Euroseas(ESEA) - 2025 Q2 - Quarterly Report

Corporate Information & Filing Details This section provides details on the SEC filing, company overview, and fleet profile of Euroseas Ltd SEC Filing Information This section details the SEC filing, identifying the document as a Form 6-K report for August 2025 by Euroseas Ltd., incorporating a press release regarding its Q2 and H1 2025 results - Report is a Form 6-K for August 2025, filed by Euroseas Ltd. (Commission File Number: 001-33283)[1][2] - It includes a press release issued on August 13, 2025, reporting results for the six-month period and quarter ended June 30, 2025[4][10] Company Overview Euroseas Ltd. is a Marshall Islands-registered owner and operator of container carrier vessels, trading on NASDAQ under ESEA, managing its fleet through Eurobulk Ltd - Euroseas Ltd. (NASDAQ: ESEA) is a container carrier vessel owner and operator, managed by Eurobulk Ltd[10][72][73] Euroseas Ltd. Fleet Profile (as of August 13, 2025) | Metric | Current Fleet | Future Fleet (by Q4 2027) | | :----- | :------------ | :-------------------------- | | Number of Vessels | 22 | 24 | | Feeder Containerships | 15 | - | | Intermediate Containerships | 7 | - | | Total Cargo Capacity (TEU) | 67,494 | 76,094 | Financial Highlights This section presents key financial performance metrics for Euroseas Ltd. for the second quarter and first half of 2025 Second Quarter 2025 Financial Highlights Euroseas Ltd. reported total net revenues of $57.2 million and net income of $29.9 million for Q2 2025, with an Adjusted EBITDA of $39.3 million Second Quarter 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Total Net Revenues | $57.2 million | $58.7 million | -2.5% | | Net Income | $29.9 million | $40.7 million | -26.5% | | Basic EPS | $4.32 | $5.89 | -26.7% | | Diluted EPS | $4.29 | $5.84 | -26.5% | | Adjusted Net Income | $29.2 million | $34.3 million | -14.8% | | Adjusted Basic EPS | $4.23 | $4.95 | -14.6% | | Adjusted Diluted EPS | $4.20 | $4.92 | -14.6% | | Adjusted EBITDA | $39.3 million | $42.3 million | -7.1% | | Average Vessels Operated | 22.0 | 21.26 | +3.5% | | Average TCE Rate | $29,420/day | $31,639/day | -7.0% | | Quarterly Dividend per Share | $0.70 | $0.65 (implied from $0.05 increase) | +7.7% | - The company repurchased 463,074 common shares for approximately $10.5 million since May 2022, as part of a $20 million share repurchase plan[14] - Published its 2024 Sustainability/ESG Report[14] First Half 2025 Financial Highlights For the first half of 2025, Euroseas Ltd. reported total net revenues of $113.6 million and net income of $66.8 million, with an Adjusted EBITDA of $76.4 million First Half 2025 Financial Highlights | Metric | H1 2025 | H1 2024 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Total Net Revenues | $113.6 million | $105.4 million | +7.7% | | Net Income | $66.8 million | $60.8 million | +9.9% | | Basic EPS | $9.63 | $8.77 | +9.8% | | Diluted EPS | $9.60 | $8.71 | +10.2% | | Adjusted Net Income | $55.4 million | $52.8 million | +4.9% | | Adjusted Basic EPS | $7.99 | $7.63 | +4.7% | | Adjusted Diluted EPS | $7.97 | $7.57 | +5.3% | | Adjusted EBITDA | $76.4 million | $66.9 million | +14.2% | | Average Vessels Operated | 22.83 | 20.43 | +11.7% | | Average TCE Rate | $28,468/day | $29,836/day | -4.7% | Management Commentary This section provides insights from the Chairman, CEO, and CFO on market conditions, company performance, and financial position Chairman and CEO Comments The CEO highlighted the strong containership market in Q2 2025, the company's profitability, strategic fleet positioning, and commitment to shareholder returns - Containership market continued upward climb in Q2 2025, exceeding 2024 peak levels, primarily due to lack of vessels[15] - Company achieved one of its best quarterly results in five years (adjusted EPS) due to highly profitable charter rates and almost 90% charter coverage for the next 