Paragon Shipping Inc. Reports Fourth Quarter and Year Ended December 31, 2010 Results
News Release
Paragon Shipping Inc.
March 3, 2011
Page 1 of 17
PARAGON SHIPPING INC. REPORTS FOURTH QUARTER AND YEAR ENDED
DECEMBER 31, 2010 RESULTS
ATHENS, Greece, March 1, 2011 - Paragon Shipping Inc. (NYSE: PRGN), or the Company, a global shipping
transportation company specializing in drybulk cargoes and containers, announced today its results for the fourth
quarter and year ended December 31, 2010.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping,
stated, “We are pleased to announce yet another set of profitable quarterly and annual results. Our 4th consecutive
profitable year of operations underlines our commitment to management strategies that provide consistency in
corporate stability and growth. Despite the weakening chartering market and the depressed worldwide economic
environment that we have had to face and are still facing, our Company maintains its strong position. Our
Company’s Board of Directors decided to declare a quarterly dividend of $0.05 per share, payable on or about
March 24, 2011 to shareholders of record as of the close of business on March 14, 2011. Including our latest
declaration, Paragon will have distributed $0.20 per share in dividends since the beginning of 2010, which, based on
our current stock price, represents an annual dividend yield of 6.5%.”
Mr. Bodouroglou concluded, “Paragon steps with the right foot into 2011, a year that has already been titled by
various sources as one of the most challenging ones in recent shipping history. In 2010, we set the basis for a stable
financial position. As a result of our chartering strategy, we have managed to provide our shareholders with visible
cash flows. Due to our fleet renewal policy we improved the average age of our fleet from 8.4 years at the end of
2009, to 6.6 years as of today. Taking advantage of favorable conditions in the asset market, we entered into 7
newbuilding agreements at competitive prices and have secured favorable financing for these vessels. Furthermore,
we diversified our operations into the containership sector with our two accretive acquisitions, the Box Voyager and
the Box Trader. Paragon remains committed to excellence and sustainable growth.”
Fourth Quarter 2010 Financial Results:
Time charter revenue for the fourth quarter of 2010 was $28.7 million, compared to $37.1 million for the fourth
quarter of 2009. The Company reported net income of $2.3 million, or $0.04 per basic and diluted share for the
fourth quarter of 2010, calculated on 50,796,008 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 fourth quarter of 2009, the
Company reported net income of $12.7 million, or $0.26 per basic and diluted share, calculated on 47,547,627
weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the fourth quarter of 2010 was $4.1 million,
or $0.08 per basic and diluted share. This compares to adjusted net income of $8.6 million, or $0.17 per basic and
diluted share for the fourth quarter of 2009. Please refer to the table at the back of this release for reconciliations of
GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted
earnings per share.
EBITDA was $13.9 million for the fourth quarter of 2010, compared to $22.4 million for the fourth quarter of 2009.
This was calculated by adding to net income of $2.3 million for the fourth quarter of 2010, net interest expense and
depreciation that in the aggregate amounted to $11.6 million for the fourth quarter of 2010. Adjusted EBITDA,
excluding all non-cash items described below, was $15.0 million for the fourth quarter of 2010, compared to $17.6
million for the fourth quarter of 2009. Please see the table at the back of this release for a reconciliation of EBITDA
and Adjusted EBITDA to net income.
The Company operated an average of 13.1 vessels during the fourth quarter of 2010, earning an average time
charter equivalent rate, or TCE rate, of $23,053 per day, compared to an average of 12.0 vessels during the fourth
quarter of 2009, earning an average TCE rate of $32,350 per day. Please see the table at the back of this release for
a reconciliation of TCE rates to time charter revenue.
Total adjusted operating expenses for the fourth quarter of 2010 were $10.8 million, or approximately $8,921 per
day, including vessel operating expenses, management fees, general and administrative expenses and drydocking
Page 2 of 17
costs, but excluding $3.4 million of share-based compensation for the period. For the fourth quarter of 2009, total
adjusted operating expenses were $10.7 million, or approximately $9,697 per day, including vessel operating
expenses, management fees, general and administrative expenses and drydocking costs, but excluding $2.4 million
of share-based compensation.
Fourth Quarter 2010 Non-cash Items
The Company’s results for the three months ended December 31, 2010 included the following non-cash items:
?? Depreciation expense of $0.7 million, or $0.01 per basic and diluted share, associated with below market
time charters attached to vessels acquired, which increases depreciation expense (amortized over the
remaining useful life of the vessel).
?? Gain on sale of MV Clean Seas of $0.2 million, or $0.01 per basic and diluted share.
?? An unrealized gain from interest rate swaps of $2.1 million, or $0.04 per basic and diluted share.
?? Non-cash expenses of $3.4 million, or $0.07 per basic and diluted share, relating to the amortization of the
compensation cost recognized for non-vested share awards issued to executive officers, directors and
employees and related to share based compensation to the management company.
In the aggregate, these non-cash items decreased net income by $1.8 million, which represents a $0.04 decrease in
earnings per basic and diluted share, for the three months ended December 31, 2010.
Dividend Declared
The Company’s Board of Directors declared a quarterly dividend of $0.05 per share with respect to the fourth
quarter of 2010, payable on or about March 24, 2011 to shareholders of record as of the close of business on March
14, 2011.
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping Inc. mainly employs vessels under fixed rate time
charters for periods ranging from one to five years. Assuming all charter options are exercised but excluding the
newbuilding vessels which are under construction, the Company has secured under such contracts 98%, 55% and
25% of its fleet capacity in 2011, 2012 and 2013, respectively (which includes 8%, 8% and 7% in 2011, 2012 and
2013, respectively, relating to our charter contract with Korea Line Corporation).
Cash Flows
For the year ended December 31, 2010, the Company generated net cash from operating activities of $60.6 million,
compared to $80.4 million for the year ended December 31, 2009. For the year ended December 31, 2010, net cash
used in investing activities was $142.2 million and net cash used in financing activities was $17.6 million. For the
year ended December 31, 2009, net cash used in investing activities was $41.0 million and net cash from financing
activities was $25.6 million.
Financing Update
On February 25, 2011, we entered into commitment for a new $135.0 million senior secured amortizing credit
facility with a syndicate of major European banks to fully-finance our current outstanding newbuilding program
commitments. Under the terms of the commitment, amounts borrowed under the new facility will bear interest at
LIBOR, plus a margin of 2.75%. The six-year facility is still subject to the execution of definitive documentation.
Year ended December 31, 2010 Financial Results:
Time charter revenue for the year ended December 31, 2010, was $118.4 million, compared to $161.1 million for
the year ended December 31, 2009. The Company reported net income of $22.9 million, or $0.44 per basic and
diluted share for the year ended December 31, 2010, calculated on 49,812,716 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 year ended December 31, 2009, the Company reported net income of $65.7 million, or $1.69 per basic and
diluted share, calculated on 38,026,523 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the year ended December 31, 2010, was
$27.7 million, or $0.54 per basic and diluted share. This compares to adjusted net income of $55.0 million, or $1.42
per basic and diluted share for the year ended December 31, 2009. Please refer to the table at the back of this release
for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-
GAAP adjusted earnings per share.
EBITDA was $66.5 million for the year ended December 31, 2010, compared to $109.8 million for the year ended
December 31, 2009. This was calculated by adding to net income of $22.9 million for the year ended December 31,
2010, net interest expense and depreciation that in the aggregate amounted to $43.6 million for the year ended
December 31, 2010. Adjusted EBITDA, excluding all non-cash items described below, was $68.6 million for the
Page 3 of 17
year ended December 31, 2010, compared to $96.4 million for the year ended December 31, 2009. Please see the
table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated 12.1 vessels during the year ended December 31, 2010, earning an average TCE rate of
$25,911 per day, compared to an average of 12.0 vessels during the year ended December 31, 2009, earning an
average TCE rate of $35,250 per day. Please see the table at the back of this release for a reconciliation of TCE
rates to time charter revenue.
