Euroseas(ESEA) - 2025 Q1 - Quarterly Report

Euroseas Ltd. Q1 2025 Earnings Release First Quarter 2025 Financial Highlights Euroseas reported strong Q1 2025 financial results, with increased revenues and net income, a declared dividend, and continued share repurchases Q1 2025 Key Financial Metrics | Metric | Value ($) | Per Share (Basic) ($) | Per Share (Diluted) ($) | | :--- | :--- | :--- | :--- | | Total Net Revenues | 56.3 million | N/A | N/A | | Net Income | 36.9 million | 5.31 | 5.29 | | Adjusted Net Income | 26.2 million | 3.76 | 3.76 | | Adjusted EBITDA | 37.1 million | N/A | N/A | | Quarterly Dividend | 0.65 per share | N/A | N/A | - The company operated an average of 23.71 vessels during Q1 2025, achieving an average time charter equivalent (TCE) rate of $27,563 per day[10] - Completed the spin-off of three subsidiaries, including two older vessels, into the independently operating Euroholdings Ltd. (NASDAQ: EHLD) on March 17, 2025[10] - Agreed to sell the M/V Marcos V for $50 million, with delivery in October 2025, expecting a gain exceeding $8.50 million, or $1.20 per share[10] - Since May 2022, the company has repurchased 463,074 common shares for approximately $10.5 million under its $20 million share repurchase plan[10] Management Commentary Management highlighted continued strength in the containership market, securing high charter coverage, while focusing on fleet modernization and shareholder returns - CEO Commentary: The containership market showed further strength in Q1 2025, with notable rate increases in smaller and larger feeder segments. The company has secured almost 100% charter coverage for 2025 and over 65% for 2026[12] - CEO Outlook: Key challenges include the high overall orderbook and potential Suez Canal transits resuming. However, fundamentals for feeder and intermediate containerships remain favorable due to historically low orderbooks and an older fleet profile in these segments[13] - CEO Strategy: The company is modernizing its fleet, having transferred its two oldest ships to the Euroholdings spin-off. It maintains a $0.65 quarterly dividend and continues its share buyback program due to shares trading at a discount to NAV[14] - CFO Commentary: Q1 2025 revenues increased by approximately 20% YoY, driven by a larger fleet (average of 23.68 vessels vs. 19.60 in Q1 2024)[14] - CFO Commentary: Total daily vessel operating expenses decreased to $6,676 in Q1 2025 from $7,276 in Q1 2024, attributed to the lower operating costs of newbuild vessels[15] - CFO Commentary: As of March 31, 2025, the company had $244.0 million in outstanding bank debt and approximately $95.5 million in cash. Scheduled debt repayments for the next 12 months are about $30.7 million[16] First Quarter 2025 Financial Results Q1 2025 net revenues grew 20.6% to $56.3 million, with net income significantly increasing to $36.9 million, driven by fleet expansion and higher interest costs Q1 2025 vs Q1 2024 Performance | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenues ($M) | 56.3 | 46.7 | +20.6% | | Net Income ($M) | 36.9 | 20.0 | +84.5% | | Adjusted EBITDA ($M) | 37.1 | 24.6 | +50.8% | | Average Vessels (count) | 23.68 | 19.60 | +4.08 vessels | | TCE Rate ($/day) | 27,563 | 27,806 | -0.9% | | Basic EPS ($) | 5.31 | 2.89 | +83.7% | | Adjusted Basic EPS ($) | 3.76 | 2.67 | +40.8% | - Vessel operating expenses rose to $12.3 million from $11.4 million in Q1 2024, due to the larger fleet size[19] - Depreciation expense increased to $8.0 million from $5.4 million in Q1 2024, also due to the increased number of vessels[19] - Interest and other financing costs increased to $3.9 million in Q1 2025 from $1.8 million in Q1 2024, reflecting a higher amount of debt[22] Fleet Profile and Employment As of June 18, 2025, Euroseas' fleet comprises 22 operating container carriers totaling 67,494 TEU, with two additional vessels under construction and one vessel scheduled for sale Fleet Composition (as of June 18, 2025) | Vessel Category | Count (vessels) | Total DWT | Total TEU | | :--- | :--- | :--- | :--- | | Operating Fleet | | | | | Intermediate Carriers | 7 | - | - | | Feeder Carriers | 15 | - | - | | Total Operating | 22 | 859,330 | 67,494 | | Vessels Under Construction | | | | | Intermediate Carriers | 2 | 110,400 | 8,600 | | Total Future Fleet | 24 | 969,730 | 76,094 | - The vessel M/V Marcos V has been sold and is scheduled for delivery to the buyer in October 2025[27] - The company has two 4,300 TEU Intermediate newbuildings scheduled for delivery in