12 months[15] - Anticipates potential rate pressures in late 2026/2027 due to overall supply growth (30% orderbook), but sees an advantage in feeder and intermediate segments (where Euroseas operates) due to low orderbook and aged fleet profile[16] - Committed to fleet modernization, accretive investments, and shareholder returns; increased quarterly dividend by $0.05 to $0.70 per share and continues share buyback program[17] Chief Financial Officer Comments The CFO detailed Q2 2025 revenue and expense changes, attributing shifts to TCE rates, operating costs, and administrative expenses, while outlining debt and cash positions - Q2 2025 revenues slightly lower than Q2 2024 due to a 7.0% decrease in average TCE rate, despite more vessels[17] - Daily vessel operating expenses increased to $6,700/day (from $6,612/day in Q2 2024) due to falling USD value and inflation adjustment to daily vessel management fee (810 Euros to 840 Euros)[18] - General and administrative expenses increased to $694/day (from $581/day in Q2 2024) due to higher professional fees and stock incentive plan costs[19] Key Financial Metrics (CFO Commentary) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Net Revenues | $57.3 million | $58.7 million | -2.4% | | Adjusted EBITDA | $39.3 million | $42.3 million | -7.1% | | Outstanding Debt (as of Jun 30, 2025) | $229.4 million | - | - | | Cash (as of Jun 30, 2025) | $112.7 million | - | - | | Scheduled Debt Repayments (next 12 months) | $21.2 million | - | - | Detailed Financial Results This section provides a comprehensive breakdown of Euroseas Ltd.'s financial performance for the second quarter and first half of 2025 Second Quarter 2025 Detailed Results Q2 2025 results show decreased net revenues and net income, influenced by lower time charter rates and the absence of a vessel sale gain, alongside increased operating and interest expenses Revenue and Net Income This subsection details the revenue and net income performance for Q2 2025, including average vessels operated and TCE rates Q2 2025 Revenue and Net Income | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Total Net Revenues | $57.2 million | $58.7 million | -2.5% | | Net Income | $29.9 million | $40.7 million | -26.5% | | Average Vessels Operated | 22.0 | 21.26 | +3.5% | | Average TCE Rate | $29,420/day | $31,639/day | -7.0% | Operating Expenses This subsection outlines the various operating expenses incurred during Q2 2025, including voyage, vessel operating, depreciation, and administrative costs Q2 2025 Operating Expenses | Expense Category | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Voyage Expenses, net | $0.3 million | -$0.3 million (gain) | N/A | | Vessel Operating Expenses | $11.5 million | $11.1 million | +3.6% | | Depreciation Expense | $7.3 million | $6.8 million | +7.4% | | Related Party Management Fees | $1.9 million | $1.7 million | +11.8% | | General & Administrative Expenses | $1.4 million | $1.1 million | +27.3% | | Drydocking Costs | $1.7 million | $1.6 million | +6.3% | Other Expenses and Income This subsection presents other financial items for Q2 2025, including interest costs, capitalized interest, derivative gains/losses, and vessel sale gains Q2 2025 Other Expenses and Income | Category | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Interest & Other Financing Costs | $4.0 million | $2.1 million | +90.5% | | Capitalized Interest (newbuilding) | Nil | $1.4 million | -100% | | Net Gain/(Loss) on Derivative | -$0.06 million (loss) | $0.12 million (gain) | N/A | | Gain on Sale of Vessel | Nil | $5.7 million | -100% | Earnings Per Share This subsection provides basic, diluted, and adjusted earnings per share figures for Q2 2025 Q2 2025 Earnings Per Share | EPS Type | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Basic EPS | $4.32 | $5.89 | -26.7% | | Diluted EPS | $4.29 | $5.84 | -26.5% | | Adjusted Basic EPS | $4.23 | $4.95 | -14.6% | | Adjusted