Total adjusted operating expenses for the year ended December 31, 2010, were $33.9 million, or approximately
$7,680 per day, including vessel operating expenses, management fees, general and administrative expenses and
dry-docking costs, but excluding $10.7 million of share-based compensation for the period. For the year ended
December 31, 2009, total adjusted operating expenses were $31.0 million, or approximately $7,069 per day,
including vessel operating expenses, management fees and general and administrative expenses and drydocking
costs, but excluding $3.1 million of share-based compensation.
Year ended December 31, 2010 Non-cash Items
The Company’s results for the year ended December 31, 2010, included the following non-cash items:
?? Non-cash revenue of $5.3 million and depreciation expense of $2.8 million associated with below market
time charters attached to vessels acquired, which increases net revenue (amortized over the remaining
period of the time charter) and increases depreciation expense (amortized over the remaining useful life of
the vessel), respectively. These non-cash items contributed an aggregate of $2.5 million to net income, or
$0.05 to basic and diluted earnings per share.
?? Gain on sale of MV Blue Seas and MV Clean Seas of $0.5 million in the aggregate, or $0.01 per basic and
diluted share.
?? An unrealized gain from interest rate swaps of $2.9 million, or $0.06 per basic and diluted share,
respectively.
?? Non-cash expenses of $10.7 million, or $0.21 per basic and diluted share, relating to the amortization of the
compensation cost recognized for restricted common shares issued to executive officers, directors and
employees and related to share based compensation to the management company.
In the aggregate, these non-cash items decreased net income by $4.8 million, which represents a $0.10 decrease in
earnings per basic and diluted share, for the year ended December 31, 2010.
Conference Call and Webcast:
The Company’s management will host a conference call to discuss its fourth quarter and year ended December 31,
2010 results on March 2, 2011 at 10:00 am Eastern Time.
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), 0(800) 953-0329 (from the UK) or +44 (0) 1452 542 301 (from outside the US). Please quote
"Paragon."
A replay of the conference call will be available until March 9, 2011. The United States replay number is 1(866)
247-4222; from the UK 0(800) 953-1533; the standard international replay number is +44 (0) 1452 550 000 and the
access code required for the replay is: 55939564#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through the Paragon Shipping website
(www.paragonship.com). Participants in the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
Page 4 of 17
About Paragon Shipping Inc.
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation
of drybulk cargoes and containers. The Company’s current fleet consists of eleven drybulk vessels with a total
carrying capacity of 747,994 dwt and two containerships with a total carrying capacity of 6,852 TEU.
Cautionary Statement Regarding Forward-Looking Statement
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words
"believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect,"
"pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based,
in turn, upon further assumptions, including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available from third parties. Although we believe that
these assumptions were reasonable when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot
assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include 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. Please see our
filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and
uncertainties.
Contacts:
Investor Relations / Media
Capital Link, Inc.
Paul Lampoutis
230 Park Avenue
Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: paragon@capitallink.com
- Tables Follow -
Page 5 of 17
Updated Fleet List
The following tables represent our drybulk fleet and the newbuilding vessels that we have agreed to acquire, as well
as our containership fleet as of March 1, 2011.
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
Handymax
Crystal Seas Handymax 43,222 1995
Total Handymax 1 43,222
Grand Total 11 747,994
Containership Fleet
Name TEU Dwt Year Built
Box Voyager 3,426 42,650 2010
Box Trader 3,426 42,650 2010
Total 6,852 85,300
Newbuildings that we have agreed to acquire
Name Type Dwt Expected Delivery
Kamsarmax
Hull no. 619 Kamsarmax 82,000 2012
Hull no. 622 Kamsarmax 82,000 2012
Hull no. 624 Kamsarmax 82,000 2012
Total Panamax 3 246,000
Handysize
Hull no. 604 Handysize 37,200 2011
Hull no. 605 Handysize 37,200 2011
Hull no. 612 Handysize 37,200 2012
Hull no. 625 Handysize 37,200 2012
Total Handymax 4 148,800
Grand Total 7 394,800
Page 6 of 17
Summary Fleet Data
Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
FLEET DATA
Average number of vessels (1) 12.0 13.1
Available days for fleet (2) 1,083 1,169
Calendar days for fleet (3) 1,104 1,208
Fleet utilization (4) 98% 97%
AVERAGE DAILY RESULTS
Time charter equivalent (5) 32,350 23,053
Time charter equivalent
adjusted (5) 28,007 23,053
Vessel operating expenses (6) 4,720 4,585
Drydocking expenses (7) 568 486
Management fees adjusted (8) 848 989
General and administrative
expenses adjusted (9) 3,561 2,861
Total vessel operating expenses
adjusted (10) 9,697 8,921
Year Ended
December 31, 2009
Year Ended
December 31, 2010
FLEET DATA
Average number of vessels (1) 12.0 12.1
Available days for fleet (2) 4,322 4,295
Calendar days for fleet (3) 4,380 4,419
Fleet utilization (4) 99% 97%
AVERAGE DAILY RESULTS
Time charter equivalent (5) 35,250 25,911
Time charter equivalent
adjusted (5) 30,942 24,683
Vessel operating expenses (6) 4,574 4,520
Drydocking expenses (7) 163 596
Management fees adjusted (8) 822 920
General and administrative
expenses adjusted (9) 1,510 1,644
Total vessel operating expenses
adjusted (10) 7,069 7,680
Page 7 of 17
(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 offhire
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 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 consistent with industry standards and is determined by
dividing revenue generated from charters net of 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.
For the time charter equivalent adjusted, other non-cash items relating to the below market time charters
attached to vessels acquired, which are amortized over the remaining period of the time charter as an
increase to net revenue, have been excluded. The Company excluded amortization of below market
acquired time charters because the Company believes that these adjustments provide additional information
on the fleet operational results.
(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 are calculated by dividing management fees payable in cash by fleet calendar days
for the relevant time period and exclude share based compensation to the management company.
(9) Daily general and administrative expenses are calculated by dividing general and administrative expense by
fleet calendar days for the relevant time period. Non-cash expenses relating to the amortization of the share
based compensation cost for non-vested share awards have been excluded.
(10) Total vessel operating expenses, or 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 is calculated by dividing TVOE by fleet calendar days
for the relevant time period. 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
have been excluded.
Page 8 of 17
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
Time Charter Revenues 37,120,851 28,744,697
Less Voyage Expenses (185,515) (166,872)
Less Commission (1,899,856) (1,628,521)
Total Revenue, net of voyage expenses 35,035,480 26,949,304
Total available days 1,083 1,169
Time Charter Equivalent 32,350 23,053
Time Charter Equivalent Adjusted
Reconciliation
Time Charter Revenues 37,120,851 28,744,697
Less Voyage Expenses (185,515) (166,872)
Less Commission (1,899,856) (1,628,521)
Total Revenue, net of voyage expenses 35,035,480 26,949,304
Less Amortization of Below Market
Acquired Time Charters (4,703,848) -
Total Revenue, net of voyage expenses
Adjusted 30,331,632 26,949,304
Total available days 1,083 1,169
Time Charter Equivalent Adjusted 28,007 23,053
Year Ended
December 31, 2009
Year Ended
December 31, 2010
Time Charter Revenues 161,111,782 118,382,601
Less Voyage Expenses (397,657) (412,849)
Less Commission (8,364,661) (6,682,492)
Total Revenue, net of voyage expenses 152,349,464 111,287,260
Total available days 4,322 4,295
Time Charter Equivalent 35,250 25,911
Time Charter Equivalent Adjusted
Reconciliation
Time Charter Revenues 161,111,782 118,382,601
Less Voyage Expenses (397,657) (412,849)
Less Commission (8,364,661) (6,682,492)
Total Revenue, net of voyage expenses 152,349,464 111,287,260
Less Amortization of Below Market
Acquired Time Charters (18,618,699) (5,272,801)
Total Revenue, net of voyage expenses
Adjusted 133,730,765 106,014,459
Total available days 4,322 4,295
Time Charter Equivalent Adjusted 30,942 24,683
Page 9 of 17
PARAGON SHIPPING INC.
