Euroseas Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2012

News Release Euroseas Ltd. August 8, 2012

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<DIV align=justify>08/8/12 Maroussi, Athens, Greece -
August 8, 2012 - Euroseas Ltd. (NASDAQ: ESEA), an owner
and operator of drybulk and container carrier vessels
and provider of seaborne transportation for drybulk and
containerized cargoes, announced today its results for
the three and six month periods ended June 30, 2012.
 Second Quarter 2012 Highlights: -
Net loss of $1.4 million or $0.04 loss per share basic
and diluted on total net revenues of $12.8 million.
Adjusted net loss1 for the period would have also been
$1.3 million, or $0.04 loss per share, basic and
diluted. - Adjusted EBITDA1 was $3.4 million.
 - An average of 15.00 vessels were owned and
operated during the second quarter of 2012 earning an
average time charter equivalent rate of $9,757 per day.
 - Declared a quarterly dividend of $0.02 per
share for the second quarter of 2012 payable on or about
September 7, 2012 to shareholders of record on August
31, 2012. This is the twenty-eighth consecutive
quarterly dividend declared. First Half 2012
Highlights: - Net loss of $10.4 million or
$0.32 loss per share basic and diluted on total net
revenues of $26.7 million. Adjusted net loss1 for the
period would have been $1.4 million, or $0.04 loss per
share basic and diluted. - Adjusted EBITDA1 was
$8.3 million. - An average of 15.42 vessels were
owned and operated during the first half of 2012 earning
an average time charter equivalent rate of $10,431 per
day. - Declared two quarterly dividends for a
total of $0.06 per share during the first half of 2012
 1 Adjusted EBITDA, Adjusted net loss
and Adjusted loss per share are not recognized
measurements under GAAP. Refer to a subsequent section
of the Press Release for the definitions and
reconciliation of these measurements to the most
directly comparable financial measures calculated and
presented in accordance with U.S. GAAP.
 Aristides Pittas, Chairman and CEO of
Euroseas, commented: "During the first half of 2012,
the containership market remained depressed for the size
of vessels we operate and stayed very close to the very
low levels last seen in the beginning of 2010. On the
drybulk side, although the market is also depressed, our
fleet of 5 vessels is fully chartered at above market
rates on average throughout 2012 and well into 2013,
positively contributing to our earnings. "We
anticipate an uncertain market environment heavily
influenced by world-wide economic developments. We have
been positioning Euroseas to be able to deal with any
adverse developments, like a protracted market downturn,
while at the same time give us the ability of
capitalizing on investment opportunities that might
appear. In this regard, we completed a shareholders'
rights offering that provided us with approximately an
additional $15.0 million of cash which increased our
cash position close to more than $48 million as of June
30, 2012. "On the investment front, we continue
monitoring investment possibilities in the containership
and drybulk sectors. We expect to see very attractive
opportunities over the next 12 months in both of the
above sectors. "While we remain very cautious
regarding the markets over the next 12-18 months, we are
optimistic about the prospects of Euroseas because of
our low leverage, strong balance sheet and cost
efficient operations. In that spirit, our Board decided
to declare a quarterly dividend of $0.02 per share
taking into account the higher share count after the
rights offering which represents an annual yield of
about 6.8% on the basis of our stock price on August 7,
2012." Tasos Aslidis, Chief Financial Officer
of Euroseas, commented: "The results of the second
quarter of 2012 mainly reflect the depressed level of
the containership market compared to the same quarter of
2011 and the lower number of vessels we operated.
 "Total daily vessel operating expenses,
including management fees, general and administrative
expenses but excluding drydocking costs, averaged $6,072
per vessel per day during the second quarter of 2012 as
compared to $6,066 per vessel per day for the same
quarter of last year, and $6,029 per vessel per day for
the first half of 2012 as compared to $6,002 per vessel
per day for the same period of 2011, reflecting a nearly
zero increase. As always, we want to emphasize that cost
control remains a key component of our strategy.
 "As of June 30, 2012, our outstanding debt was
$67.1 million versus restricted and unrestricted cash of
about $48.2 million. As of the same date, our scheduled
debt repayments over the next 12 months amounted to
about $13.0 million a number low enough to provide us
with significant operational cash flow comfort. All our
debt covenants are satisfied. Second Quarter
2012 Results: For the second quarter of 2012,
the Company reported total net revenues of $12.8 million
representing a 17.9% decrease over total net revenues of
$15.6 million during the second quarter of 2011. The
Company reported net loss for the period of $1.4 million
as compared to income of $0.0 million for the second
quarter of 2011. The results for the second quarter of
2012 include a $0.3 million net unrealized gain on
derivatives and a $0.4 million net realized loss on
derivatives as compared to $0.6 million net unrealized
loss on derivatives and trading securities and $0.2
million realized loss on derivatives for the same period
of 2011. Depreciation expenses for the second
quarter of 2012 were $4.3 million compared to $4.6
million during the same period of 2011. On average,
15.00 vessels were owned and operated during the second
quarter of 2012 earning an average time charter
equivalent rate of $9,757 per day compared to 16.00
vessels in the same period of 2011 earning on average
$11,302 per day. Adjusted EBITDA for the second
quarter of 2012 was $3.4 million, compared to $5.0
million achieved during the second quarter of 2011.
