Euroseas Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2014

MAROUSSI, ATHENS, GREECE--(Marketwired - Aug 7, 2014) - 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, 2014 as well as certain fleet updates.

Second Quarter 2014 Highlights:

• Net loss of $5.0 million; net loss available to common shareholders of $5.4 million or $0.09 loss per share basic and diluted. Total net revenues of $9.6 million. Adjusted net loss available to common shareholders¹ for the period remained the same at $0.09 per share basic and diluted.
  
  
• Adjusted EBITDA¹ was $(1.6) million.
  
  
• An average of 14.4 vessels were owned and operated during the second quarter of 2014 earning an average time charter equivalent rate of $7,373 per day.
  
  
• The Company declared its second 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 Half 2014 Highlights:

• Net loss of $7.2 million; net loss available to common shareholders of $7.9 million or $0.15 loss per share basic and diluted. Total net revenues of $19.1 million. Adjusted net loss per share available to common shareholders¹ for the period was $0.15.
  
  
• Adjusted EBITDA¹ was $(0.6) million.
  
  
• An average of 14.2 vessels were owned and operated during the first half of 2014 earning an average time charter equivalent rate of $7,585 per day.
  
  

¹ Adjusted EBITDA, Adjusted net loss, Adjusted net loss available to common shareholders and Adjusted loss per share available to common shareholders 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 first half and during the month of July of 2014, the drybulk market weakened significantly against expectations widely held in the industry while the containership market remained static at low levels. Despite these developments, we continue to believe that both markets will show a gradual improvement over the rest of 2014 and during 2015. Our fleet continues to have a high exposure to the spot market and our chartering strategy remains to pursue short term charters of 3-12 months when possible. We are thus well positioned to take advantage of an improving market."

Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the second quarter of 2014 reflect the depressed level of the containership and drybulk markets compared to the same quarter of 2013, despite the better commercial utilization rate of the vessels.

"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,449 per vessel per day during the second quarter of 2014 as compared to $6,115 per vessel per day for the same quarter of last year, and $6,398 per vessel per day for the first half of 2014 as compared to $6,192 per vessel per day for the same period of 2013, reflecting a 5.5% and 3.3% increase, respectively. As always, we want to emphasize that cost control remains a key component of our strategy.

"On the financing front, we were able to secure financing for our recent acquisition of M/V Eirini P as well as refinance the balloon payment of loan of M/V Eleni P. As of June 30, 2014, our outstanding debt was $59.4 million versus restricted and unrestricted cash of about $46.4 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $14.6 million, inclusive of about $4.9 million of balloon repayments which may be refinanced. All our debt covenants are satisfied."

Second Quarter 2014 Results:
For the second quarter of 2014, the Company reported total net revenues of $9.6 million representing a 0.7% increase over total net revenues of $9.6 million during the second quarter of 2013. The Company reported net loss for the period of $5.0 million, net loss available to common shareholders of $5.4 million, as compared to net loss of $8.9 million for the second quarter of 2013. The results for the second quarter of 2014 include a $0.2 million unrealized gain on derivatives, a $0.2 million realized loss on derivatives, as compared to $0.4 million unrealized gain on derivatives, a $0.4 million realized loss on derivatives and $3.2 million loss on sale of a vessel for the same period of 2013.

Depreciation expenses for the second quarter of 2014 were $3.0 million compared to $4.2 million during the same period of 2013. On average, 14.4 vessels were owned and operated during the second quarter of 2014 earning an average time charter equivalent rate of $7,373 per day compared to 14.96 vessels in the same period of 2013 earning on average $7,708 per day. 

Adjusted EBITDA for the second quarter of 2014 was $(1.6) million compared to $(1.0) million achieved during the second quarter of 2013. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share available to common shareholders for the second quarter of 2014 was $0.09 calculated on 56,888,123 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.20 for the second quarter of 2013, calculated on 45,319,605 basic and diluted weighted average number of shares outstanding. 

Excluding the effect, on the loss available to common shareholders, for the quarter of the unrealized gain on derivatives and the realized loss on derivatives, the adjusted net loss per share available to common shareholders for the quarter ended June 30, 2014 remained $0.09 per share basic and diluted compared to net loss of $0.12 per share basic and diluted for the quarter ended June 30, 2013. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Half 2014 Results:
For the first half of 2014, the Company reported total net revenues of $19.1 million representing a 6.5% decrease over total net revenues of $20.5 million during the first half of 2013. The Company reported a net loss for the period of $7.2 million, net loss available to common shareholders of $7.9, as compared to net loss of $13.5 million for the first half of 2013. The results for the first half of 2014 include a $0.3 million unrealized gain on derivatives, a $0.4 million realized loss on derivatives as compared to $0.9 million unrealized gain on derivatives, a $0.9 million realized loss on derivatives and a $3.2 million loss on sale of a vessel for the same period of 2013.

