UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2012
Commission File Number: 001-33655
| Paragon Shipping Inc. |
| (Translation of registrant's name into English) |
| 15 Karamanli Ave., GR 166 73, Voula, Greece |
| (Address of principal executive office) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)7: ___
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K
Attached to this report on Form 6-K as Exhibit 1 is a press release dated August 23, 2012 announcing the results of Paragon Shipping Inc. for the second quarter and six months ended June 30, 2012.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Paragon Shipping Inc. | |||
| Dated: August 27, 2012 | By: | /s/ Michael Bodouroglou | |
| Name: | Michael Bodouroglou | ||
| Title: | Chief Executive Officer | ||
Exhibit 1
PARAGON SHIPPING INC. REPORTS SECOND QUARTER AND SIX MONTHS ENDED
JUNE 30, 2012 RESULTS
ATHENS, Greece, August 23, 2012 - Paragon Shipping Inc. (NYSE: PRGN) ("Paragon Shipping", or the "Company"), a global shipping transportation company specializing in drybulk cargoes, announced today its results for the second quarter and six months ended June 30, 2012.
Financial Highlights
(Expressed in United States Dollars where applicable)
Quarter Ended June 30, 2011 | Quarter Ended June 30, 2012 | Six Months Ended June 30, 2011 | Six Months Ended June 30, 2012 | |||||||||||||
| Average Number of Vessels | 11.8 | 10.8 | 12.4 | 10.4 | ||||||||||||
Time Charter Equivalent rate (TCE) (1) | 22,415 | 11,878 | 23,243 | 12,618 | ||||||||||||
| Net Revenue | 23,647,640 | 11,949,526 | 51,136,803 | 24,426,712 | ||||||||||||
EBITDA (1) | (4,834,833 | ) | 6,349,055 | 12,824,491 | 12,971,559 | |||||||||||
Adjusted EBITDA (1) | 16,456,658 | 6,637,339 | 34,771,017 | 13,673,923 | ||||||||||||
| Net (Loss) / Income | (16,777,396 | ) | 179,354 | (11,352,300 | ) | 899,191 | ||||||||||
Adjusted Net Income (1) | 5,202,356 | 467,638 | 11,963,185 | 1,601,555 | ||||||||||||
| (Loss) / Earnings Per Share basic and diluted | (0.280 | ) | 0.003 | (0.192 | ) | 0.015 | ||||||||||
Adjusted EPS basic and diluted (1) | 0.087 | 0.008 | 0.203 | 0.026 | ||||||||||||
| (1) | Please see the table at the back of this release for a reconciliation of TCE to Time Charter Revenue, EBITDA and Adjusted EBITDA to Net Income, Adjusted Net Income to Net Income and Adjusted Earnings Per Share to Earnings Per Share, the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). |
Time Charter Coverage Update
Pursuant to its time chartering strategy, the Company mainly employs vessels under fixed rate time charters for periods ranging from one to five years.
Assuming all charter counter parties fully perform under the terms of the charters, all exercisable optional periods under the charter parties are exercised and including our newbuilding vessels, the Company has secured employment for 97%, 69% and 35% of its available days in 2012, 2013 and 2014, respectively.
Management Commentary
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, "We are pleased to announce our results for the quarter and six months ended June 30, 2012. For the second quarter of 2012, Paragon reported Adjusted EBITDA of $6.6 million and Adjusted Net Income of $0.5 million, or about $0.01 per share. Regarding our fleet development, the second quarter of 2012 had been very active. As previously announced, our first newbuilding vessels, the M/V Prosperous Seas and the M/V Precious Seas, were successfully delivered to our Company. On average, we operated 10.8 vessels, with our utilization rate being more than 99%."
Mr. Bodouroglou continued, "Since the beginning of 2012, the drybulk market has been fluctuating at depressed levels and we expect the downturn to continue also during 2013, as the overcapacity problem remains. Nonetheless, Paragon has secured the majority of its revenue days in 2012 and 2013, ensuring visible cash flows during this challenging period. As of June 30, 2012, based on earliest redelivery dates, we have secured time charter revenues of approximately $58 million, out of which $24 million has been secured in 2012."
Mr. Bodouroglou concluded, "We remain confident that our proactive approach in addressing actual and potential deficiencies will enable the Company to overcome the difficult times ahead."