Please see below for Adjusted EBITDA reconciliation to
net income / loss and cash flow provided by operating
activities. Basic and diluted loss per share for
the second quarter of 2012 was $0.04, calculated on
33,206,325 basic and diluted weighted average number of
shares outstanding, compared to basic and diluted
earnings per share of $0.00 for the second quarter of
2011, calculated on 31,741,359 basic and 31,858,740
diluted weighted average number of shares outstanding,
respectively. Excluding the effect on the
earnings for the quarter of the unrealized gain on
derivatives and the realized loss on derivatives, the
adjusted loss per share for the quarter ended June 30,
2012 would have remained unchanged at $0.04 loss per
share basic and diluted, compared to net income of $0.00
per share basic and diluted for the quarter ended June
30, 2011. Usually, security analysts do not include the
above items in their published estimates of earnings per
share. First Half 2012
Results: For the first half of 2012, the
Company reported total net revenues of $26.7 million
representing a 10.4% decrease over total net revenues of
$29.8 million during the first half of 2011. The Company
reported a net loss for the period of $10.4 million as
compared to net loss of $0.6 million for the first half
of 2011. The results for the first half of 2012 include
a $0.4 million net unrealized gain on derivatives and
trading securities, a $0.8 million net realized loss on
derivatives and a $8.6 million loss on sale of a vessel
as compared to a $0.1 million net unrealized loss on
derivatives and trading securities and $0.4 million
realized loss on derivatives for the same period of
2011. Depreciation expenses for the first half
of 2012 were $8.8 million compared to $9.2 million
during the same period of 2011. On average, 15.42
vessels were owned and operated during the first half of
2012 earning an average time charter equivalent rate of
$10,431 per day compared to 16.00 vessels in the same
period of 2011 earning on average $11,198 per day.
 Adjusted EBITDA for the first half of 2012 was
$8.3 million, a 4.6% decrease from $8.7 million achieved
during the first half of 2011. Please see below for
Adjusted EBITDA reconciliation to net income/loss and
cash flow provided by operating activities.
 Basic and diluted loss per share for the first
half of 2012 was $0.32 calculated on 32,558,052 weighted
average number of shares outstanding, compared to basic
and diluted loss per share of $0.02 for the first half
of 2011, calculated on 31,741,359 basic and diluted
weighted average number of shares outstanding.
 Excluding the effect on the losses for the first
half of 2012 of the unrealized loss on derivatives,
realized loss on derivatives, realized gain on trading
securities and loss on sale of vessel, the adjusted loss
per share for the six-month period ended June 30, 2012
would have been $0.04 per share basic and diluted
compared to loss of $0.04 per share basic and diluted
for the same period in 2011. Usually, security analysts
do not include the above items in their published
estimates of earnings per share. Fleet
Profile: The Euroseas Ltd. fleet profile is as
follows: <IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812a.gif">
 Summary Fleet Data: <IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812b.gif">
 (1) Average number of vessels is the number of
vessels that constituted our fleet for the relevant
period, as measured by the sum of the number of calendar
days each vessel was a part of our fleet during the
period divided by the number of calendar days in that
period. (2) Calendar days. We define calendar
days as the total number of days in a period during
which each vessel in our fleet was in our possession
including off-hire days associated with major repairs,
drydockings or special or intermediate surveys or days
of vessels in lay-up. Calendar days are an indicator of
the size of our fleet over a period and affect both the
amount of revenues and the amount of expenses that we
record during that period. (3) The scheduled
off-hire days including vessels laid-up are days
associated with scheduled repairs, drydockings or
special or intermediate surveys or days of vessels in
lay-up. We use available days to measure the number of
days in a period during which vessels were available to
generate revenues. (4) Available days. We define
available days as the total number of days in a period
during which each vessel in our fleet was in our
possession net of scheduled off-hire days including days
of vessels laid-up. (5) Commercial off-hire
days. We define commercial off-hire days as days waiting
to find employment. (6) Operational off-hire
days. We define operational off-hire days as days
associated with unscheduled repairs or other off-hire
time related to the operation of the vessels,
 (7) Voyage days. We define voyage days as the
total number of days in a period during which each
vessel in our fleet was in our possession net of
commercial and operational off-hire days. We use voyage
days to measure the number of days in a period during
which vessels actually generate revenues. (8)
Fleet utilization. We calculate fleet utilization by
dividing the number of our voyage days during a period
by the number of our available days during that period.