Depreciation expenses for the first half of 2014 were $5.8 million compared to $8.5 million during the same period of 2013. On average, 14.2 vessels were owned and operated during the first half of 2014 earning an average time charter equivalent rate of $7,585 per day compared to 14.98 vessels in the same period of 2013 earning on average $8,256 per day. 

Adjusted EBITDA for the first half of 2014 was $(0.6) million compared to $(1.1) million achieved during the first half of 2013. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share available to common shareholders for the first half of 2014 was $0.15 respectively, calculated on 52,446,850 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $0.30 for the first half of 2013, calculated on 45,319,605 basic and diluted weighted average number of shares outstanding. 

Excluding the effect, on the loss available to common shareholders, for the first half of 2014 of the unrealized gain on derivatives, realized loss on derivatives and the loss on sale of vessel, the adjusted net loss per share available to common shareholders for the six-month period ended June 30, 2014 remained $0.15 compared to loss of $0.23 per share basic and diluted for the same period in 2013. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:

Name		Type		Dwt		TEU		Year Built		Employment		TCE Rate ($/day)
Dry Bulk Vessels
Vessels in the water
EIRINI P		Panamax		76,466				2004		TC 'til Oct-14		$9,000
PANTELIS		Panamax		74,020				2000		TC 'til Feb-15		105% of average BPI 4TC
ELENI P		Panamax		72,119				1997		TC 'til Oct-14		97% of average BPI 4TC
ARISTIDES N.P.		Panamax		69,268				1993		TC 'til Aug-14		$4,000
MONICA P		Handymax		46,667				1998		TC 'til Sep-14		$7,500
Vessels under construction (*)
Hull Number YZJ 1116		Kamsarmax		82,000				2015		N/A
Hull Number YZJ 1153		Kamsarmax		82,000				2016		N/A
Hull Number DY 160		Ultramax		63,500				2015		N/A
Hull Number DY 161		Ultramax		63,500				2016		N/A
Total Dry Bulk Vessels		9		629,540
Container Carriers
EVRIDIKI G		Intermediate		34,677		2,556		2001		TC 'til Apr -15		$8,200
TIGER BRIDGE		Intermediate		31,627		2,228		1990		TC 'til Sep -14		$6,800
AGGELIKI P		Intermediate		30,360		2,008		1998		TC 'til Sep-14		$6,950
DESPINA P		Handy size		33,667		1,932		1990		TC 'til Sep-14		$6,950
CAPTAIN COSTAS		Handy size		30,007		1,742		1992		TC 'til Aug-14 Thereafter TC 'til Jul-15		$6,500 $7,750
JOANNA		Handy size		22,301		1,732		1999		Voyage Colombia - China starting Aug 2014		$400,000 (lumpsum)
MARINOS		Handy size		23,596		1,599		1993		TC 'til Nov-14 + 5 months in Charterers Option		$7,150 $8,000
MANOLIS P		Handy size		20,346		1,452		1995		TC 'til Mar-15		$7,200
NINOS		Feeder		18,253		1,169		1990		TC 'til Oct-14		$8,200
KUO HSIUNG		Feeder		18,154		1,169		1993		TC 'til Jul-15		$8,700
Total Container Carriers		10		262,988		17,587
Fleet Grand Total		19		892,528		17,587

Note: (*) Vessels are to be delivered in the fourth quarter of 2015 (one ultramax and one kamsarmax), the other ultramax in the first quarter of 2016 and the other kamsarmax in the fourth quarter of 2016.