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Second Quarter 2012 Financial Results
Gross time charter revenue for the second quarter of 2012 was $12.7 million, compared to $25.1 million for the second quarter of 2011. The Company reported net income of $0.2 million, or $0.003 per basic and diluted share, for the second quarter of 2012, calculated on 59,208,321 weighted average number of basic and diluted shares outstanding for the period and reflecting the impact of the non-cash items discussed below. For the second quarter of 2011, the Company reported net loss of $16.8 million, or $0.280 per basic and diluted share, calculated on 58,254,929 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the second quarter of 2012 was $0.5 million, or $0.008 per basic and diluted share, compared to adjusted net income of $5.2 million, or $0.087 per basic and diluted share, for the second quarter of 2011.
EBITDA for the second quarter of 2012 was positive $6.3 million, compared to negative $4.8 million for the second quarter of 2011. EBITDA for the second quarter of 2012 was calculated by adding to net income of $0.2 million, net interest expense and depreciation that, in the aggregate, amounted to $6.2 million. Adjusted EBITDA, excluding all non-cash items described below, was $6.6 million for the second quarter of 2012, compared to $16.5 million for the second quarter of 2011.
The Company operated an average of 10.8 vessels during the second quarter of 2012, earning an average TCE rate of $11,878 per day, compared to an average of 11.8 vessels during the second quarter of 2011, earning an average TCE rate of $22,415 per day.
Total adjusted operating expenses for the second quarter of 2012 equaled $6.7 million, or approximately $6,870 per day per vessel, including vessel operating expenses, management fees, general and administrative expenses and drydocking costs, but excluding $0.8 million of share-based compensation for the period. For the second quarter of 2011, total adjusted operating expenses were $8.3 million, or approximately $7,734 per day per vessel, including the same items as mentioned above, but excluding $1.3 million of share-based compensation.
As of June 30, 2012, the Company owned approximately 21.1% of the outstanding common stock of Box Ships Inc. (NYSE:TEU) ("Box Ships"), a former wholly-owned subsidiary of the Company which successfully completed its initial public offering in April 2011. Currently, following the share offering concluded by Box Ships on July 13, 2012, the Company owns approximately 16.7% of the outstanding common stock of Box Ships. The investment in Box Ships, an affiliate, is accounted for under the equity method and is separately reflected on Company's unaudited condensed consolidated balance sheet. For the second quarter of 2012, the Company recorded income of $0.4 million, representing its share of Box Ships' net income for the period, compared to $0.5 million for the second quarter of 2011. In the second quarter of 2012, we received a cash amount of $1.0 million representing dividend distributions from Box Ships.
Second Quarter 2012 Non-cash Items
The Company's results for the three months ended June 30, 2012 included the following non-cash items:
| ● | An unrealized gain from interest rate swaps of $0.5 million, or $0.008 per basic and diluted share, respectively. |
| ● | Non-cash expenses of $0.8 million, or $0.013 per basic and diluted share, relating to the amortization of the compensation cost recognized for non-vested share awards issued to the Company's executive officers, directors and employees. |
In total, these non-cash items decreased net income by $0.3 million, or $0.005 per basic and diluted share, for the three months ended June 30, 2012.
Six months ended June 30, 2012 Financial Results:
Gross time charter revenue for the six months ended June 30, 2012, was $25.9 million, compared to $54.1 million for the six months ended June 30, 2011. The Company reported net income of $0.9 million, or $0.015 per basic and diluted share, for the six months ended June 30, 2012, calculated on 59,131,947 weighted average number of basic and diluted shares outstanding for the period and reflecting the impact of the non-cash items discussed below. For the six months ended June 30, 2011, the Company reported net loss of $11.4 million, or $0.192 per basic and diluted share, calculated on 57,276,048 weighted average number of basic and diluted shares.
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Excluding all non-cash items described below, adjusted net income for the six months ended June 30, 2012, was $1.6 million, or $0.026 per basic and diluted share. Adjusted net income for the six months ended June 30, 2011 was $12.0 million, or $0.203 per basic and diluted share.
EBITDA was $13.0 million for the six months ended June 30, 2012, compared to $12.8 million for the six months ended June 30, 2011. This was calculated by adding to net income of $0.9 million for the six months ended June 30, 2012, net interest expense and depreciation, that in the aggregate, amounted to $12.1 million for the six months ended June 30, 2012. Adjusted EBITDA, excluding all non-cash items described below, was $13.7 million for the six months ended June 30, 2012, compared to $34.8 million for the six months ended June 30, 2011.