Diluted EPS | $4.20 | $4.92 | -14.6% | First Half 2025 Detailed Results H1 2025 results show increased net revenues and net income, driven by fleet expansion and a vessel sale gain, with varied changes in operating and interest expenses Revenue and Net Income This subsection details the revenue and net income performance for H1 2025, including average vessels operated and TCE rates H1 2025 Revenue and Net Income | Metric | H1 2025 | H1 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Total Net Revenues | $113.6 million | $105.4 million | +7.7% | | Net Income | $66.8 million | $60.8 million | +9.9% | | Average Vessels Operated | 22.83 | 20.43 | +11.7% | | Average TCE Rate | $28,468/day | $29,836/day | -4.7% | Operating Expenses This subsection outlines the various operating expenses incurred during H1 2025, including voyage, vessel operating, depreciation, and administrative costs H1 2025 Operating Expenses | Expense Category | H1 2025 | H1 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Voyage Expenses, net | $0.5 million | $0.8 million | -37.5% | | Vessel Operating Expenses | $23.7 million | $22.5 million | +5.3% | | Depreciation Expense | $15.3 million | $12.3 million | +24.4% | | Related Party Management Fees | $3.9 million | $3.3 million | +18.2% | | General & Administrative Expenses | $3.2 million | $2.4 million | +33.3% | | Drydocking Costs | $3.5 million | $7.2 million | -51.4% | | Gain on Sale of Vessel | $10.2 million | $5.7 million | +78.9% | Other Expenses and Income This subsection presents other financial items for H1 2025, including interest costs, capitalized interest, derivative gains/losses, and Adjusted EBITDA H1 2025 Other Expenses and Income | Category | H1 2025 | H1 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Interest & Other Financing Costs | $7.9 million | $3.9 million | +102.6% | | Capitalized Interest (newbuilding) | $0.1 million | $2.7 million | -96.3% | | Net Gain/(Loss) on Derivative | -$0.2 million (loss) | $1.0 million (gain) | N/A | | Adjusted EBITDA | $76.4 million | $66.9 million | +14.2% | Earnings Per Share This subsection provides basic, diluted, and adjusted earnings per share figures for H1 2025 H1 2025 Earnings Per Share | EPS Type | H1 2025 | H1 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Basic EPS | $9.63 | $8.77 | +9.8% | | Diluted EPS | $9.60 | $8.71 | +10.2% | | Adjusted Basic EPS | $7.99 | $7.63 | +4.7% | | Adjusted Diluted EPS | $7.97 | $7.57 | +5.3% | Fleet Information This section provides a detailed overview of Euroseas Ltd.'s current and future fleet, including operational data and key performance indicator definitions Fleet Profile As of August 13, 2025, Euroseas Ltd. operates 22 container carriers with plans to expand to 24 by Q4 2027, with most vessels under time charter agreements Euroseas Ltd. Fleet Profile (as of August 13, 2025) | Category | Number of Vessels | Dwt | TEU | | :------------------------ | :---------------- | :-------- | :-------- | | Container Carriers (on water) | 22 | 859,330 | 67,494 | | Intermediate | 7 | - | - | | Feeder | 15 | - | - | | Vessels under construction | 2 | 110,400 | 8,600 | | Total (current + under construction) | 24 | 969,730 | 76,094 | - Vessels under construction (ELENA, NIKITAS G) are Intermediate type, 55,200 Dwt, 4,300 TEU each, to be delivered in Q4 2027[42] - Most vessels are under time charter (TC) agreements, with rates ranging from $15,000 to $48,000 per day[42] Summary Fleet Data & Definitions This section presents detailed fleet operational data for Q2 and H1 2025, along with definitions for key performance indicators like TCE rate and fleet utilization Summary Fleet Data | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | | Average number of vessels | 22.00 | 21.26 | 22.83 | 20.43 | | Calendar days for fleet | 2,002.0 | 1,936.0 | 4,133.0 | 3,720.0 | | Scheduled off-hire days | 10.0 | 20.7 | 29.8 | 99.3 | | Available days for fleet | 1,992.0 | 1,915.3 | 4,103.2 | 3,620.7 | | Voyage days for fleet | 1,990.1 | 1,913.6 | 4,085.3 | 3,613.1 | | Fleet utilization | 99.9% | 99.9% | 99.6% | 99.8% | | Time charter equivalent rate ($/day) | 29,420 | 31,639 | 28,468 | 29,836 | | Vessel operating expenses excl. drydocking ($/day) | 6,700 | 6,612 | 6,688 | 6,926 | | General and administrative expenses ($/day) | 694 | 581 | 766 | 637 | | Drydocking expenses ($/day) | 826 | 819 | 838 | 1,943 | - TCE (Time Charter Equivalent) rate is a non-GAAP measure of average daily net revenue performance, calculated by dividing net time/voyage charter revenue by voyage days[53] - Fleet utilization measures efficiency in finding employment and minimizing off-hire days, calculated as voyage days divided by available days[50] Financial Statements This section presents the unaudited consolidated condensed statements of operations, balance sheets, and cash flows for Euroseas Ltd Unaudited Consolidated Condensed Statements of Operations The statements show Q2 2025 net income decreased to $29.9 million, while H1 2025 net income increased to $66.8 million, reflecting varied revenue and expense trends Consolidated Condensed Statements of Operations Summary | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :---------- | :---------- | | Net Revenues | $57,233,719 | $58,724,586 | $113,579,814 | $105,442,960 | | Operating Income | $33,378,481 | $42,337,326 | $73,862,684 | $62,727,262 | | Net Income | $29,861,518 | $40,748,559 | $66,776,511 | $60,750,732 | | Basic EPS | $4.32 | $5.89 | $9.63 | $8.77 | | Diluted EPS | $4.29 | $5.84 | $9.60 | $8.71 | - Q2 2025 operating income decreased to $33.4 million from $42.3 million in Q2 2024, while H1 2025 operating income increased to $73.9 million from $62.7 million in H1 2024[63] Unaudited Consolidated Condensed Balance Sheets As of June 30, 2025, total assets increased to $662.1 million, driven by higher cash and vessels, with corresponding increases in total liabilities and shareholders' equity Consolidated Condensed Balance Sheets Summary | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :------- | | Total Current Assets | $160,431,358 | $84,706,760 | +89.4% | | Cash and cash equivalents | $100,506,369 | $73,739,504 | +36.3% | | Vessels, net | $477,285,311 | $443,386,898 | +7.6% | | Total Assets | $662,108,899 | $591,218,957 | +11.9% | | Total Current Liabilities | $50,020,482 | $57,169,609 | -12.5% | | Long-term debt, current portion | $20,848,844 | $36,930,532 | -43.6% | | Total Long-term Liabilities | $209,108,379 | $171,099,516 | +22.2% | | Total Liabilities | $259,128,861 | $228,269,125 | +13.5% | | Total Shareholders' Equity | $402,980,038 | $362,949,832 | +11.0% | Unaudited Consolidated Condensed Statements of Cash Flows H1 2025 saw increased cash from operations, significantly reduced cash used in investing, and decreased cash from financing, leading to a substantial increase in cash and equivalents Consolidated Condensed Statements of Cash Flows Summary | Cash Flow Category | H1 2025 | H1 2024 | Change | | :-------------------------------- | :---------- | :---------- | :------- | | Net cash provided by operating activities | $68,458,904 | $59,396,331 | +15.3% | | Net cash used in investing activities | ($39,176,562) | ($114,922,837) | -65.9% | | Net cash provided by financing activities | $2,732,906 | $67,523,299 | -95.9% | | Net increase in cash, cash equivalents and restricted cash | $32,015,248 | $11,996,793 | +166.9% | | Cash, cash equivalents and restricted cash at end of period | $112,681,575 | $76,313,091 | +47.6% | - Cash paid for vessels under construction decreased from $122.0 million in H1 2024 to $56.6 million in H1 2025[65] - Proceeds from long-term debt decreased from $94.0 million in H1 2024 to $52.0 million in H1 2025[65] Non-GAAP Reconciliations This section provides reconciliations for non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS, to their