Summary Fleet Data:

		Three Months, ended June 30, 2013		Three Months, ended June 30, 2014		Six Months, ended June 30, 2013		Six Months, ended June 30, 2014
FLEET DATA
Average number of vessels (1)		14.96		14.40		14.98		14.20
Calendar days for fleet (2)		1,361		1,310		2,711		2,570
Scheduled off-hire days incl. laid-up (3)		34.26		64.25		100.37		64.25
Available days for fleet (4) = (2) - (3)		1,327		1,246		2,611		2,506
Commercial off-hire days (5)		124.07		6.67		132.5		6.67
Operational off-hire days (6)		2.90		3.66		19.35		5.94
Voyage days for fleet (7) = (4) - (5) - (6)		1,200		1,235		2,459		2,493
Fleet utilization (8) = (7) / (4)		90.4%		99.2%		94.2%		99.5%
Fleet utilization, commercial (9) = ((4) - (5)) / (4)		90.6%		99.5%		95.0%		99.7%
Fleet utilization, operational (10) = ((4) - (6)) / (4)		99.8%		99.7%		99.3%		99.8%
AVERAGE DAILY RESULTS
Time charter equivalent rate (11)		7,708		7,373		8,256		7,585
Vessel operating expenses excl. drydocking expenses (12)		5,534		5,708		5,545		5,628
General and administrative expenses (13)		581		741		647		771
Total vessel operating expenses (14)		6,115		6,449		6,192		6,398
Drydocking expenses (15)		783		982		1,063		525

(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of our 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 in our possession 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. We use available days to measure the number of days in a period during which vessels were available to generate revenues.

(4) Available days. We define available days as the total number of days in a period during which each vessel in our fleet was in our possession net of scheduled off-hire days including days of vessels laid-up.

(5) Commercial off-hire days. We define commercial off-hire days as days waiting to find 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.

(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 net of operational off-hire days during a period by our available days during that period.

(11) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is determined by dividing revenue generated from voyage charters 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. 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 and bareboat charters) under which the vessels may be employed between the periods.

(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 expense 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 excluding drydocking expenses and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

(15) Drydocking expenses, which 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.

Conference Call and Webcast:
Tomorrow, Friday, August 8, 2014 at 9:00 a.m. ET, the company's management will host a conference call to discuss the results.

Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (from the US), 0800 953 0329 (from the UK) or +44 (0)1452 542 301 (from outside the US). Please quote "Euroseas."

A recording of the conference call will be available until August 15, 2014 by dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 (0)1452 550 000 (international standard dial in). Access Code: 6973591#

Audio webcast - Slides Presentation:
There will be a live and then archived audio webcast of the conference call, via the internet through the Euroseas website (www.euroseas.gr). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. A slide presentation on the Second Quarter and First Half 2014 results in PDF format will also be available 30 minutes prior to the conference call and webcast accessible on the company's website (www.euroseas.gr) on the webcast page. Participants to the webcast can download the PDF presentation.

Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars - except number of shares)
		Three Months Ended June 30,			Three Months Ended June 30,			Six Months Ended June 30,			Six Months Ended June 30,
		2013			2014			2013			2014
		(unaudited)						(unaudited)
Revenues
Voyage revenue		9,986,356			10,081,816			21,325,722			20,048,813
Related party revenue		60,000			60,000			120,000			120,000
Commissions		(474,540	)		(502,688	)		(962,283	)		(1,030,826	)
Net revenues		9,571,816			9,639,128			20,483,439			19,137,987
Operating expenses
Voyage expenses		748,642			1,002,655			997,718			1,138,951
Vessel operating expenses		6,298,912			6,238,260			12,558,899			12,036,879
Drydocking expenses		1,066,242			1,286,807			2,878,644			1,372,211
Depreciation		4,218,799			2,972,497			8,501,893			5,825,417
Net loss on sale of vessel		3,191,678			-			3,191,678			-
Management fees		1,232,925			1,238,792			2,473,650			2,430,598
Other general and administrative expenses		790,850			970,903			1,754,396			1,978,792
Total operating expenses		17,548,048			13,709,914			32,356,878			24,782,848
Operating loss		(7,976,232	)		(4,070,786	)		(11,873,439	)		(5,644,861	)
Other income/(expenses)
Interest and finance cost		(489,237	)		(487,781	)		(968,577	)		(957,923	)
Loss on derivatives, net		(22,802	)		(54,211	)		(2,027	)		(95,865	)
Other investment income		-			237,500			-			475,000
Foreign exchange gain / (loss)		(2,929	)		(702	)		3,766			404
Interest income		48,350			145,653			236,818			255,269
Other expenses, net		(466,618	)		(159,541	)		(730,020	)		(323,115	)
Equity loss in joint venture		(431,760	)		(786,770	)		(897,459	)		(1,262,204	)
Net loss		(8,874,610	)		(5,017,097	)		(13,500,918	)		(7,230,180	)
Dividend Series B Preferred shares		-			(387,055	)		-			(651,416	)
Net loss available to common shareholders		-			(5,404,152	)		-			(7,881,596	)
Loss per share, basic and diluted		(0.20	)		(0.09	)		(0.30	)		(0.15	)
Weighted average number of shares, basic and diluted		45,319,605			56,888,123			45,319,605			52,446,850