The Company operated an average of 10.4 vessels during the six months ended June 30, 2012, earning an average TCE rate of $12,618 per day, compared to an average of 12.4 vessels during the six months ended June 30, 2011, earning an average TCE rate of $23,243 per day.
Total adjusted operating expenses for the six months ended June 30, 2012, were $12.8 million, or approximately $6,779 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $1.6 million of share-based compensation for the period. For the six months ended June 30, 2011, total adjusted operating expenses were $17.1 million, or approximately $7,615 per day, including vessel operating expenses, management fees and general and administrative expenses and drydocking costs, but excluding $2.9 million of share-based compensation.
For the six months ended June 30, 2012, the Company recorded $1.4 million income, representing its share of Box Ships' net income for the period, compared to $0.5 million for the six months ended June 30, 2011. In the first half of 2012, we received a cash amount of $2.1 million representing dividend distributions from Box Ships.
Six months ended June 30, 2012 Non-cash Items
The Company's results for the six months ended June 30, 2012, included the following non-cash items:
| ● | An unrealized gain from interest rate swaps of $0.9 million, or $0.015 per basic and diluted share, respectively. |
| ● | Non-cash expenses of $1.6 million, or $0.026 per basic and diluted share, relating to the amortization of the compensation cost recognized for non-vested share awards issued to the Company's executive officers, directors and employees. |
In the aggregate, these non-cash items decreased net income by $0.7 million, which represents a $0.011 decrease in earnings per basic and diluted share, for the six months ended June 30, 2012.
Cash Flows
For the six months ended June 30, 2012, the Company generated net cash from operating activities of $7.4 million, compared to $24.7 million for the six months ended June 30, 2011. For the six months ended June 30, 2012, net cash used in investing activities was $22.0 million and net cash from financing activities was $7.7 million. For the six months ended June 30, 2011, net cash from investing activities was $16.2 million and net cash used in financing activities was $55.5 million.
Financing Update
As of June 30, 2012, we are not in compliance with the EBITDA coverage ratio covenant contained in one of our loan agreements and the security cover ratio contained in four of our loan agreements. As a result, the Company may be required either to prepay indebtedness, provide additional collateral in the form of cash or other property or obtain waivers and amendments to the respective terms of the facilities. The Company is currently in discussions with its respective lenders in order to address the issue in a mutually beneficial way. If the Company is not able to reach a mutually acceptable resolution with its lenders, our lenders may reclassify our indebtedness as a current liability, accelerate our indebtedness and foreclose their liens on our vessels, which would impair our ability to continue to conduct our business.
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Conference Call and Webcast details
The Company's management team will host a conference call to discuss its second quarter and six months ended June 30, 2012 results on August 23, 2012 at 9:00 am Eastern Time.
Participants should dial into the call ten minutes before the scheduled time using the following numbers 1-877-317-6789 (USA) or +1-412-317-6789 (international) to access the call. A replay of the conference call will be available until August 31, 2012 and can be accessed by dialing 1-877-344-7529 (USA) or +1-412-317-0088 (international) and using passcode 10017773.
Slides and audio webcast
There will also be a simultaneous live webcast through the Company's website, www.paragonship.com. Participants should register on the website approximately ten minutes prior to the start of the webcast. If you would like a copy of the release mailed or faxed, please contact Allen & Caron Investor Relations at 212-691-8087.
About Paragon Shipping Inc.
Paragon Shipping is a Marshall Islands-based international shipping company with executive offices in Athens, Greece, specializing in the transportation of drybulk cargoes. The Company's current fleet consists of twelve drybulk vessels with a total carrying capacity of 779,270 dwt. In addition, the Company's current newbuilding program consists of two Handysize drybulk carriers that are scheduled to be delivered in 2012 and two 4,800 TEU Containerships that are scheduled to be delivered in 2013. Paragon Shipping has granted Box Ships Inc., an affiliated company, the option to acquire its two Containerships under construction. For more information, visit: www.paragonship.com (the information contained on the Company's website does not constitute part of this press release).
Forward-Looking Statements
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, without limitation, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for drybulk shipping capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors, as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov.
Contacts:
Paragon Shipping Inc.
info@paragonship.com
Allen & Caron Inc.
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087
Len Hall (Media)
len@allencaron.com
(949) 474-4300
- Tables Follow -
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Fleet List
Drybulk Fleet
The following tables represent our drybulk fleet and the drybulk newbuilding vessels that we have agreed to acquire as of August 23, 2012.