Condensed Cash Flow Information
(Expressed in United States Dollars)
Year Ended
December 31, 2009
Year Ended
December 31, 2010
Cash and Cash Equivalents,
beginning of period 68,441,752 133,960,178
Cash provided by / (used in):
Operating Activities 80,406,754 60,613,801
Investing Activities (40,500,000) (142,151,113)
Financing Activities 25,611,672 (17,634,931)
Net increase / (decrease) in Cash and Cash
Equivalents 65,518,426 (99,172,243)
Cash and Cash Equivalents,
end of period 133,960,178 34,787,935
Page 10 of 17
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
Net Income 12,700,593 2,297,481
Plus Net Interest expense 1,482,756 2,635,111
Plus Depreciation 8,210,208 8,949,138
EBITDA 22,393,557 13,881,730
Adjusted EBITDA Reconciliation
Net Income 12,700,593 2,297,481
Non-cash revenue, depreciation and write off due
to below market acquired time charters (4,557,042) 695,825
Vessel fair value gain (654,570) -
Profit on sale of vessel - (212,993)
Unrealized gain from interest rate swaps (1,373,140) (2,062,995)
Non-cash expenses from the amortization of share
based compensation cost recognized and share
based compensation to the management company
2,443,486 3,391,596
Adjusted Net Income 8,559,327 4,108,914
Plus Net Interest expense 1,482,756 2,635,111
Plus Depreciation (2) 7,514,383 8,253,313
Adjusted EBITDA 17,556,466 14,997,338
Year Ended
December 31, 2009
Year Ended
December 31, 2010
Net Income 65,678,614 22,895,280
Plus Net Interest expense 10,329,279 9,913,808
Plus Depreciation 33,814,863 33,719,712
EBITDA 109,822,756 66,528,800
Adjusted EBITDA Reconciliation
Net Income 65,678,614 22,895,280
Non-cash revenue, depreciation and write off due
to below market acquired time charters (16,408,730) (2,512,292)
Impairment loss 6,005,000 -
Profit on sale of vessel - (475,483)
Unrealized gain from interest rate swaps (3,367,354) (2,872,337)
Non-cash expenses from the amortization of share
based compensation cost recognized and share
based compensation to the management company
3,101,691 10,687,663
Adjusted Net Income 55,009,221 27,722,831
Plus Net Interest expense 10,329,279 9,913,808
Plus Depreciation (2) 31,055,875 30,959,203
Adjusted EBITDA 96,394,375 68,595,842
(1) Paragon Shipping Inc. considers EBITDA to represent net income plus net interest expense and depreciation
and amortization. The Company’s management uses EBITDA as a performance measure. The Company
believes that EBITDA is useful to investors because the shipping industry is capital intensive and may involve
significant financing costs. EBITDA is not an item recognized by 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 GAAP. The Company’s definition of EBITDA may not be the same as that used by other
companies in the shipping or other industries. 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.
Page 11 of 17
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
(Expressed in United States Dollars)
GAAP Financial Information Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
Net Income 12,700,593 2,297,481
Income attributable to non-vested share awards (571,819) (104,912)
Net Income available to common shareholders 12,128,774 2,192,569
Weighted average number of Class A common
shares basic and diluted 47,547,627 50,796,008
Earnings per Class A common shares basic and
diluted 0.26 0.04
Reconciliation of Net Income to Adjusted
Net Income
Net Income 12,700,593 2,297,481
Non-cash revenue, depreciation and write off
due to below market acquired time charters (4,557,042) 695,825
Vessel fair value gain (654,570) -
Profit on sale of vessel - (212,993)
Unrealized gain from interest rate swaps (1,373,140) (2,062,995)
Non-cash expenses from the amortization of
compensation cost recognized and share based
compensation to the management company
2,443,486 3,391,596
Adjusted Net Income 8,559,327 4,108,914
Income attributable to non-vested share awards (385,367) (187,629)
Adjusted Net Income available to common
shareholders 8,173,960 3,921,285
Weighted average number of common shares
basic and diluted 47,547,627 50,796,008
Adjusted earnings per share basic and
diluted(1) 0.17 0.08
(1) Adjusted earnings per share is not an item recognized by GAAP and should not be considered as an alternative to
Earnings per share or any other indicator of a Company’s operating performance required by 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.
Page 12 of 17
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
(Expressed in United States Dollars)
GAAP Financial Information Year Ended
December 31, 2009
Year Ended
December 31, 2010
Net Income 65,678,614 22,895,280
Income attributable to non-vested share awards (1,278,992) (849,650)
Net Income available to common shareholders 64,399,622 22,045,630
Weighted average number of Class A common
shares basic and diluted 38,026,523 49,812,716
Earnings per Class A common shares basic and
diluted 1.69 0.44
Reconciliation of Net Income to Adjusted
Net Income
Net Income 65,678,614 22,895,280
Non-cash revenue, depreciation and write off
due to below market acquired time charters (16,408,730) (2,512,294)
Impairment loss 6,005,000 -
Profit on sale of vessel - (475,483)
Unrealized gain from interest rate swaps (3,367,354) (2,872,337)
Non-cash expenses from the amortization of
compensation cost recognized and share based
compensation to the management company
3,101,691 10,687,663
Adjusted Net Income 55,009,221 27,722,829
Income attributable to non-vested share awards (1,071,222) (1,028,802)
Adjusted Net Income available to common
shareholders 53,937,999 26,694,027
Weighted average number of common shares
basic and diluted 38,026,523 49,812,716
Adjusted earnings per share basic and
diluted(1) 1.42 0.54
(1) Adjusted earnings per share is not an item recognized by GAAP and should not be considered as an alternative to
Earnings per share or any other indicator of a Company’s operating performance required by 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.