Euroseas Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars - except number of shares)
			December 31, 2013			June 30, 2014
ASSETS			(unaudited)
Current Assets:
	Cash and cash equivalents		11,400,237			38,384,909
	Trade accounts receivable		1,879,151			535,190
	Other receivables, net		1,440,833			1,015,299
	Inventories		1,474,114			1,950,650
	Restricted cash		462,415			294,059
	Prepaid expenses		295,248			325,093
Total current assets			16,951,998			42,505,200
Fixed assets:
	Vessels, net		105,463,737			120,962,255
	Advances for vessels under construction		50,122			12,462,459
Long-term assets:
	Restricted cash		7,400,000			7,700,000
	Deferred charges, net		338,431			370,775
	Other Investments		5,196,196			5,671,196
	Investment in joint venture		21,215,870			19,953,665
Total long-term assets			139,664,356			167,120,350
Total assets			156,616,354			209,625,550
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Long term debt, current portion		12,862,000			14,617,000
	Trade accounts payable		2,336,952			4,135,843
	Accrued expenses		1,002,445			1,534,726
	Accrued dividends		13,050			13,050
	Deferred revenue		996,599			1,544,644
	Due to related company		903,478			1,025,071
	Derivatives		697,889			501,015
Total current liabilities			18,812,413			23,371,349
Long-term liabilities:
	Long term debt, net of current portion		32,782,000			44,821,000
	Derivatives		319,859			174,831
Total long-term liabilities			33,101,859			44,995,831
Total liabilities			51,914,272			68,367,180
Mezzanine equity:
	Series B Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 0 and 31,351 shares issued and outstanding, respectively)		-			29,651,416
Shareholders' equity:
	Common stock (par value $0.03, 200,000,000 shares authorized,45,723,255 and 56,888,123 issued and outstanding)		1,371,698			1,706,644
	Additional paid-in capital		252,314,683			266,766,205
	Accumulated deficit		(148,984,299	)		(156,865,895	)
Total shareholders' equity			104,702,082			111,606,954
Total liabilities and shareholders' equity			156,616,354			209,625,550

Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
		Six Months Ended June 30,			Six Months Ended June 30,
		2013			2014
Cash flows from operating activities:
Net loss		(13,500,918	)		(7,230,180	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of vessels		8,501,893			5,825,417
Loss on sale of vessel		3,191,678			-
Amortization of deferred charges		84,236			61,978
Loss in investment in joint venture		897,459			1,262,204
Share-based compensation		367,429			286,468
Unrealized gain on derivatives		(882,937	)		(341,902	)
Other income accrued		-			(475,000	)
Changes in operating assets and liabilities		4,222,768			3,541,086
Net cash provided by operating activities		2,881,608			2,930,071
Cash flows from investing activities:
Contribution to joint venture		(6,250,000	)		-
Vessel acquisition and advances for vessels under construction		(636,602	)		(33,230,898	)
Proceeds from sale of vessel		3,569,159			-
Change in restricted cash		(995,497	)		(131,644	)
Net cash used in investing activities		(4,312,940	)		(33,362,542	)
Cash flows from financing activities:
Proceeds from issuance of common stocks, net		-			14,550,000
Proceeds from issuance of preferred stocks, net		-			29,700,000
Dividends paid		(1,357,986	)		-
Loan fees paid		-			(260,000	)
Offering expenses paid		-			(366,857	)
Proceeds from long term debt		-			23,300,000
Repayment of long-term debt		(7,456,000	)		(9,506,000	)
Net cash (used in) / provided by financing activities		(8,813,986	)		57,417,143
Net (decrease) / increase in cash and cash equivalents		(10,245,318	)		26,984,672
Cash and cash equivalents at beginning of period		33,374,960			11,400,237
Cash and cash equivalents at end of period		23,129,642			38,384,909