Operating Drybulk Fleet
| Name | Type | Dwt | Year Built |
| Panamax | |||
| Dream Seas | Panamax | 75,151 | 2009 |
| Coral Seas | Panamax | 74,477 | 2006 |
| Golden Seas | Panamax | 74,475 | 2006 |
| Pearl Seas | Panamax | 74,483 | 2006 |
| Diamond Seas | Panamax | 74,274 | 2001 |
| Deep Seas | Panamax | 72,891 | 1999 |
| Calm Seas | Panamax | 74,047 | 1999 |
| Kind Seas | Panamax | 72,493 | 1999 |
| Total Panamax | 8 | 592,291 | |
| Supramax | |||
| Friendly Seas | Supramax | 58,779 | 2008 |
| Sapphire Seas | Supramax | 53,702 | 2005 |
| Total Supramax | 2 | 112,481 | |
| Handysize | |||
| Prosperous Seas | Handysize | 37,293 | 2012 |
| Precious Seas | Handysize | 37,205 | 2012 |
| Total Handysize | 2 | 74,498 | |
| Grand Total | 12 | 779,270 | |
Drybulk Newbuildings that we have agreed to acquire
| Hull no. | Type | Dwt | Expected Delivery |
| Handysize | |||
| Hull no. 612 | Handysize | 37,200 | Q4 2012 |
| Hull no. 625 | Handysize | 37,200 | Q4 2012 |
| Total Handysize | 2 | 74,400 | |
Containership Fleet
The following table represents the containership newbuilding vessels that we have agreed to acquire as of August 23, 2012.
Containership Newbuildings that we have agreed to acquire
| Hull no. | TEU | Dwt | Expected Delivery |
Hull no. 656 (1) | 4,800 | 56,500 | 2013 |
Hull no. 657 (1) | 4,800 | 56,500 | 2013 |
| Total | 9,600 | 113,000 |
(1) The Company has granted to Box Ships an option to purchase.
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Summary Fleet Data
(Expressed in United States Dollars where applicable)
Quarter Ended June 30, 2011 | Quarter Ended June 30, 2012 | |
| FLEET DATA | ||
| Average number of vessels (1) | 11.8 | 10.8 |
| Available days for fleet (2) | 1,048 | 974 |
| Calendar days for fleet (3) | 1,077 | 981 |
| Fleet utilization (4) | 97.3% | 99.3% |
| AVERAGE DAILY RESULTS | ||
| Time charter equivalent (5) | 22,415 | 11,878 |
| Vessel operating expenses (6) | 4,310 | 4,616 |
| Drydocking expenses (7) | 983 | - |
| Management fees - related party adjusted (8) | 1,147 | 998 |
| General and administrative expenses adjusted (9) | 1,294 | 1,256 |
| Total vessel operating expenses adjusted (10) | 7,734 | 6,870 |
Six Months Ended June 30, 2011 | Six Months Ended June 30, 2012 | |
| FLEET DATA | ||
| Average number of vessels (1) | 12.4 | 10.4 |
| Available days for fleet (2) | 2,183 | 1,882 |
| Calendar days for fleet (3) | 2,247 | 1,891 |
| Fleet utilization (4) | 97.2% | 99.5% |
| AVERAGE DAILY RESULTS | ||
| Time charter equivalent (5) | 23,243 | 12,618 |
| Vessel operating expenses (6) | 4,476 | 4,376 |
| Drydocking expenses (7) | 806 | - |
| Management fees charged by a related party adjusted (8) | 1,052 | 1,016 |
| General and administrative expenses adjusted (9) | 1,281 | 1,387 |
| Total vessel operating expenses adjusted (10) | 7,615 | 6,779 |
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| (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 the period. |
| (2) | Available days for the fleet are the total calendar days the vessels were in our possession for the relevant period after subtracting off-hire days for major repairs, drydocks or special or intermediate surveys. |
| (3) | Calendar days are the total days we possessed the vessels in our fleet for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys. |
| (4) | Fleet utilization is the percentage of time that our vessels were available for revenue generating available days and is determined by dividing available days by fleet calendar days for the relevant period. |
| (5) | Time charter equivalent ("TCE") is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing Net Revenue generated from charters less voyage expenses by available days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage. TCE is a non-GAAP 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. |
| (6) | Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. |
| (7) | Daily drydocking expenses are calculated by dividing drydocking expenses by fleet calendar days for the relevant time period. |