Page 13 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2009 and December 31, 2010
(Expressed in United States Dollars)
December 31, 2009 December 31, 2010
Assets
Current assets
Cash and cash equivalents……………………………………….. 133,960,178 34,787,935
Restricted cash…………………………………………………… 31,000,000 14,990,000
Assets held for sale………………………………………………. 18,050,402 -
Trade receivables (net)…………………………………………… 2,187,039 1,087,304
Other receivables………………………………………………… 2,233,809 1,464,051
Prepaid expenses…………………………………………………. 464,804 528,475
Due from management company…………………………………. 1,231,879 1,579,192
Inventories………………………………………………………… 921,325 1,066,321
Total current assets 190,049,436 55,503,278
Fixed assets
Vessels, net….…………………………………………………… 604,732,557 695,148,227
Advances for vessels under construction…………………………. - 58,460,129
Other fixed assets, net…………………………………………… 51,718 231,745
Total fixed assets, net 604,784,275 753,840,101
Other assets………………………………………………………. 1,380,577 1,922,631
Restricted cash…………………………………………………… 15,510,000 10,010,000
Other long-term receivables………………………………………. 968,560 -
Total Assets 812,692,848 821,276,010
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable (including balance due to a related party of $17,300
and $44,625 as of December 31, 2009 and 2010 respectively) 1,951,695 1,939,685
Accrued expenses…………………………………………………. 2,416,524 2,230,475
Interest rate swaps…………………………………………………. 6,820,289 3,881,173
Deferred income…………………………………………………… 3,701,832 2,083,034
Current portion of long-term debt…………………………………… 39,200,000 35,077,988
Liability associated with vessel held for sale………………………… 24,900,000 -
Total current liabilities 78,990,340 45,212,355
Long-Term Liabilities
Long-term debt……………………………………………………… 270,235,000 282,757,012
Deferred income……………………………………………………. 461,390 1,300,699
Interest rate swaps………………………………………………….. 1,467,499 1,534,277
Below market acquired time charters……………………………….. 5,272,801 -
Total long-term liabilities 277,436,690 285,591,988
Total Liabilities 356,427,030 330,804,343
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par value; 25,000,000 authorized, none issued,
none outstanding at December 31, 2009 and 2010, respectively - -
Class A common shares, $0.001 par value; 120,000,000 and 750,000,000
authorized at December 31, 2009 and 2010 respectively; 51,189,033 and
55,870,299 issued and outstanding at December 31, 2009 and 2010, respectively 51,189 55,870
Class B common shares, $0.001 par value; 5,000,000 authorized
none issued and outstanding at December 31, 2009 and 2010, respectively - -
Additional paid-in capital…………………………………………….. 408,619,010 430,339,354
Retained earnings…………………………………………………… 47,595,619 60,076,443
Total shareholders' equity 456,265,818 490,471,667
Total Liabilities and Shareholders' Equity 812,692,848 821,276,010
Page 14 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the three months ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2010
Revenue
Time charter revenue (including amortization of below and above market
acquired time charters of $4,703,848 and $0 for the
three months ended December 31, 2009 and 2010, respectively) 37,120,851 28,744,697
Less: commissions (including related party commissions of $433,030 and
$366,494 for the three months ended December 31, 2009
and 2010, respectively) 1,899,856 1,628,521
Net Revenue 35,220,995 27,116,176
Expenses / (Income)
Voyage expenses 185,515 166,872
Vessels operating expenses (including expenses charged by a
related party of $49,800 and $82,733 for the three months ended
December 31, 2009 and 2010, respectively) 5,210,933 5,539,101
Dry-docking expenses 627,230 586,802
Management fees charged by a related party (including share
based compensation of $762,732 and $226,459 for the three months ended
December 31, 2009 and 2010, respectively) 1,699,244 1,420,535
Depreciation 8,210,208 8,949,138
General and administrative expenses (including share
based compensation of $1,680,754 and $3,165,137 for the three months ended
December 31, 2009 and 2010, respectively) 5,611,591 6,621,259
Vessel fair value gain (654,570) -
Gain on sale of assets - (212,993)
Gain from vessel early redelivery (549,019) -
Operating Income 14,879,863 4,045,462
Other Income / (Expenses)
Interest and finance costs (1,971,147) (2,667,205)
(Loss)/gain on derivatives (690,507) 913,457
Interest income 488,391 32,094
Foreign currency loss (6,007) (26,327)
Total Other Expenses, net (2,179,270) (1,747,981)
Net Income 12,700,593 2,297,481
Earnings per Class A common share, basic and diluted $ 0.26 $ 0.04
Weighted average number of Class A common shares, basic and diluted 47,547,627 50,796,008
Page 15 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, 2009 December 31, 2010
Revenue
Time charter revenue (including amortization of below and above market
acquired time charters of $18,618,699 and $5,272,801 for the
year ended December 31, 2009 and 2010, respectively) 161,111,782 118,382,601
Less: commissions (including related party commissions of $1,776,959 and
$1,427,823 for the year ended December 31, 2009
and 2010, respectively) 8,364,661 6,682,492
Net Revenue 152,747,121 111,700,109
Expenses / (Income)
Voyage expenses 397,657 412,849
Vessels operating expenses (including expenses charged by a
related party of $194,900 and $324,061 for the year ended
December 31, 2009 and 2010, respectively) 20,034,664 19,974,806
Dry-docking expenses 715,308 2,632,479
Management fees charged by a related party (including share
based compensation of $762,732 and $226,459 for the year ended
December 31, 2009 and 2010, respectively) 4,362,908 4,292,291
Depreciation 33,814,863 33,719,712
General and administrative expenses (including share
based compensation of $2,338,959 and $10,461,204 for the year ended
December 31, 2009 and 2010, respectively) 8,949,096 17,723,987
Impairment loss 6,005,000 -
Gain on sale of assets / vessel acquisition option - (1,064,023)
Gain on vessel early redelivery (800,874) (113,338)
Operating Income 79,268,499 34,121,346
Other Income / (Expenses)
Interest and finance costs (11,379,241) (10,234,928)
Loss on derivatives (3,239,236) (2,611,920)
Interest income 1,049,962 321,120
Foreign currency (loss)/gain (21,370) 1,299,662
Total Other Expenses, net (13,589,885) (11,226,066)
Net Income 65,678,614 22,895,280
Earnings per Class A common share, basic and diluted $ 1.69 $ 0.44
Weighted average number of Class A common shares, basic and diluted 38,026,523 49,812,716
Page 16 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Shareholders' Equity
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars, except for number of shares)
(Accumulated
Additional Deficit) /
Number of Par Paid-in Retained
Shares Value Capital Earnings Total
27,138,515 27,139 318,515,490 (10,111,350) 308,431,279
24,051,518 24,051 90,103,519 90,127,570
(1,000) (1) 1
Dividends declared (0.20 per share) (7,971,645) (7,971,645)
Net Income…………………….. 65,678,614 65,678,614
51,189,033 Balance December 31, 2009 51,189 408,619,010 47,595,619 456,265,818
Issuance of Class A common shares
and share based compensation
Class A Shares
Cancellation of restricted Class A
common shares…………………
Balance January 1, 2009
4,689,700 4,689 21,720,336 21,725,025
(8,434) (8) 8
Dividends declared (0.20 per share) (10,414,456) (10,414,456)
Net Income…………………….. 22,895,280 22,895,280
Balance December 31, 2010 55,870,299 55,870 430,339,354 60,076,443 490,471,667
Issuance of Class A common shares,
and share based compensation
Cancellation of restricted Class A
common shares…………………
Page 17 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, 2009 December 31, 2010
Cash flows from operating activities
Net Income……………………………………………………….. 65,678,614 22,895,280
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation………………………………………………………. 33,814,863 33,719,712
Impairment loss…………………………………………………… 6,005,000 -
Profit on sale of assets / vessel acquisition option…………………. - (1,064,023)
Amortization of below and above market acquired time charters…. (18,618,699) (5,272,801)
Amortization of financing costs……………………………………. 970,327 907,310
Gain on vessel early redelivery……….…...………………………. (549,019) -
Share based compensation………………………………………… 3,101,690 10,687,663
Unrealized gain on interest rate swaps…………………………….. (3,367,354) (2,872,337)
Changes in assets and liabilities
Trade receivables (net)…………………………………………….. (1,814,074) 1,099,735
Other receivables………………………………………………….. (1,024,579) 769,758
Prepaid expenses………………………………………………….. (85,664) (63,671)
Inventories………………………………………………………… (407,992) (144,996)
Due from management company………………………………….. (245,919) (347,313)
Other long term receivables……………………………………….. (893,800) 968,560
Trade accounts payable…………………………………………… (638,818) (12,010)
Accrued expenses………………………………………………… (1,952,758) 122,423
Deferred income………………………………………………….. 434,936 (779,489)
Net cash from operating activities 80,406,754 60,613,801
Cash flow from Investing Activities
Net proceeds from sale of assets / vessel acquisition option………. - 41,556,934
Acquisition of vessels and capital expenditures…..………………… - (146,551,672)
Payments for vessels under construction…………………………… - (58,460,129)
Other fixed assets…………..……………………………………… - (206,246)
Release of restricted cash.…………………………………………. - 23,010,000
Increase in restricted cash..………………………………………… (40,500,000) (1,500,000)
Net cash used in investing activities (40,500,000) (142,151,113)
Cash flows from financing activities
Proceeds from long-term debt……………………………………… 30,000,000 70,000,000
Repayment of long-term debt………………………………………. (83,150,000) (86,500,000)
Payment of financing costs………………………………………… (292,563) (1,648,201)
Proceeds from the issuance of Class A common shares (net)……… 87,025,880 10,927,726
Dividends paid……………………………………………………… (7,971,645) (10,414,456)
Net cash from / (used in) financing activities 25,611,672 (17,634,931)
Net increase / (decrease) in cash and cash equivalents 65,518,426 (99,172,243)
Cash and cash equivalents at the beginning of the period 68,441,752 133,960,178
Cash and cash equivalents at the end of the period 133,960,178 34,787,935
Supplemental disclosure of cash flow information
Cash paid during the period for interest…………………………….. 11,961,768 8,745,571
Non cash financing activities………………..……………………… 270,353 167,737
PARAGON SHIPPING INC. REPORTS FOURTH QUARTER AND YEAR ENDED
DECEMBER 31, 2010 RESULTS
ATHENS, Greece, March 1, 2011 - Paragon Shipping Inc. (NYSE: PRGN), or the Company, a global shipping
transportation company specializing in drybulk cargoes and containers, announced today its results for the fourth
quarter and year ended December 31, 2010.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping,
stated, “We are pleased to announce yet another set of profitable quarterly and annual results. Our 4th consecutive
profitable year of operations underlines our commitment to management strategies that provide consistency in
corporate stability and growth. Despite the weakening chartering market and the depressed worldwide economic
environment that we have had to face and are still facing, our Company maintains its strong position. Our
Company’s Board of Directors decided to declare a quarterly dividend of $0.05 per share, payable on or about
March 24, 2011 to shareholders of record as of the close of business on March 14, 2011. Including our latest
declaration, Paragon will have distributed $0.20 per share in dividends since the beginning of 2010, which, based on
our current stock price, represents an annual dividend yield of 6.5%.”