GAAP equivalents Adjusted EBITDA Reconciliation This section reconciles Adjusted EBITDA to Net Income, detailing adjustments for interest, depreciation, derivative gains/losses, vessel sales, and amortization of time charters Adjusted EBITDA Reconciliation | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :---------- | :---------- | | Net Income | $29,861,518 | $40,748,559 | $66,776,511 | $60,750,732 | | Interest & other financing costs, net | $3,374,826 | $1,722,793 | $6,772,677 | $2,975,554 | | Vessel depreciation | $7,258,954 | $6,820,674 | $15,304,021 | $12,262,011 | | Gain on sale of vessel | - | ($5,690,794) | ($10,230,210) | ($5,690,794) | | Net (Gain)/Loss on derivative | $56,548 | ($117,701) | $229,934 | ($980,707) | | Amortization of below market time charters acquired | ($1,231,776) | ($1,231,776) | ($2,450,015) | ($2,463,552) | | Adjusted EBITDA | $39,320,070 | $42,251,755 | $76,402,918 | $66,853,244 | - Adjusted EBITDA is a non-GAAP measure used to assess financial performance by excluding financial costs, derivative gains/losses, vessel sale gains, depreciation, and amortization of below market time charters[68] Adjusted Net Income and EPS Reconciliation This section reconciles Adjusted Net Income and Adjusted EPS to their GAAP equivalents. Adjusted Net Income for Q2 2025 was $29.2 million (vs. $34.3 million in Q2 2024), and for H1 2025 it was $55.4 million (vs. $52.8 million in H1 2024) Adjusted Net Income and EPS Reconciliation | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :---------- | :---------- | | Net Income | $29,861,518 | $40,748,559 | $66,776,511 | $60,750,732 | | Unrealized (gain)/loss on derivative | $103,653 | ($19,679) | $342,084 | ($783,029) | | Amortization of below market time charters acquired | ($1,231,776) | ($1,231,776) | ($2,450,015) | ($2,463,552) | | Gain on sale of vessel | - | ($5,690,794) | ($10,230,210) | ($5,690,794) | | Vessel depreciation on portion of consideration of vessels acquired with attached time charters allocated to below market time charters | $497,062 | $497,062 | $994,124 | $994,124 | | Adjusted Net Income | $29,230,457 | $34,303,372 | $55,432,494 | $52,807,481 | | Adjusted Basic EPS | $4.23 | $4.95 | $7.99 | $7.63 | | Adjusted Diluted EPS | $4.20 | $4.92 | $7.97 | $7.57 | - Adjusted Net Income and Adjusted EPS are non-GAAP measures that exclude unrealized derivative gains/losses, vessel sale gains, amortization of below market time charters, and specific vessel depreciation to enhance comparability of fundamental performance[70][71] Additional Information This section includes details on the conference call, forward-looking statements disclaimer, and company contact information Conference Call and Webcast Euroseas Ltd. hosted a conference call and webcast on August 13, 2025, to discuss Q2 and H1 2025 results, with participation details provided - Conference call and webcast held on August 13, 2025, at 9:00 a.m. ET to discuss results[58] - Participants could dial in or use a "call me" option; slides were available in PDF format on the company's website[59][60][61][62] Forward-Looking Statements This section contains a standard disclaimer regarding forward-looking statements, emphasizing inherent risks and the company's non-obligation to update them - Press release contains forward-looking statements about future events, growth strategy, vessel acquisitions, and time charters[75] - Statements involve known and unknown risks, uncertainties, and contingencies, many beyond company control, and actual results may differ materially[75] - Company disclaims any obligation to publicly update or revise forward-looking statements[75] Contact Information This section provides contact details for Euroseas Ltd.'s CFO and for investor relations through Capital Link, Inc - Contact information for Tasos Aslidis (CFO, Euroseas Ltd.) and Nicolas Bornozis / Markella Kara (Capital Link, Inc. for Investor Relations)[76]