| (8) | Daily management fees - related party adjusted are calculated by dividing management fees charged by a related party, excluding share based compensation to the management company, by fleet calendar days for the relevant time period. |
| (9) | Daily general and administrative expenses adjusted are calculated by dividing general and administrative expenses, excluding non-cash expenses relating to the amortization of the share based compensation cost for non-vested share awards, by fleet calendar days for the relevant time period. |
| (10) | Total vessel operating expenses ("TVOE") is a measurement of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses, drydocking expenses, management fees and general and administrative expenses. Daily TVOE adjusted is calculated by dividing TVOE, excluding non-cash expenses relating to the amortization of the share based compensation cost for non-vested share awards and share based compensation to the management company, by fleet calendar days for the relevant time period. |
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Time Charter Equivalents Reconciliation
(Expressed in United States Dollars where applicable)
Quarter Ended June 30, 2011 | Quarter Ended June 30, 2012 | |||||||
| Time Charter Revenue | 25,093,684 | 12,662,352 | ||||||
| Voyage Expenses | (156,813 | ) | (380,126 | ) | ||||
| Commissions | (1,446,044 | ) | (712,826 | ) | ||||
| Net Revenue, net of voyage expenses | 23,490,827 | 11,569,400 | ||||||
| Total available days | 1,048 | 974 | ||||||
| Time Charter Equivalent | 22,415 | 11,878 | ||||||
Six Months Ended June 30, 2011 | Six Months Ended June 30, 2012 | |||||||
| Time Charter Revenue | 54,113,203 | 25,856,283 | ||||||
| Voyage Expenses | (396,860 | ) | (679,815 | ) | ||||
| Commissions | (2,976,400 | ) | (1,429,571 | ) | ||||
| Net Revenue, net of voyage expenses | 50,739,943 | 23,746,897 | ||||||
| Total available days | 2,183 | 1,882 | ||||||
| Time Charter Equivalent | 23,243 | 12,618 | ||||||
Condensed Cash Flow Information (Unaudited)
(Expressed in United States Dollars)
Six Months Ended June 30, 2011 | Six Months Ended June 30, 2012 | |||||||
| Cash and Cash Equivalents, beginning of period | 34,787,935 | 14,563,517 | ||||||
| Cash generated from / (used in): | ||||||||
| Operating Activities | 24,743,408 | 7,386,684 | ||||||
| Investing Activities | 16,190,536 | (21,974,810 | ) | |||||
| Financing Activities | (55,480,942 | ) | 7,708,147 | |||||
| Net decrease in Cash and Cash Equivalents | (14,546,998 | ) | (6,879,979 | ) | ||||
| Cash and Cash Equivalents, end of period | 20,240,937 | 7,683,538 | ||||||
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Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial Information
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
Quarter Ended June 30, 2011 | Quarter Ended June 30, 2012 | |||||||
| Net (Loss) / Income | (16,777,396 | ) | 179,354 | |||||
| Plus Net Interest expense, including interest expense from interest rate swaps | 3,792,798 | 2,113,949 | ||||||
| Plus Depreciation | 8,149,765 | 4,055,752 | ||||||
| EBITDA | (4,834,833 | ) | 6,349,055 | |||||
| Adjusted EBITDA Reconciliation | ||||||||
| Net (Loss) / Income | (16,777,396 | ) | 179,354 | |||||
| Non-cash depreciation due to below market acquired time charters | 688,261 | - | ||||||
| Impairment loss | 5,000,000 | - | ||||||
| Loss on sale of vessels | 14,796,471 | - | ||||||
| Unrealized loss / (gain) from interest rate swaps | 163,074 | (509,701 | ) | |||||
Non-cash expenses from the amortization of share based compensation cost recognized and share based compensation to the management company | 1,331,946 | 797,985 | ||||||
| Adjusted Net Income | 5,202,356 | 467,638 | ||||||
| Plus Net Interest expense, including interest expense from swaps | 3,792,798 | 2,113,949 | ||||||
| Plus Depreciation, adjusted (2) | 7,461,504 | 4,055,752 | ||||||
| Adjusted EBITDA | 16,456,658 | 6,637,339 | ||||||
Six Months Ended June 30, 2011 | Six Months Ended June 30, 2012 | |||||||
| Net (Loss) / Income | (11,352,300 | ) | 899,191 | |||||
| Plus Net Interest expense, including interest expense from interest rate swaps | 7,266,802 | 4,129,751 | ||||||
| Plus Depreciation | 16,909,989 | 7,942,617 | ||||||