Mr. Bodouroglou concluded, “Paragon steps with the right foot into 2011, a year that has already been titled by
various sources as one of the most challenging ones in recent shipping history. In 2010, we set the basis for a stable
financial position. As a result of our chartering strategy, we have managed to provide our shareholders with visible
cash flows. Due to our fleet renewal policy we improved the average age of our fleet from 8.4 years at the end of
2009, to 6.6 years as of today. Taking advantage of favorable conditions in the asset market, we entered into 7
newbuilding agreements at competitive prices and have secured favorable financing for these vessels. Furthermore,
we diversified our operations into the containership sector with our two accretive acquisitions, the Box Voyager and
the Box Trader. Paragon remains committed to excellence and sustainable growth.”
Fourth Quarter 2010 Financial Results:
Time charter revenue for the fourth quarter of 2010 was $28.7 million, compared to $37.1 million for the fourth
quarter of 2009. The Company reported net income of $2.3 million, or $0.04 per basic and diluted share for the
fourth quarter of 2010, calculated on 50,796,008 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 fourth quarter of 2009, the
Company reported net income of $12.7 million, or $0.26 per basic and diluted share, calculated on 47,547,627
weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the fourth quarter of 2010 was $4.1 million,
or $0.08 per basic and diluted share. This compares to adjusted net income of $8.6 million, or $0.17 per basic and
diluted share for the fourth quarter of 2009. Please refer to the table at the back of this release for reconciliations of
GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted
earnings per share.
EBITDA was $13.9 million for the fourth quarter of 2010, compared to $22.4 million for the fourth quarter of 2009.
This was calculated by adding to net income of $2.3 million for the fourth quarter of 2010, net interest expense and
depreciation that in the aggregate amounted to $11.6 million for the fourth quarter of 2010. Adjusted EBITDA,
excluding all non-cash items described below, was $15.0 million for the fourth quarter of 2010, compared to $17.6
million for the fourth quarter of 2009. Please see the table at the back of this release for a reconciliation of EBITDA
and Adjusted EBITDA to net income.
The Company operated an average of 13.1 vessels during the fourth quarter of 2010, earning an average time
charter equivalent rate, or TCE rate, of $23,053 per day, compared to an average of 12.0 vessels during the fourth
quarter of 2009, earning an average TCE rate of $32,350 per day. Please see the table at the back of this release for
a reconciliation of TCE rates to time charter revenue.
Total adjusted operating expenses for the fourth quarter of 2010 were $10.8 million, or approximately $8,921 per
day, including vessel operating expenses, management fees, general and administrative expenses and drydocking
Page 2 of 17
costs, but excluding $3.4 million of share-based compensation for the period. For the fourth quarter of 2009, total
adjusted operating expenses were $10.7 million, or approximately $9,697 per day, including vessel operating
expenses, management fees, general and administrative expenses and drydocking costs, but excluding $2.4 million
of share-based compensation.
Fourth Quarter 2010 Non-cash Items
The Company’s results for the three months ended December 31, 2010 included the following non-cash items:
?? Depreciation expense of $0.7 million, or $0.01 per basic and diluted share, associated with below market
time charters attached to vessels acquired, which increases depreciation expense (amortized over the
remaining useful life of the vessel).
?? Gain on sale of MV Clean Seas of $0.2 million, or $0.01 per basic and diluted share.
?? An unrealized gain from interest rate swaps of $2.1 million, or $0.04 per basic and diluted share.
?? Non-cash expenses of $3.4 million, or $0.07 per basic and diluted share, relating to the amortization of the
compensation cost recognized for non-vested share awards issued to executive officers, directors and
employees and related to share based compensation to the management company.
In the aggregate, these non-cash items decreased net income by $1.8 million, which represents a $0.04 decrease in
earnings per basic and diluted share, for the three months ended December 31, 2010.
Dividend Declared
The Company’s Board of Directors declared a quarterly dividend of $0.05 per share with respect to the fourth
quarter of 2010, payable on or about March 24, 2011 to shareholders of record as of the close of business on March
14, 2011.
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping Inc. mainly employs vessels under fixed rate time
charters for periods ranging from one to five years. Assuming all charter options are exercised but excluding the
newbuilding vessels which are under construction, the Company has secured under such contracts 98%, 55% and
25% of its fleet capacity in 2011, 2012 and 2013, respectively (which includes 8%, 8% and 7% in 2011, 2012 and
2013, respectively, relating to our charter contract with Korea Line Corporation).
Cash Flows
For the year ended December 31, 2010, the Company generated net cash from operating activities of $60.6 million,
compared to $80.4 million for the year ended December 31, 2009. For the year ended December 31, 2010, net cash
used in investing activities was $142.2 million and net cash used in financing activities was $17.6 million. For the
year ended December 31, 2009, net cash used in investing activities was $41.0 million and net cash from financing
activities was $25.6 million.
Financing Update
On February 25, 2011, we entered into commitment for a new $135.0 million senior secured amortizing credit
facility with a syndicate of major European banks to fully-finance our current outstanding newbuilding program
commitments. Under the terms of the commitment, amounts borrowed under the new facility will bear interest at
LIBOR, plus a margin of 2.75%. The six-year facility is still subject to the execution of definitive documentation.
Year ended December 31, 2010 Financial Results:
Time charter revenue for the year ended December 31, 2010, was $118.4 million, compared to $161.1 million for
the year ended December 31, 2009. The Company reported net income of $22.9 million, or $0.44 per basic and
diluted share for the year ended December 31, 2010, calculated on 49,812,716 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 year ended December 31, 2009, the Company reported net income of $65.7 million, or $1.69 per basic and
diluted share, calculated on 38,026,523 weighted average number of basic and diluted shares.
Excluding all non-cash items described below, adjusted net income for the year ended December 31, 2010, was
$27.7 million, or $0.54 per basic and diluted share. This compares to adjusted net income of $55.0 million, or $1.42
per basic and diluted share for the year ended December 31, 2009. Please refer to the table at the back of this release
for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-
GAAP adjusted earnings per share.
EBITDA was $66.5 million for the year ended December 31, 2010, compared to $109.8 million for the year ended
December 31, 2009. This was calculated by adding to net income of $22.9 million for the year ended December 31,
2010, net interest expense and depreciation that in the aggregate amounted to $43.6 million for the year ended
December 31, 2010. Adjusted EBITDA, excluding all non-cash items described below, was $68.6 million for the
Page 3 of 17
year ended December 31, 2010, compared to $96.4 million for the year ended December 31, 2009. Please see the
table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to net income.
The Company operated 12.1 vessels during the year ended December 31, 2010, earning an average TCE rate of
$25,911 per day, compared to an average of 12.0 vessels during the year ended December 31, 2009, earning an
average TCE rate of $35,250 per day. Please see the table at the back of this release for a reconciliation of TCE
rates to time charter revenue.
Total adjusted operating expenses for the year ended December 31, 2010, were $33.9 million, or approximately
$7,680 per day, including vessel operating expenses, management fees, general and administrative expenses and
dry-docking costs, but excluding $10.7 million of share-based compensation for the period. For the year ended
December 31, 2009, total adjusted operating expenses were $31.0 million, or approximately $7,069 per day,
including vessel operating expenses, management fees and general and administrative expenses and drydocking
costs, but excluding $3.1 million of share-based compensation.