the fourth quarter of 2027[26][57] Summary Fleet Data and Operational Metrics In Q1 2025, average vessels increased to 23.68, with high 99.2% fleet utilization and stable TCE rates, while daily vessel operating expenses decreased to $6,676 due to newer vessels Q1 2025 vs Q1 2024 Operational Data | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Average number of vessels (count) | 23.68 | 19.60 | | Available days for fleet (days) | 2,111.2 | 1,705.4 | | Fleet utilization (%) | 99.2% | 99.7% | | Time charter equivalent rate (TCE) ($/day) | 27,563 | 27,806 | | Vessel operating expenses (daily) ($/day) | 6,676 | 7,267 | | General and administrative expenses (daily) ($/day) | 835 | 696 | Financial Statements The unaudited consolidated financial statements for Q1 2025 detail strong financial performance, with increased net income, growth in assets and liabilities, and robust cash flow from operations Consolidated Condensed Statements of Operations For Q1 2025, net revenues reached $56.3 million, with operating income surging to $40.5 million due to a vessel sale gain, resulting in $36.9 million net income and $5.31 basic EPS Unaudited Consolidated Condensed Statements of Operations (in USD) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net revenues | 56,346,095 | 46,718,374 | | Total operating expenses, net | 15,861,892 | 26,328,438 | | Operating income | 40,484,203 | 20,389,936 | | Net income | 36,914,994 | 20,002,174 | | Earnings per share, basic | $5.31 | $2.89 | Consolidated Condensed Balance Sheets As of March 31, 2025, total assets grew to $648.8 million, driven by increased vessel value, while total liabilities rose to $271.5 million due to higher long-term debt, and shareholders' equity reached $377.3 million Consolidated Condensed Balance Sheet Highlights (in USD) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 88,333,158 | 73,739,504 | | Vessels, net | 524,227,256 | 443,386,898 | | Total Assets | 648,753,118 | 591,218,957 | | Liabilities & Equity | | | | Long-term debt, current portion | 30,301,932 | 36,930,532 | | Long-term debt, net of current | 211,541,840 | 168,473,386 | | Total Liabilities | 271,493,939 | 228,269,125 | | Total Shareholders' Equity | 377,259,179 | 362,949,832 | Consolidated Condensed Statements of Cash Flows In Q1 2025, net cash from operating activities was strong at $41.2 million, with $43.8 million used in investing, and $17.5 million provided by financing, leading to a $14.9 million increase in total cash to $95.5 million Consolidated Condensed Statement of Cash Flows Highlights (in USD) | Cash Flow Category | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash provided by operating activities | 41,225,366 | | Net cash used in investing activities | (43,804,649) | | Net cash provided by financing activities | 17,457,459 | | Net increase in cash | 14,878,176 | | Cash at end of period | 95,544,503 | Reconciliation of Non-GAAP Financial Measures The company provides reconciliations for non-GAAP measures, with Q1 2025 Adjusted EBITDA at $37.1 million and Adjusted Net Income at $26.2 million, derived by adjusting GAAP net income for specific non-cash and non-recurring items Reconciliation of Adjusted EBITDA to Net Income Adjusted EBITDA for Q1 2025 was $37.1 million, up from $24.6 million in Q1 2024, reconciled from net income by adjusting for interest, depreciation, derivative gains/losses, vessel sale gains, and time charter amortization Adjusted EBITDA Reconciliation (in USD) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | 36,914,994 | 20,002,174 | | Interest and other financing costs, net | 3,397,850 | 1,252,760 | | Vessel depreciation | 8,045,067 | 5,441,337 | | Gain on sale of vessel | (10,230,210) | - | | (Gain) / loss on interest rate swap | 173,386 | (863,006) | | Amortization of below market time charters | (1,218,240) | (1,231,776) | | Adjusted EBITDA | 37,082,847 | 24,601,489 | Reconciliation of Adjusted Net Income to Net Income Adjusted Net Income for Q1 2025 was $26.2 million (Adjusted EPS of $3.76), compared to $18.5 million in Q1 2024, primarily adjusted for vessel sale gains and unrealized derivative impacts Adjusted Net Income Reconciliation (in USD) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | 36,914,994 | 20,002,174 | | Unrealized (gain) / loss on derivative | 238,431 | (763,350) | | Gain on sale of vessel | (10,230,210) | - | | Other adjustments | (729,928) | (734,714) | | Adjusted net income | 26,193,287 | 18,504,110 | | Adjusted earnings per share, basic | $3.76 | $2.67 |