| EBITDA | 12,824,491 | 12,971,559 | ||||||
| Adjusted EBITDA Reconciliation | ||||||||
| Net (Loss) / Income | (11,352,300 | ) | 899,191 | |||||
| Non-cash revenue and depreciation due to below market acquired time charters | 1,368,959 | - | ||||||
| Impairment loss | 5,000,000 | - | ||||||
| Loss on sale of vessels | 14,796,471 | - | ||||||
| Unrealized gain from interest rate swaps | (771,999 | ) | (891,635 | ) | ||||
Non-cash expenses from the amortization of share based compensation cost recognized and share based compensation to the management company | 2,922,054 | 1,593,999 | ||||||
| Adjusted Net Income | 11,963,185 | 1,601,555 | ||||||
| Plus Net Interest expense, including interest expense from interest rate swaps | 7,266,802 | 4,129,751 | ||||||
| Plus Depreciation, adjusted (2) | 15,541,030 | 7,942,617 | ||||||
| Adjusted EBITDA | 34,771,017 | 13,673,923 | ||||||
| (1) | The Company considers EBITDA to represent net income plus net interest expense and depreciation and amortization. The Company's management uses EBITDA and Adjusted EBITDA as a performance measure. EBITDA and Adjusted EBITDA are not items recognized by U.S. GAAP and should not be considered as an alternative to net income, operating income or any other indicator of a Company's operating performance required by U.S. GAAP. The Company's definition of EBITDA and Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries. The Company believes that EBITDA is useful to investors because the shipping industry is capital intensive and may involve significant financing costs. The Company excluded non-cash items to derive the adjusted net income and the adjusted EBITDA because the Company believes that these adjustments provide additional information on the fleet operational results. |
| (2) | Excludes a portion of depreciation charged on purchase price adjustment allocated to vessel cost for vessels acquired with below market charters. |
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Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial Information
Net Income and Adjusted Net Income Reconciliation
(Expressed in United States Dollars)
| U.S. GAAP Financial Information | Quarter Ended June 30, 2011 | Quarter Ended June 30, 2012 | ||||||
| Net (Loss) / Income | (16,777,396 | ) | 179,354 | |||||
| Net (Loss) / Income attributable to non-vested share awards | (448,597 | ) | 5,252 | |||||
| Net (Loss) / Income available to common shareholders | (16,328,799 | ) | 174,102 | |||||
| Weighted average number of common shares basic and diluted | 58,254,929 | 59,208,321 | ||||||
| (Loss) / Earnings per common share basic and diluted | (0.280 | ) | 0.003 | |||||
| Reconciliation of Net (Loss) / Income to Adjusted Net Income | ||||||||
| Net (Loss) / Income | (16,777,396 | ) | 179,354 | |||||
| Non-cash depreciation due to below market acquired time charters | 688,261 | - | ||||||
| Impairment loss | 5,000,000 | - | ||||||
| Loss on sale of vessels | 14,796,471 | - | ||||||
| Unrealized loss / (gain) from interest rate swaps | 163,074 | (509,701 | ) | |||||
| Non-cash expenses from the amortization of compensation cost recognized and share based compensation to the management company | 1,331,946 | 797,985 | ||||||
| Adjusted Net Income(1) | 5,202,356 | 467,638 | ||||||
| Adjusted Net Income attributable to non-vested share awards | 139,101 | 13,694 | ||||||
| Adjusted Net Income available to common shareholders | 5,063,255 | 453,944 | ||||||
| Weighted average number of common shares basic and diluted | 58,254,929 | 59,208,321 | ||||||
| Adjusted earnings per common share basic and diluted(1) | 0.087 | 0.008 | ||||||
| (1) | Adjusted Net Income and Adjusted earnings per share are not items recognized by U.S. GAAP and should not be considered as alternatives to Net Income and Earnings per share, respectively, or any other indicator of a Company's operating performance required by U.S. GAAP. The Company excluded non-cash items to derive at the Adjusted Net Income and the Adjusted earnings per share basic and diluted because the Company believes that these adjustments provide additional information on the fleet operational results. The Company's definition of Adjusted Net Income and Adjusted earnings per share may not be the same as that used by other companies in the shipping or other industries. |