Year ended December 31, 2010 Non-cash Items
The Company’s results for the year ended December 31, 2010, included the following non-cash items:
?? Non-cash revenue of $5.3 million and depreciation expense of $2.8 million associated with below market
time charters attached to vessels acquired, which increases net revenue (amortized over the remaining
period of the time charter) and increases depreciation expense (amortized over the remaining useful life of
the vessel), respectively. These non-cash items contributed an aggregate of $2.5 million to net income, or
$0.05 to basic and diluted earnings per share.
?? Gain on sale of MV Blue Seas and MV Clean Seas of $0.5 million in the aggregate, or $0.01 per basic and
diluted share.
?? An unrealized gain from interest rate swaps of $2.9 million, or $0.06 per basic and diluted share,
respectively.
?? Non-cash expenses of $10.7 million, or $0.21 per basic and diluted share, relating to the amortization of the
compensation cost recognized for restricted common shares issued to executive officers, directors and
employees and related to share based compensation to the management company.
In the aggregate, these non-cash items decreased net income by $4.8 million, which represents a $0.10 decrease in
earnings per basic and diluted share, for the year ended December 31, 2010.
Conference Call and Webcast:
The Company’s management will host a conference call to discuss its fourth quarter and year ended December 31,
2010 results on March 2, 2011 at 10:00 am Eastern Time.
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), 0(800) 953-0329 (from the UK) or +44 (0) 1452 542 301 (from outside the US). Please quote
"Paragon."
A replay of the conference call will be available until March 9, 2011. The United States replay number is 1(866)
247-4222; from the UK 0(800) 953-1533; the standard international replay number is +44 (0) 1452 550 000 and the
access code required for the replay is: 55939564#.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through the Paragon Shipping website
(www.paragonship.com). Participants in the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
Page 4 of 17
About Paragon Shipping Inc.
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation
of drybulk cargoes and containers. The Company’s current fleet consists of eleven drybulk vessels with a total
carrying capacity of 747,994 dwt and two containerships with a total carrying capacity of 6,852 TEU.
Cautionary Statement Regarding Forward-Looking Statement
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words
"believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect,"
"pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based,
in turn, upon further assumptions, including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available from third parties. Although we believe that
these assumptions were reasonable when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot
assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include 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. Please see our
filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and
uncertainties.
Contacts:
Investor Relations / Media
Capital Link, Inc.
Paul Lampoutis
230 Park Avenue
Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: paragon@capitallink.com
- Tables Follow -
Page 5 of 17
Updated Fleet List
The following tables represent our drybulk fleet and the newbuilding vessels that we have agreed to acquire, as well
as our containership fleet as of March 1, 2011.
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
Handymax
Crystal Seas Handymax 43,222 1995
Total Handymax 1 43,222
Grand Total 11 747,994
Containership Fleet
Name TEU Dwt Year Built
Box Voyager 3,426 42,650 2010
Box Trader 3,426 42,650 2010
Total 6,852 85,300
Newbuildings that we have agreed to acquire
Name Type Dwt Expected Delivery
Kamsarmax
Hull no. 619 Kamsarmax 82,000 2012
Hull no. 622 Kamsarmax 82,000 2012
Hull no. 624 Kamsarmax 82,000 2012
Total Panamax 3 246,000
Handysize
Hull no. 604 Handysize 37,200 2011
Hull no. 605 Handysize 37,200 2011
Hull no. 612 Handysize 37,200 2012
Hull no. 625 Handysize 37,200 2012
Total Handymax 4 148,800
Grand Total 7 394,800
Page 6 of 17
Summary Fleet Data
Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
FLEET DATA
Average number of vessels (1) 12.0 13.1
Available days for fleet (2) 1,083 1,169
Calendar days for fleet (3) 1,104 1,208
Fleet utilization (4) 98% 97%
AVERAGE DAILY RESULTS
Time charter equivalent (5) 32,350 23,053
Time charter equivalent
adjusted (5) 28,007 23,053
Vessel operating expenses (6) 4,720 4,585
Drydocking expenses (7) 568 486
Management fees adjusted (8) 848 989
General and administrative
expenses adjusted (9) 3,561 2,861
Total vessel operating expenses
adjusted (10) 9,697 8,921
Year Ended
December 31, 2009
Year Ended
December 31, 2010
FLEET DATA
Average number of vessels (1) 12.0 12.1
Available days for fleet (2) 4,322 4,295
Calendar days for fleet (3) 4,380 4,419
Fleet utilization (4) 99% 97%
AVERAGE DAILY RESULTS
Time charter equivalent (5) 35,250 25,911
Time charter equivalent
adjusted (5) 30,942 24,683
Vessel operating expenses (6) 4,574 4,520
Drydocking expenses (7) 163 596
Management fees adjusted (8) 822 920
General and administrative
expenses adjusted (9) 1,510 1,644
Total vessel operating expenses
adjusted (10) 7,069 7,680
Page 7 of 17
(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 offhire
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 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 consistent with industry standards and is determined by
dividing revenue generated from charters net of 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.
For the time charter equivalent adjusted, other non-cash items relating to the below market time charters
attached to vessels acquired, which are amortized over the remaining period of the time charter as an
increase to net revenue, have been excluded. The Company excluded amortization of below market
acquired time charters because the Company believes that these adjustments provide additional information
on the fleet operational results.
(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 are calculated by dividing management fees payable in cash by fleet calendar days
for the relevant time period and exclude share based compensation to the management company.
(9) Daily general and administrative expenses are calculated by dividing general and administrative expense by
fleet calendar days for the relevant time period. Non-cash expenses relating to the amortization of the share
based compensation cost for non-vested share awards have been excluded.
(10) Total vessel operating expenses, or 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 is calculated by dividing TVOE by fleet calendar days
for the relevant time period. 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
have been excluded.
Page 8 of 17
Time Charter Equivalents Reconciliation
(Expressed in United States Dollars)
Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
Time Charter Revenues 37,120,851 28,744,697
Less Voyage Expenses (185,515) (166,872)
Less Commission (1,899,856) (1,628,521)
Total Revenue, net of voyage expenses 35,035,480 26,949,304
Total available days 1,083 1,169
Time Charter Equivalent 32,350 23,053
Time Charter Equivalent Adjusted
Reconciliation
Time Charter Revenues 37,120,851 28,744,697
Less Voyage Expenses (185,515) (166,872)
Less Commission (1,899,856) (1,628,521)
Total Revenue, net of voyage expenses 35,035,480 26,949,304
Less Amortization of Below Market
Acquired Time Charters (4,703,848) -
Total Revenue, net of voyage expenses
Adjusted 30,331,632 26,949,304
Total available days 1,083 1,169
Time Charter Equivalent Adjusted 28,007 23,053
Year Ended
December 31, 2009
Year Ended
December 31, 2010
Time Charter Revenues 161,111,782 118,382,601
Less Voyage Expenses (397,657) (412,849)
Less Commission (8,364,661) (6,682,492)
Total Revenue, net of voyage expenses 152,349,464 111,287,260
Total available days 4,322 4,295
Time Charter Equivalent 35,250 25,911
Time Charter Equivalent Adjusted
Reconciliation
Time Charter Revenues 161,111,782 118,382,601
Less Voyage Expenses (397,657) (412,849)
Less Commission (8,364,661) (6,682,492)
Total Revenue, net of voyage expenses 152,349,464 111,287,260
Less Amortization of Below Market
Acquired Time Charters (18,618,699) (5,272,801)
Total Revenue, net of voyage expenses
Adjusted 133,730,765 106,014,459
Total available days 4,322 4,295
Time Charter Equivalent Adjusted 30,942 24,683
Page 9 of 17
PARAGON SHIPPING INC.