We use fleet utilization to measure a company's
efficiency in finding suitable employment for its
vessels and minimizing the amount of days that its
vessels are off-hire for reasons such as unscheduled
repairs or days waiting to find employment. (9)
Fleet utilization, commercial. We calculate commercial
fleet utilization by dividing our available days net of
commercial off-hire days during a period by our
available days during that period. (10) Fleet
utilization, operational. We calculate operational fleet
utilization by dividing our available net of operational
off-hire days during a period by our available days
during that period. (11) Time charter
equivalent, or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis.
Our method of calculating TCE is consistent with
industry standards and is determined by dividing revenue
generated from voyage charters net of voyage expenses by
voyage days for the relevant time period. Voyage
expenses primarily consist of port, canal and fuel costs
that are unique to a particular voyage, which would
otherwise be paid by the charterer under a time charter
contract, as well as commissions. TCE is a standard
shipping industry performance measure used primarily to
compare period-to-period changes in a shipping company's
performance despite changes in the mix of charter types
(i.e., spot voyage charters, time charters and bareboat
charters) under which the vessels may be employed
between the periods. (12) Daily vessel operating
expenses, which includes crew costs, provisions, deck
and engine stores, lubricating oil, insurance,
maintenance and repairs and management fees are
calculated by dividing vessel operating expenses by
fleet calendar days for the relevant time period.
Drydocking expenses are reported separately.
 (13) Daily general and administrative expense is
calculated by dividing general and administrative
expense by fleet calendar days for the relevant time
period. (14) Total vessel operating expenses, or
TVOE, is a measure of our total expenses associated with
operating our vessels. TVOE is the sum of vessel
operating expenses excluding drydocking expenses and
general and administrative expenses. Daily TVOE is
calculated by dividing TVOE by fleet calendar days for
the relevant time period. (15) Drydocking
expenses, which include expenses during drydockings that
would have been capitalized and amortized under the
deferral method divided by the fleet calendar days for
the relevant period. Drydocking expenses could vary
substantially from period to period depending on how
many vessels underwent drydocking during the period.
 Conference Call and Webcast:
 Tomorrow, Thursday, August 9, 2012 at 9:30 a.m.
EDT, the company's management will host a conference
call to discuss the results. Conference Call
details: Participants should dial into the call
10 minutes before the scheduled time using the following
numbers: 1 866 819 7111 (from the US), 0800 953 0329
(from the UK) or +44 (0)1452 542 301 ( (from outside the
U.S.) Please quote "Euroseas". A recording of
the conference call will be available until August 16,
2012 by dialing 1 866 247 4222 (from the US), 0800 953
1533 (from the UK) or +44 (0)1452 550 000 (standard
international replay.) Access Code: 6973591#
 Audio webcast - Slides
Presentation: There will be a live and then
archived audio webcast of the conference call, via the
internet through the Euroseas website (www.euroseas.gr).
Participants to the live webcast should register on the
website approximately 10 minutes prior to the start of
the webcast. A slide presentation on the Second Quarter
and First Half 2012 results in PDF format will also be
available 30 minutes prior to the conference call and
webcast accessible on the company's website
(www.euroseas.gr) on the webcast page. Participants to
the webcast can download the PDF presentation.
 
<CENTER>Euroseas Ltd. Unaudited Condensed
Statements of Operations (All amounts expressed in
U.S. Dollars - except share
amounts) </CENTER><IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812c.gif">
 2 The earnings per share and the
weighted average number of shares, basic and diluted,
have been adjusted retroactively for all periods
presented to give effect to the bonus element of the
shares associated with the rights offering which expired
on June 15, 2012. 
<CENTER>Euroseas Ltd. Unaudited Condensed Balance
Sheets (All amounts expressed in U.S. Dollars -
except share amounts) </CENTER>
<CENTER><IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812d.gif"></CENTER> 
<CENTER>Euroseas Ltd. Unaudited Condensed
Statements of Cash Flows (All amounts expressed in
U.S. Dollars) </CENTER>
<CENTER><IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812e.gif"></CENTER> 
<CENTER>Euroseas Ltd. Reconciliation of Adjusted
EBITDA to Net Income / (loss) and Cash Flow Provided
By Operating Activities (All amounts expressed in
U.S. Dollars) </CENTER><IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812f.gif">
 Adjusted EBITDA
Reconciliation: Euroseas Ltd. considers Adjusted
EBITDA to represent net earnings before interest, income
taxes, depreciation, amortization, gain / loss in
derivatives, loss on sale of vessel, and amortization of
deferred revenues from above or below market time
charters acquired. Adjusted EBITDA does not represent
and should not be considered as an alternative to net
income or cash flow from operations, as determined by
United States generally accepted accounting principles,
or U.S. GAAP, and our calculation of Adjusted EBITDA may
not be comparable to that reported by other companies.