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Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial Information
Net Income and Adjusted Net Income Reconciliation
(Expressed in United States Dollars)
| U.S. GAAP Financial Information | Six Months Ended June 30, 2011 | Six Months Ended June 30, 2012 | ||||||
| Net (Loss) / Income | (11,352,300 | ) | 899,191 | |||||
| Net (Loss) / Income attributable to non-vested share awards | (339,793 | ) | 27,295 | |||||
| Net (Loss) / Income available to common shareholders | (11,012,507 | ) | 871,896 | |||||
| Weighted average number of common shares basic and diluted | 57,276,048 | 59,131,947 | ||||||
| (Loss) / Earnings per common share basic and diluted | (0.192 | ) | 0.015 | |||||
| Reconciliation of Net (Loss) / Income to Adjusted Net Income | ||||||||
| Net (Loss) / Income | (11,352,300 | ) | 899,191 | |||||
| Non-cash depreciation due to below market acquired time charters | 1,368,959 | - | ||||||
| Impairment loss | 5,000,000 | - | ||||||
| Loss on sale of vessels | 14,796,471 | - | ||||||
| Unrealized gain from interest rate swaps | (771,999 | ) | (891,635 | ) | ||||
| Non-cash expenses from the amortization of compensation cost recognized and share based compensation to the management company | 2,922,054 | 1,593,999 | ||||||
| Adjusted Net Income(1) | 11,963,185 | 1,601,555 | ||||||
| Adjusted Net Income attributable to non-vested share awards | 358,078 | 48,615 | ||||||
| Adjusted Net Income available to common shareholders | 11,605,107 | 1,552,940 | ||||||
| Weighted average number of common shares basic and diluted | 57,276,048 | 59,131,947 | ||||||
| Adjusted earnings per common share basic and diluted(1) | 0.203 | 0.026 | ||||||
| (1) | Adjusted Net Income and Adjusted earnings per share are not items recognized by U.S. GAAP and should not be considered as alternatives to Net Income and Earnings per share, respectively, or any other indicator of a Company's operating performance required by U.S. GAAP. The Company excluded non-cash items to derive at the Adjusted Net Income and the Adjusted earnings per share basic and diluted because the Company believes that these adjustments provide additional information on the fleet operational results. The Company's definition of Adjusted Net Income and Adjusted earnings per share may not be the same as that used by other companies in the shipping or other industries. |
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Paragon Shipping Inc. Unaudited Condensed Consolidated Balance Sheets As of December 31, 2011 and June 30, 2012 (Expressed in United States Dollars) | ||||||||
| December 31, 2011 | June 30, 2012 | |||||||
| Assets | ||||||||
| Cash and restricted cash (current and non-current) | 39,563,517 | 23,703,538 | ||||||
| Loan to affiliate | - | 15,000,000 | ||||||
| Other current assets | 4,029,047 | 7,253,975 | ||||||
| Vessels, net | 268,608,363 | 306,679,466 | ||||||
| Advances for vessel acquisitions and vessels under construction | 63,450,706 | 48,555,608 | ||||||
| Other fixed assets, net | 510,042 | 553,444 | ||||||
| Investment in affiliate | 38,805,802 | 38,099,803 | ||||||
| Loan to affiliate | 15,000,000 | - | ||||||
| Other non-current assets | 2,106,460 | 1,970,679 | ||||||
| Total Assets | 432,073,937 | 441,816,513 | ||||||
| Liabilities and Shareholders' Equity | ||||||||
| Total debt | 201,285,000 | 209,079,938 | ||||||
| Total other liabilities | 9,564,790 | 10,150,899 | ||||||
| Total shareholders' equity | 221,224,147 | 222,585,676 | ||||||
| Total Liabilities and Shareholders' Equity | 432,073,937 | 441,816,513 | ||||||
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Paragon Shipping Inc. Unaudited Condensed Consolidated Statements of Income For the three months ended June 30, 2011 and 2012 (Expressed in United States Dollars - except for share data) | ||||||||
| Three Months Ended | Three Months Ended | |||||||
| June 30, 2011 | June 30, 2012 | |||||||