Euroseas Ltd.
Reconciliation of Adjusted EBITDA to
Net loss and Cash Flow Provided by Operating Activities
(All amounts expressed in U.S. Dollars)
		Three Months Ended June 30, 2013			Three Months Ended June 30, 2014			Six Months Ended June 30, 2013			Six Months Ended June 30, 2014
Net loss		(8,874,610	)		(5,017,097	)		(13,500,918	)		(7,230,180	)
Interest and finance costs, net (incl. interest income)		440,887			342,128			731,759			702,654
Depreciation		4,218,799			2,972,497			8,501,893			5,825,417
Unrealized and realized loss on derivatives, net		22,802			54,211			2,027			95,865
Loss on sale of vessel		3,191,678			-			3,191,678			-
Adjusted EBITDA		(1,000,444	)		(1,648,261	)		(1,073,561	)		(606,244	)
		Three Months Ended June 30, 2013			Three Months Ended June 30, 2014			Six Months Ended June 30, 2013			Six Months Ended June 30, 2014
Net cash flow provided by operating activities		1,266,355			3,164,759			2,881,608			2,930,071
Changes in operating assets / liabilities		(2,527,115	)		(4,651,269	)		(4,222,768	)		(3,541,086	)
Loss on derivatives (realized)		443,825			216,946			884,964			437,767
Equity loss in joint venture and Other investment income, net		(431,760	)		(549,270	)		(897,459	)		(787,204	)
Share-based compensation		(158,683	)		(140,428	)		(367,429	)		(286,468	)
Interest, net		406,934			311,001			647,523			640,676
Adjusted EBITDA		(1,000,444	)		(1,648,261	)		(1,073,561	)		(606,244	)

Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings / (loss) before interest, income taxes, depreciation, amortization, gain / loss in derivatives and loss on sale of vessel. Adjusted EBITDA does not represent and should not be considered as an alternative to net income /(loss) or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and the Company's calculation of Adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which the Company assesses its financial performance and liquidity position and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. The Company's definition of Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries.

Euroseas Ltd.
Reconciliation of Net loss to Adjusted net loss
(All amounts expressed in U.S. Dollars - except share data and number of shares)
		Three Months Ended June 30, 2013			Three Months Ended June 30, 2014			Six Months Ended June 30, 2013			Six Months Ended June 30, 2014
Net loss		(8,874,610	)		(5,017,097	)		(13,500,918	)		(7,230,180	)
Unrealized gain on derivatives		(421,023	)		(162,735	)		(882,937	)		(341,902	)
Realized loss on derivatives		443,825			216,946			884,964			437,767
Loss on sale of vessel		3,191,678			-			3,191,678			-
Adjusted net loss		(5,660,130	)		(4,962,886	)		(10,307,213	)		(7,134,315	)
Preferred dividends		-			(387,055	)		-			(651,416	)
Adjusted net loss available to common shareholders		(5,660,130	)		(5,349,941	)		(10,307,213	)		(7,785,731	)
Adjusted net loss per share, basic and diluted		(0.12	)		(0.09	)		(0.23	)		(0.15	)
Weighted average number of shares, basic and diluted		45,319,605			56,888,123			45,319,605			52,446,850

Adjusted Net Loss and Adjusted Net Loss per share Reconciliation:
Euroseas Ltd. considers Adjusted Net Loss to represent net loss before gain / loss in derivatives and loss on sale of vessel. Adjusted Net loss and Adjusted Net 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 gain / loss on derivatives and loss on sale of vessel, which items may significantly affect results of operations between periods.

Adjusted Net loss and Adjusted Net loss per share do not represent and should not be considered as an alternative to net loss or loss per share, as determined by U.S. GAAP, The Company's definition of Adjusted Net loss and Adjusted Net loss per share may not be the same as that used by other companies in the shipping or other industries

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 136 years. Euroseas trades on the NASDAQ Global Market under the ticker ESEA since January 31, 2007.

Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2008 certified affiliated ship management company which is 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 15 vessels, including 4 Panamax drybulk carriers and 1 Handymax drybulk carrier, 3 Intermediate containership, 5 Handysize containerships, 2 Feeder containerships. Euroseas` 5 drybulk carriers have a total cargo capacity of 338,540 dwt, its 10 containerships have a cargo capacity of 17,587 teu. The Company has also signed contracts for the construction of two Ultramax (63,500 dwt) fuel efficient drybulk carriers and two Kamsarmax (82,000 dwt) fuel efficient drybulk carriers. Including the four new-buildings, the total cargo capacity of the Company's drybulk vessels will be 629,540 dwt.

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 and container ships, 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.euroseas.gr