Adjusted EBITDA is included herein because it is a basis
upon which we assess our financial performance and
liquidity position and because we believe that it
presents useful information to investors regarding a
company's ability to service and/or incur indebtedness.
The Company's definition of Adjusted EBITDA may not be
the same as that used by other companies in the shipping
or other industries. 
<CENTER>Euroseas Ltd. Reconciliation of Net income
/ (loss) to Adjusted net income / (loss) (All
amounts expressed in U.S. Dollars - except share data
and per share amounts) </CENTER><IMG
src="http://www.capitallink.com/companies/greece/ppressimg/54354744/esea080812g.gif">
 Adjusted Net Income/(loss) and Adjusted Net
Income /(loss) per share Reconciliation: Euroseas
Ltd. considers Adjusted Net Income/(loss) to represent
net earnings before gain / loss in derivatives,
amortization of deferred revenues from above or below
market time charters acquired, unrealized gain/loss on
trading securities, and loss on sale of vessel. Adjusted
Net Income/(loss) and Adjusted Net Income /(loss)s per
share is included herein because we believe it assists
our management and investors by increasing the
comparability of the Company's fundamental performance
from period to period by excluding the potentially
disparate effects between periods of gain / loss in
derivatives, amortization of deferred revenues from
above or below market time charters acquired and
unrealized loss on trading securities, which items may
significantly affect results of operations between
periods. Adjusted Net Income/(loss) and Adjusted
Net Income /(loss) per share do not represent and should
not be considered as an alternative to net income/(loss)
or earnings/(loss) per share, as determined by U.S.
GAAP, The Company's definition of Adjusted Net
Income/(loss) and Adjusted Net Income /(loss) per share
may not be the same as that used by other companies in
the shipping or other industries About
Euroseas Ltd. Euroseas Ltd. was formed on May 5,
2005 under the laws of the Republic of the Marshall
Islands to consolidate the ship owning interests of the
Pittas family of Athens, Greece, which has been in the
shipping business over the past 136 years. Euroseas
trades on the NASDAQ Global Market under the ticker ESEA
since January 31, 2007. Euroseas operates in the
dry cargo, drybulk and container shipping markets.
Euroseas' operations are managed by Eurobulk Ltd., an
ISO 9001:2008 certified affiliated ship management
company, which is responsible for the day-to-day
commercial and technical management and operations of
the vessels. Euroseas employs its vessels on spot and
period charters and through pool arrangements.
 The Company has a fleet of 15 vessels, including
4 Panamax drybulk carriers and 1 Handymax drybulk
carrier, 3 Intermediate containership, 4 Handysize
containerships, 2 Feeder containerships and a
multipurpose dry cargo vessel. Euroseas` 5 drybulk
carriers have a total cargo capacity of 331,808 dwt, its
10 containerships have a cargo capacity of 15,855 teu
and its multipurpose vessel has a cargo capacity of
22,568 dwt or 950 teu. Forward Looking
Statement This press release contains
forward-looking statements (as defined in Section 27A of
the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended)
concerning future events and the Company's growth
strategy and measures to implement such strategy;
including expected vessel acquisitions and entering into
further time charters. Words such as "expects,"
"intends," "plans," "believes," "anticipates," "hopes,"
"estimates," and variations of such words and similar
expressions are intended to identify forward-looking
statements. Although the Company believes that the
expectations reflected in such forward-looking
statements are reasonable, no assurance can be given
that such expectations will prove to have been correct.
These statements involve known and unknown risks and are
based upon a number of assumptions and estimates that
are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of
the Company. Actual results may differ materially from
those expressed or implied by such forward-looking
statements. Factors that could cause actual results to
differ materially include, but are not limited to
changes in the demand for dry bulk vessels and container
ships, competitive factors in the market in which the
Company operates; risks associated with operations
outside the United States; and other factors listed from
time to time in the Company's filings with the
Securities and Exchange Commission. The Company
expressly disclaims any obligations or undertaking to
release publicly any updates or revisions to any
forward-looking statements contained herein to reflect
any change in the Company's expectations with respect
thereto or any change in events, conditions or
circumstances on which any statement is based.
 Visit our website www.euroseas.gr
 Company Contact Tasos Aslidis Chief
Financial Officer Euroseas Ltd. 11 Canterbury
Lane, Watchung, NJ 07069 Tel. (908)
301-9091 E-mail: aha@euroseas.gr Investor
Relations / Financial Media Nicolas
Bornozis President Capital Link, Inc. 230 Park
Avenue, Suite 1536 New York, NY 10169 Tel. (212)
661-7566 E-mail:
euroseas@capitallink.com</DIV></TD></TR>
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