other current Assets 3,329,399 Total current assets 23,535,104 § Long term debt: $ 47.1 m Vessels, net incl. vessel held for sale 59,679,713
Slide 31: Dividend Policy & History
Dividend Policy & History § “Euroseas plans to distribute, on a quarterly basis, substantially all available cash flow generated by operations less expenses, debt service, reserves for drydocking expenses, special surveys, and after establishing necessary working capital reserves. Necessary working
Slide 32: Conclusion
| EUROSEAS 1710 Conclusion = 32 EMS CINE
Slide 33: Looking Ahead
Looking Ahead § Pleased with our progress today, but determined to continue growing and building our fleet and earnings § We invested $16m out of the $17.5 m (net) raised § We have $7-8 million of cash available for investment ècan purchase one more ship before looking for ways to fund our growth §
Slide 34: Appendix
| EUROSEAS 1710 = EMS CINE
Slide 35: EBITDA Reconciliation
EBITDA Reconciliation Year Ended Year Ended Six Months Six Months December 31, December 31, Ended Ended 2004 2005 June 30, 2005 June 30, 2006 Net income 30,611,765 25,178,454 14,763,374 10,015,456 Interest and finance 521,215 1,035,414 456,021 921,606 costs, net (incl. Interest Income) Depreciation
Slide 36: 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. 2692 Far Vi
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