Euroseas Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2015 and Sets Record Date for Its Shareholders Rights Offering

MAROUSSI, ATHENS, GREECE--(Marketwired - Aug 11, 2015) - 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 period ended June 30, 2015 as well as certain fleet updates.

Second Quarter 2015 Highlights:

• Total net revenues of $9.4 million. Net loss of $3.3 million; net loss attributable to common shareholders (after a $0.4 million of dividend on Series B Preferred Shares) of $3.7 million or $0.64² loss per share basic and diluted. Adjusted net loss attributable to common shareholders¹ for the period was $0.65² per share basic and diluted.
  
  
• Adjusted EBITDA(1) was $(0.1) million.
  
  
• An average of 15.0 vessels were owned and operated during the second quarter of 2015 earning an average time charter equivalent rate of $7,127 per day.
  
  
• The Company declared its sixth dividend of $0.4 million on its Series B Preferred Shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.
  
  

First Half 2015 Highlights:

• Total net revenues of $17.6 million. Net loss of $8.7 million; net loss attributable to common shareholders (after a $0.8 million of dividend on Series B Preferred Shares) of $9.5 million or $1.64² loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders¹ for the period was $1.62².
  
  
• Adjusted EBITDA¹ was $(1.9) million.
  
  
• An average of 15.0 vessels were owned and operated during the first half of 2015 earning an average time charter equivalent rate of $6,823 per day.
  
  

¹ Adjusted EBITDA, Adjusted net loss, Adjusted net loss attributable to common shareholders and Adjusted loss per share attributable to common shareholders 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.
² On July 23, 2015, the Company completed a 1-for-10 reverse stock split, effective at the close of trading on July 22, 2015. As a result all the per-share computations for the current and previous period presented herein are all based on the new number of shares after the reverse stock split.

Shareholders' Rights Offering

The Company's board of directors has determined that the record date for the previously announced rights offering will be August 14, 2015. Subject to receiving timely approval of the registration statement that the Company has filed with the SEC in connection with the rights offering, the Company expects to begin the rights offering and mail the pertinent information to its shareholders on August 24, 2015. The rights offering will be made pursuant to a prospectus, which will contain all of the terms of the offering as well as instructions on the exercise process.

Aristides Pittas, Chairman and CEO of Euroseas commented: "We were pleased to see a recovery of the containership market during the second quarter of this year, which allowed us to re-charter several of our containerships at levels that generate positive cash flows. Furthermore, late in the quarter and during the month of July, drybulk rates also improved. While the near term supply/demand balance is challenging, especially, for the drybulk market, these rate increases took place at periods with traditionally seasonally low rates and may be an indication of a better overall rate environment. We have adjusted our chartering strategy to take advantage of charter opportunities and charter a couple of our vessels for one year periods. At the same time we are pursuing our strategy to expand and renew our drybulk fleet by taking delivery of our four bulkers currently under construction. We have decided to proceed with a shareholders' rights offering to raise between $10-20m to ensure that we have access to sufficient equity and debt to finance the remaining portion of our newbuilding program, even under a poor market scenario. As always maintaining a strong balance sheet even at adverse periods remains our priority and the rights offering which provides our existing shareholders including our family the opportunity to participate in setting the foundations for the company's further growth was deemed as the best way to reward shareholder loyalty."

Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the second quarter of 2015 reflect the still low but improved levels of the containership and drybulk markets compared to the same quarter of 2014.

"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,145 per vessel per day during the second quarter of 2015 as compared to $6,449 per vessel per day for the same quarter of last year, and $6,342 per vessel per day for the first half of 2015 as compared to $6,398 per vessel per day for the same period of 2014, reflecting a 4.7% and 0.9% decline, respectively. As always, we want to emphasize that cost control remains a key component of our strategy.

"As of June 30, 2015, our outstanding debt was $49.8 million versus restricted and unrestricted cash of about $21.2 million. As of the same date, our scheduled debt repayments over the next 12 months amount to about $18.6 million, inclusive of about $8.8 million of balloon repayments which may be refinanced. All our debt covenants are satisfied."