Condensed Cash Flow Information
(Expressed in United States Dollars)
Year Ended
December 31, 2009
Year Ended
December 31, 2010
Cash and Cash Equivalents,
beginning of period 68,441,752 133,960,178
Cash provided by / (used in):
Operating Activities 80,406,754 60,613,801
Investing Activities (40,500,000) (142,151,113)
Financing Activities 25,611,672 (17,634,931)
Net increase / (decrease) in Cash and Cash
Equivalents 65,518,426 (99,172,243)
Cash and Cash Equivalents,
end of period 133,960,178 34,787,935
Page 10 of 17
EBITDA Reconciliation (1)
(Expressed in United States Dollars)
Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
Net Income 12,700,593 2,297,481
Plus Net Interest expense 1,482,756 2,635,111
Plus Depreciation 8,210,208 8,949,138
EBITDA 22,393,557 13,881,730
Adjusted EBITDA Reconciliation
Net Income 12,700,593 2,297,481
Non-cash revenue, depreciation and write off due
to below market acquired time charters (4,557,042) 695,825
Vessel fair value gain (654,570) -
Profit on sale of vessel - (212,993)
Unrealized gain from interest rate swaps (1,373,140) (2,062,995)
Non-cash expenses from the amortization of share
based compensation cost recognized and share
based compensation to the management company
2,443,486 3,391,596
Adjusted Net Income 8,559,327 4,108,914
Plus Net Interest expense 1,482,756 2,635,111
Plus Depreciation (2) 7,514,383 8,253,313
Adjusted EBITDA 17,556,466 14,997,338
Year Ended
December 31, 2009
Year Ended
December 31, 2010
Net Income 65,678,614 22,895,280
Plus Net Interest expense 10,329,279 9,913,808
Plus Depreciation 33,814,863 33,719,712
EBITDA 109,822,756 66,528,800
Adjusted EBITDA Reconciliation
Net Income 65,678,614 22,895,280
Non-cash revenue, depreciation and write off due
to below market acquired time charters (16,408,730) (2,512,292)
Impairment loss 6,005,000 -
Profit on sale of vessel - (475,483)
Unrealized gain from interest rate swaps (3,367,354) (2,872,337)
Non-cash expenses from the amortization of share
based compensation cost recognized and share
based compensation to the management company
3,101,691 10,687,663
Adjusted Net Income 55,009,221 27,722,831
Plus Net Interest expense 10,329,279 9,913,808
Plus Depreciation (2) 31,055,875 30,959,203
Adjusted EBITDA 96,394,375 68,595,842
(1) Paragon Shipping Inc. considers EBITDA to represent net income plus net interest expense and depreciation
and amortization. The Company’s management uses EBITDA as a performance measure. The Company
believes that EBITDA is useful to investors because the shipping industry is capital intensive and may involve
significant financing costs. EBITDA is not an item recognized by 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 GAAP. The Company’s definition of EBITDA may not be the same as that used by other
companies in the shipping or other industries. 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.
Page 11 of 17
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
(Expressed in United States Dollars)
GAAP Financial Information Quarter Ended
December 31, 2009
Quarter Ended
December 31, 2010
Net Income 12,700,593 2,297,481
Income attributable to non-vested share awards (571,819) (104,912)
Net Income available to common shareholders 12,128,774 2,192,569
Weighted average number of Class A common
shares basic and diluted 47,547,627 50,796,008
Earnings per Class A common shares basic and
diluted 0.26 0.04
Reconciliation of Net Income to Adjusted
Net Income
Net Income 12,700,593 2,297,481
Non-cash revenue, depreciation and write off
due to below market acquired time charters (4,557,042) 695,825
Vessel fair value gain (654,570) -
Profit on sale of vessel - (212,993)
Unrealized gain from interest rate swaps (1,373,140) (2,062,995)
Non-cash expenses from the amortization of
compensation cost recognized and share based
compensation to the management company
2,443,486 3,391,596
Adjusted Net Income 8,559,327 4,108,914
Income attributable to non-vested share awards (385,367) (187,629)
Adjusted Net Income available to common
shareholders 8,173,960 3,921,285
Weighted average number of common shares
basic and diluted 47,547,627 50,796,008
Adjusted earnings per share basic and
diluted(1) 0.17 0.08
(1) Adjusted earnings per share is not an item recognized by GAAP and should not be considered as an alternative to
Earnings per share or any other indicator of a Company’s operating performance required by 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.
Page 12 of 17
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
(Expressed in United States Dollars)
GAAP Financial Information Year Ended
December 31, 2009
Year Ended
December 31, 2010
Net Income 65,678,614 22,895,280
Income attributable to non-vested share awards (1,278,992) (849,650)
Net Income available to common shareholders 64,399,622 22,045,630
Weighted average number of Class A common
shares basic and diluted 38,026,523 49,812,716
Earnings per Class A common shares basic and
diluted 1.69 0.44
Reconciliation of Net Income to Adjusted
Net Income
Net Income 65,678,614 22,895,280
Non-cash revenue, depreciation and write off
due to below market acquired time charters (16,408,730) (2,512,294)
Impairment loss 6,005,000 -
Profit on sale of vessel - (475,483)
Unrealized gain from interest rate swaps (3,367,354) (2,872,337)
Non-cash expenses from the amortization of
compensation cost recognized and share based
compensation to the management company
3,101,691 10,687,663
Adjusted Net Income 55,009,221 27,722,829
Income attributable to non-vested share awards (1,071,222) (1,028,802)
Adjusted Net Income available to common
shareholders 53,937,999 26,694,027
Weighted average number of common shares
basic and diluted 38,026,523 49,812,716
Adjusted earnings per share basic and
diluted(1) 1.42 0.54
(1) Adjusted earnings per share is not an item recognized by GAAP and should not be considered as an alternative to
Earnings per share or any other indicator of a Company’s operating performance required by 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.