| Revenue | ||||||||
| Time charter revenue | 25,093,684 | 12,662,352 | ||||||
| Commissions | (1,446,044 | ) | (712,826 | ) | ||||
| Net Revenue | 23,647,640 | 11,949,526 | ||||||
| Expenses / (Income) | ||||||||
| Voyage expenses | 156,813 | 380,126 | ||||||
| Vessels operating expenses | 4,642,320 | 4,528,533 | ||||||
| Dry-docking expenses | 1,059,004 | - | ||||||
| Management fees - related party | 1,236,325 | 979,002 | ||||||
| Depreciation | 8,149,765 | 4,055,752 | ||||||
| General and administrative expenses | 2,723,984 | 2,029,736 | ||||||
| Impairment loss | 5,000,000 | - | ||||||
| Bad debt provisions | 84,718 | - | ||||||
| Loss on sale of assets | 14,796,471 | - | ||||||
| Gain from vessel early redelivery | (913,165 | ) | - | |||||
| Gain from marketable securities | - | (1,394,665 | ) | |||||
| Operating (Loss) / Income | (13,288,595 | ) | 1,371,042 | |||||
| Other Income / (Expenses) | ||||||||
| Interest and finance costs | (2,939,070 | ) | (1,569,311 | ) | ||||
| Loss on derivatives, net | (1,221,796 | ) | (217,813 | ) | ||||
| Interest income | 204,994 | 182,876 | ||||||
| Equity in net income of affiliate | 482,290 | 375,170 | ||||||
| Foreign currency (loss) / gain | (15,219 | ) | 37,390 | |||||
| Total Other Expenses, net | (3,488,801 | ) | (1,191,688 | ) | ||||
| Net (Loss) / Income | (16,777,396 | ) | 179,354 | |||||
| Other Comprehensive Loss | ||||||||
| Unrealized loss on cash flow hedges | - | (323,755 | ) | |||||
| Unrealized loss on change in fair value of marketable securities | - | (707,304 | ) | |||||
| Total Other Comprehensive Loss | - | (1,031,059 | ) | |||||
| Comprehensive Loss | (16,777,396 | ) | (851,705 | ) | ||||
| (Loss) / Earnings per Class A common share, basic and diluted | $ | (0.280 | ) | $ | 0.003 | |||
| Weighted average number of Class A common shares, basic and diluted | 58,254,929 | 59,208,321 | ||||||
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Paragon Shipping Inc. Unaudited Condensed Consolidated Statements of Income For the six months ended June 30, 2011 and 2012 (Expressed in United States Dollars) | ||||||||
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2011 | June 30, 2012 | |||||||
| Revenue | ||||||||
| Time charter revenue | 54,113,203 | 25,856,283 | ||||||
| Commissions | (2,976,400 | ) | (1,429,571 | ) | ||||
| Net Revenue | 51,136,803 | 24,426,712 | ||||||
| Expenses / (Income) | ||||||||
| Voyage expenses | 396,860 | 679,815 | ||||||
| Vessels operating expenses | 10,058,394 | 8,275,017 | ||||||
| Dry-docking expenses | 1,810,061 | - | ||||||
| Management fees - related party | 2,611,938 | 1,922,177 | ||||||
| Depreciation | 16,909,989 | 7,942,617 | ||||||
| General and administrative expenses | 5,553,539 | 4,215,789 | ||||||
| Impairment loss | 5,000,000 | - | ||||||
| Bad debt provisions | 252,392 | - | ||||||
| Loss on sale of assets | 14,796,471 | - | ||||||
| Gain from vessel early redelivery | (913,165 | ) | - | |||||
| Gain from marketable securities | - | (1,394,665 | ) | |||||
| Operating (Loss) / Income | (5,339,676 | ) | 2,785,962 | |||||
| Other Income / (Expenses) | ||||||||
| Interest and finance costs | (5,339,852 | ) | (3,097,870 | ) | ||||
| Loss on derivatives, net | (1,400,573 | ) | (517,707 | ) | ||||
| Interest income | 245,622 | 377,461 | ||||||
| Equity in net income of affiliate | 482,290 | 1,356,501 | ||||||
| Foreign currency loss | (111 | ) | (5,156 | ) | ||||
| Total Other Expenses, net | (6,012,624 | ) | (1,886,771 | ) | ||||
| Net (Loss) / Income | (11,352,300 | ) | 899,191 | |||||
| Other Comprehensive Loss | ||||||||
| Unrealized loss on cash flow hedges | - | (404,799 | ) | |||||
| Unrealized loss on change in fair value of marketable securities | - | (707,304 | ) | |||||
| Total Other Comprehensive Loss | - | (1,112,103 | ) | |||||
| Comprehensive Loss | (11,352,300 | ) | (212,912 | ) | ||||
| (Loss) / Earnings per Class A common share, basic and diluted | $ | (0.192 | ) | $ | 0.015 | |||
| Weighted average number of Class A common shares, basic and diluted | 57,276,048 | 59,131,947 | ||||||
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