Page 13 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2009 and December 31, 2010
(Expressed in United States Dollars)
December 31, 2009 December 31, 2010
Assets
Current assets
Cash and cash equivalents……………………………………….. 133,960,178 34,787,935
Restricted cash…………………………………………………… 31,000,000 14,990,000
Assets held for sale………………………………………………. 18,050,402 -
Trade receivables (net)…………………………………………… 2,187,039 1,087,304
Other receivables………………………………………………… 2,233,809 1,464,051
Prepaid expenses…………………………………………………. 464,804 528,475
Due from management company…………………………………. 1,231,879 1,579,192
Inventories………………………………………………………… 921,325 1,066,321
Total current assets 190,049,436 55,503,278
Fixed assets
Vessels, net….…………………………………………………… 604,732,557 695,148,227
Advances for vessels under construction…………………………. - 58,460,129
Other fixed assets, net…………………………………………… 51,718 231,745
Total fixed assets, net 604,784,275 753,840,101
Other assets………………………………………………………. 1,380,577 1,922,631
Restricted cash…………………………………………………… 15,510,000 10,010,000
Other long-term receivables………………………………………. 968,560 -
Total Assets 812,692,848 821,276,010
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable (including balance due to a related party of $17,300
and $44,625 as of December 31, 2009 and 2010 respectively) 1,951,695 1,939,685
Accrued expenses…………………………………………………. 2,416,524 2,230,475
Interest rate swaps…………………………………………………. 6,820,289 3,881,173
Deferred income…………………………………………………… 3,701,832 2,083,034
Current portion of long-term debt…………………………………… 39,200,000 35,077,988
Liability associated with vessel held for sale………………………… 24,900,000 -
Total current liabilities 78,990,340 45,212,355
Long-Term Liabilities
Long-term debt……………………………………………………… 270,235,000 282,757,012
Deferred income……………………………………………………. 461,390 1,300,699
Interest rate swaps………………………………………………….. 1,467,499 1,534,277
Below market acquired time charters……………………………….. 5,272,801 -
Total long-term liabilities 277,436,690 285,591,988
Total Liabilities 356,427,030 330,804,343
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par value; 25,000,000 authorized, none issued,
none outstanding at December 31, 2009 and 2010, respectively - -
Class A common shares, $0.001 par value; 120,000,000 and 750,000,000
authorized at December 31, 2009 and 2010 respectively; 51,189,033 and
55,870,299 issued and outstanding at December 31, 2009 and 2010, respectively 51,189 55,870
Class B common shares, $0.001 par value; 5,000,000 authorized
none issued and outstanding at December 31, 2009 and 2010, respectively - -
Additional paid-in capital…………………………………………….. 408,619,010 430,339,354
Retained earnings…………………………………………………… 47,595,619 60,076,443
Total shareholders' equity 456,265,818 490,471,667
Total Liabilities and Shareholders' Equity 812,692,848 821,276,010
Page 14 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the three months ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2010
Revenue
Time charter revenue (including amortization of below and above market
acquired time charters of $4,703,848 and $0 for the
three months ended December 31, 2009 and 2010, respectively) 37,120,851 28,744,697
Less: commissions (including related party commissions of $433,030 and
$366,494 for the three months ended December 31, 2009
and 2010, respectively) 1,899,856 1,628,521
Net Revenue 35,220,995 27,116,176
Expenses / (Income)
Voyage expenses 185,515 166,872
Vessels operating expenses (including expenses charged by a
related party of $49,800 and $82,733 for the three months ended
December 31, 2009 and 2010, respectively) 5,210,933 5,539,101
Dry-docking expenses 627,230 586,802
Management fees charged by a related party (including share
based compensation of $762,732 and $226,459 for the three months ended
December 31, 2009 and 2010, respectively) 1,699,244 1,420,535
Depreciation 8,210,208 8,949,138
General and administrative expenses (including share
based compensation of $1,680,754 and $3,165,137 for the three months ended
December 31, 2009 and 2010, respectively) 5,611,591 6,621,259
Vessel fair value gain (654,570) -
Gain on sale of assets - (212,993)
Gain from vessel early redelivery (549,019) -
Operating Income 14,879,863 4,045,462
Other Income / (Expenses)
Interest and finance costs (1,971,147) (2,667,205)
(Loss)/gain on derivatives (690,507) 913,457
Interest income 488,391 32,094
Foreign currency loss (6,007) (26,327)
Total Other Expenses, net (2,179,270) (1,747,981)
Net Income 12,700,593 2,297,481
Earnings per Class A common share, basic and diluted $ 0.26 $ 0.04
Weighted average number of Class A common shares, basic and diluted 47,547,627 50,796,008
Page 15 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, 2009 December 31, 2010
Revenue
Time charter revenue (including amortization of below and above market
acquired time charters of $18,618,699 and $5,272,801 for the
year ended December 31, 2009 and 2010, respectively) 161,111,782 118,382,601
Less: commissions (including related party commissions of $1,776,959 and
$1,427,823 for the year ended December 31, 2009
and 2010, respectively) 8,364,661 6,682,492
Net Revenue 152,747,121 111,700,109
Expenses / (Income)
Voyage expenses 397,657 412,849
Vessels operating expenses (including expenses charged by a
related party of $194,900 and $324,061 for the year ended
December 31, 2009 and 2010, respectively) 20,034,664 19,974,806
Dry-docking expenses 715,308 2,632,479
Management fees charged by a related party (including share
based compensation of $762,732 and $226,459 for the year ended
December 31, 2009 and 2010, respectively) 4,362,908 4,292,291
Depreciation 33,814,863 33,719,712
General and administrative expenses (including share
based compensation of $2,338,959 and $10,461,204 for the year ended
December 31, 2009 and 2010, respectively) 8,949,096 17,723,987
Impairment loss 6,005,000 -
Gain on sale of assets / vessel acquisition option - (1,064,023)
Gain on vessel early redelivery (800,874) (113,338)
Operating Income 79,268,499 34,121,346
Other Income / (Expenses)
Interest and finance costs (11,379,241) (10,234,928)
Loss on derivatives (3,239,236) (2,611,920)
Interest income 1,049,962 321,120
Foreign currency (loss)/gain (21,370) 1,299,662
Total Other Expenses, net (13,589,885) (11,226,066)
Net Income 65,678,614 22,895,280
Earnings per Class A common share, basic and diluted $ 1.69 $ 0.44
Weighted average number of Class A common shares, basic and diluted 38,026,523 49,812,716
Page 16 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Shareholders' Equity
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars, except for number of shares)
(Accumulated
Additional Deficit) /
Number of Par Paid-in Retained
Shares Value Capital Earnings Total
27,138,515 27,139 318,515,490 (10,111,350) 308,431,279
24,051,518 24,051 90,103,519 90,127,570
(1,000) (1) 1
Dividends declared (0.20 per share) (7,971,645) (7,971,645)
Net Income…………………….. 65,678,614 65,678,614
51,189,033 Balance December 31, 2009 51,189 408,619,010 47,595,619 456,265,818
Issuance of Class A common shares
and share based compensation
Class A Shares
Cancellation of restricted Class A
common shares…………………
Balance January 1, 2009
4,689,700 4,689 21,720,336 21,725,025
(8,434) (8) 8
Dividends declared (0.20 per share) (10,414,456) (10,414,456)
Net Income…………………….. 22,895,280 22,895,280
Balance December 31, 2010 55,870,299 55,870 430,339,354 60,076,443 490,471,667
Issuance of Class A common shares,
and share based compensation
Cancellation of restricted Class A
common shares…………………
Page 17 of 17
Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the year ended December 31, 2009 and 2010
(Expressed in United States Dollars)
Year Ended Year Ended
December 31, 2009 December 31, 2010
Cash flows from operating activities
Net Income……………………………………………………….. 65,678,614 22,895,280
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation………………………………………………………. 33,814,863 33,719,712
Impairment loss…………………………………………………… 6,005,000 -
Profit on sale of assets / vessel acquisition option…………………. - (1,064,023)
Amortization of below and above market acquired time charters…. (18,618,699) (5,272,801)
Amortization of financing costs……………………………………. 970,327 907,310
Gain on vessel early redelivery……….…...………………………. (549,019) -
Share based compensation………………………………………… 3,101,690 10,687,663
Unrealized gain on interest rate swaps…………………………….. (3,367,354) (2,872,337)
Changes in assets and liabilities
Trade receivables (net)…………………………………………….. (1,814,074) 1,099,735
Other receivables………………………………………………….. (1,024,579) 769,758
Prepaid expenses………………………………………………….. (85,664) (63,671)
Inventories………………………………………………………… (407,992) (144,996)
Due from management company………………………………….. (245,919) (347,313)
Other long term receivables……………………………………….. (893,800) 968,560
Trade accounts payable…………………………………………… (638,818) (12,010)
Accrued expenses………………………………………………… (1,952,758) 122,423
Deferred income………………………………………………….. 434,936 (779,489)
Net cash from operating activities 80,406,754 60,613,801
Cash flow from Investing Activities
Net proceeds from sale of assets / vessel acquisition option………. - 41,556,934
Acquisition of vessels and capital expenditures…..………………… - (146,551,672)
Payments for vessels under construction…………………………… - (58,460,129)
Other fixed assets…………..……………………………………… - (206,246)
Release of restricted cash.…………………………………………. - 23,010,000
Increase in restricted cash..………………………………………… (40,500,000) (1,500,000)
Net cash used in investing activities (40,500,000) (142,151,113)
Cash flows from financing activities
Proceeds from long-term debt……………………………………… 30,000,000 70,000,000
Repayment of long-term debt………………………………………. (83,150,000) (86,500,000)
Payment of financing costs………………………………………… (292,563) (1,648,201)
Proceeds from the issuance of Class A common shares (net)……… 87,025,880 10,927,726
Dividends paid……………………………………………………… (7,971,645) (10,414,456)
Net cash from / (used in) financing activities 25,611,672 (17,634,931)
Net increase / (decrease) in cash and cash equivalents 65,518,426 (99,172,243)
Cash and cash equivalents at the beginning of the period 68,441,752 133,960,178
Cash and cash equivalents at the end of the period 133,960,178 34,787,935
Supplemental disclosure of cash flow information
Cash paid during the period for interest…………………………….. 11,961,768 8,745,571
Non cash financing activities………………..……………………… 270,353 167,737