Second Quarter 2015 Results:
For the second quarter of 2015, the Company reported total net revenues of $9.4 million representing a 2.8% decrease over total net revenues of $9.6 million during the second quarter of 2014. The Company reported net loss for the period of $3.3 million and a net loss attributable to common shareholders of $3.7 million, as compared to net loss of $5.0 million and $5.4 million respectively, for the second quarter of 2014. The results for the second quarter of 2015 include a $0.1 million unrealized gain on derivatives, a $0.1 million realized loss on derivatives, as compared to $0.2 million unrealized gain on derivatives, a $0.2 million realized loss on derivatives for the same period of 2014. Drydocking expenses amounted to $0.4 million during the second quarter of the year 2015 as three vessels underwent in-water surveys (in lieu of drydock) compared to three vessels that underwent drydocking during the second quarter of 2014 for a total amount of $1.3 million. Depreciation expenses for the second quarter of 2015 were $2.9 million compared to $3.0 million during the same period of 2014. On average, 15.0 vessels were owned and operated during the second quarter of 2015 earning an average time charter equivalent rate of $7,127 per day compared to 14.4 vessels in the same period of 2014 earning on average $7,373 per day. 

Adjusted EBITDA for the second quarter of 2015 was $(0.1) million compared to $(1.6) million achieved during the second quarter of 2014. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share attributable to common shareholders for the second quarter of 2015 was $0.64² calculated on 5,784,025² basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.95² for the second quarter of 2014, calculated on 5,688,812² basic and diluted weighted average number of shares outstanding. 

Excluding the effect, on the loss attributable to common shareholders, for the quarter of the unrealized gain on derivatives and the realized loss on derivatives, the adjusted net loss per share attributable to common shareholders for the quarter ended June 30, 2015 would have been $0.65² per share basic and diluted compared to net loss of $0.94² per share basic and diluted for the quarter ended June 30, 2014. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Half 2015 Results:
For the first half of 2015, the Company reported total net revenues of $17.6 million representing a 8.3% decrease over total net revenues of $19.1 million during the first half of 2014. The Company reported a net loss for the period of $8.7 million and a net loss attributable to common shareholders of $9.5, as compared to net loss of $7.2 million and $7.9 million respectively, for the first half of 2014. The results for the first half of 2015 include a $0.04 unrealized loss on derivatives, a $0.1 million realized loss on derivatives as compared to $0.3 million unrealized gain on derivatives, a $0.4 million realized loss on derivatives for the same period of 2014. Depreciation expenses for the first half of 2015 were $5.8 million compared to $5.8 million during the same period of 2014. On average, 15.0 vessels were owned and operated during the first half of 2015 earning an average time charter equivalent rate of $6,823 per day compared to 14.2 vessels in the same period of 2014 earning on average $7,585 per day. 

Adjusted EBITDA for the first half of 2015 was $(1.9) million compared to $(0.6) million achieved during the first half of 2014. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share attributable to common shareholders for the first half of 2015 was $1.64² respectively, calculated on 5,784,025² basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $1.5² for the first half of 2014, calculated on 5,244,685² basic and diluted weighted average number of shares outstanding. 

Excluding the effect, on the loss attributable to common shareholders, for the first half of 2015 of the unrealized loss on derivatives, realized loss on derivatives, the adjusted net loss per share attributable to common shareholders for the six-month period ended June 30, 2015 would have been $1.62² compared to loss of $1.48² per share basic and diluted for the same period in 2014. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:
The Euroseas Ltd. fleet profile as of August 1, 2015 is as follows:

Name		Type		Dwt		TEU		Year Built		Employment		TCE Rate ($/day)
Dry Bulk Vessels
Vessels in the water
EIRINI P		Panamax		76,466				2004		TC 'til Nov-15		103% of average BPI 4TC
PANTELIS		Panamax		74,020				2000		TC 'til July-16		100.5% of average BPI 4TC
ELENI P		Panamax		72,119				1997		TC 'til Jan-16		97% of average BPI 4TC
ARISTIDES N.P.		Panamax		69,268				1993		TC 'till Sep-15		$8,500
MONICA P		Handymax		46,667				1998		TC 'til Sep-15		$9,500
Vessels under construction(*)
Hull Number YZJ 1116		Kamsarmax		82,000				2015		4 year TC starting at delivery + 1 year at charterer's option		$14,100 Option @  $14,350
Hull Number YZJ 1153		Kamsarmax		82,000				2016		N/A
Hull Number DY 160		Ultramax		63,500				2015		N/A
Hull Number DY 161		Ultramax		63,500				2016		N/A
Total Dry Bulk Vessels		9		629,540
Container Carriers
EVRIDIKI G		Intermediate		34,677		2,556		2001		TC 'till Feb-16		$13,500
TIGER BRIDGE		Intermediate		31,627		2,228		1990		TC 'til Oct -15		$7,500
AGGELIKI P		Intermediate		30,360		2,008		1998		TC 'til Sep-15		$9,800
DESPINA P		Handy size		33,667		1,932		1990		TC 'til Nov-15		$9,500
CAPTAIN COSTAS		Handy size		30,007		1,742		1992		TC 'till Aug 16,2015, then open		$7,750 -
JOANNA		Handy size		22,301		1,732		1999		TC 'till Sep-15		$10,450
MARINOS		Handy size		23,596		1,599		1993		TC 'till Oct-15		$11,200
MANOLIS P		Handy size		20,346		1,452		1995		TC 'till Nov-15		$7,300
NINOS		Feeder		18,253		1,169		1990		TC 'til Jul-16		$11,500
KUO HSIUNG		Feeder		18,154		1,169		1993		TC 'til Nov-15		$10,000
Total Container Carriers		10		262,988		17,587
Fleet Grand Total		19		892,528		17,587

Note: (*) Vessels are scheduled to be delivered in the fourth quarter of 2015 (one Ultramax and one Kamsarmax), the first quarter of 2016 (the second Ultramax) and the fourth quarter of 2016 (the second Kamsarmax). It is expected that all vessels will be delivered in 2016.

Summary Fleet Data:

		3 months, ended June 30, 2014		3 months, ended June 30, 2015		6 months, ended June 30, 2014		6 months, ended June 30, 2015
FLEET DATA
Average number of vessels (1)		14.40		15.00		14.20		15.00
Calendar days for fleet (2)		1,310		1,365		2,570		2,715
Scheduled off-hire days incl. laid-up (3)		64.25		20.48		64.25		47.08
Available days for fleet (4) = (2) - (3)		1,246		1,345		2,506		2,668
Commercial off-hire days (5)		6.67		21.14		6.67		91.14
Operational off-hire days (6)		3.66		1.92		5.94		3.62
Voyage days for fleet (7) = (4) - (5) - (6)		1,235		1,321		2,493		2,573
Fleet utilization (8) = (7) / (4)		99.2%		98.3%		99.5%		96.4%
Fleet utilization, commercial (9) = ((4) - (5)) / (4)		99.5%		98.4%		99.7%		96.6%
Fleet utilization, operational (10) = ((4) - (6)) / (4)		99.7%		99.9%		99.8%		99.9%
AVERAGE DAILY RESULTS
Time charter equivalent rate (11)		7,373		7,127		7,585		6,823
Vessel operating expenses excl. drydocking expenses (12)		5,708		5,563		5,628		5,711
General and administrative expenses (13)		741		582		771		631
Total vessel operating expenses (14)		6,449		6,145		6,398		6,342
Drydocking expenses (15)		982		324		525		365

(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.

(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. We use available days to measure the number of days in a period during which vessels were available to generate revenues.

(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 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. 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:
As announced, tomorrow, Wednesday, August 12, 2015 at 9:00 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 (international standard dial in). Please quote "Euroseas".

A replay of the conference call will be available until August 19, 2015. 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: 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 2015 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.

Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars - except number of shares)
		Three Months Ended June 30,			Three Months Ended June 30,			Six Months Ended June 30,			Six Months Ended June 30,
		2014			2015			2014			2015
		(unaudited)			(unaudited)
Revenues
Voyage revenue		10,081,816			9,846,372			20,048,813			18,474,782
Related party revenue		60,000			60,000			120,000			120,000
Commissions		(502,688	)		(537,786	)		(1,030,826	)		(1,044,290	)
Net revenues		9,639,128			9,368,586			19,137,987			17,550,492
Operating expenses
Voyage expenses		1,002,655			432,570			1,138,951			918,433
Vessel operating expenses		6,238,260			6,545,949			12,036,879			13,384,584
Drydocking expenses		1,286,807			442,758			1,372,211			989,309
Depreciation		2,972,497			2,890,476			5,825,417			5,780,952
Management fees		1,238,792			1,047,540			2,430,598			2,122,035
Other general and administrative expenses		970,903			794,144			1,978,792			1,712,085
Total operating expenses		13,709,914			12,153,437			24,782,848			24,907,398
Operating loss		(4,070,786	)		(2,784,851	)		(5,644,861	)		(7,356,906	)
Other income/(expenses)
Interest and finance cost		(487,781	)		(363,848	)		(957,923	)		(849,384	)
(Loss) / gain on derivatives, net		(54,211	)		38,539			(95,865	)		(165,272	)
Other investment income		237,500			282,625			475,000			565,250
Foreign exchange gain / (loss)		(702	)		(2,188	)		404			33,462
Interest income		145,653			4,233			255,269			22,205
Other (expenses) / income, net		(159,541	)		(40,639	)		(323,115	)		(393,739	)
Equity loss in joint venture		(786,770	)		(476,658	)		(1,262,204	)		(955,540	)
Net loss		(5,017,097	)		(3,302,148	)		(7,230,180	)		(8,706,185	)
Dividend Series B Preferred shares		(387,055	)		(406,773	)		(651,416	)		(808,524	)
Net loss attributable to common shareholders		(5,404,152	)		(3,708,921	)		(7,881,596	)		(9,514,709	)
Loss per share, basic and diluted		(0.95	)		(0.64	)		(1.50	)		(1.64	)
Weighted average number of shares, basic and diluted		5,688,812			5,784,025			5,244,685			5,784,025

Euroseas Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars - except number of shares)
			December 31, 2014			June 30, 2015
ASSETS			(unaudited)
Current Assets:
	Cash and cash equivalents		25,411,420			15,667,761
	Trade accounts receivable		2,189,986			1,204,115
	Other receivables, net		844,720			679,497
	Inventories		1,758,930			1,463,280
	Restricted cash		294,093			291,962
	Prepaid expenses		348,231			456,380
Total current assets			30,847,380			19,762,995
Fixed assets:
	Vessels, net		111,150,227			105,369,275
	Advances for vessels under construction		15,687,490			22,428,693
Long-term assets:
	Restricted cash		7,700,000			5,200,000
	Deferred charges, net		335,621			673,293
	Other Investments		6,183,800			6,749,050
	Investment in joint venture		18,674,094			17,718,554
Total long-term assets			159,731,232			158,138,865
Total assets			190,578,612			177,901,860
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Long term debt, current portion		19,512,000			18,556,000
	Trade accounts payable and accrued expenses		3,430,780			4,298,698
	Deferred revenue		803,649			730,889
	Due to related company		1,145,808			558,069
	Derivatives		297,992			147,388
Total current liabilities			25,190,229			24,291,044
Long-term liabilities:
	Long term debt, net of current portion		34,745,000			31,265,000
	Derivatives		779			187,328
Total long-term liabilities			34,745,779			31,452,328
Total liabilities			59,936,008			55,743,372
Mezzanine equity:
	Series B Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 32,140 and 32,949 shares issued and outstanding, respectively)		30,440,100			31,248,624
Shareholders' equity:
	Common stock (par value $0.03, 200,000,000 shares authorized, 5,715,731 and 5,784,025 issued and outstanding)		171,472			173,521
	Additional paid-in capital		268,374,336			268,594,355
	Accumulated deficit		(168,343,304	)		(177,858,012	)
Total shareholders' equity			100,202,504			90,909,864
Total liabilities and shareholders' equity			190,578,612			177,901,860

Euroseas Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)
		Six Months Ended June 30,			Six Months Ended June 30,
		2014			2015
Cash flows from operating activities:
Net loss		(7,230,180	)		(8,706,185	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of vessels		5,825,417			5,780,952
Amortization of deferred charges		61,978			75,052
Loss in investment in joint venture		1,262,204			955,540
Share-based compensation		286,468			222,068
Unrealized (gain) / loss on derivatives		(341,902	)		35,945
Other investment income accrued		(475,000	)		(565,250	)
Changes in operating assets and liabilities		3,541,086			1,406,873
Net cash provided by / (used in) operating activities		2,930,071			(795,005	)
Cash flows from investing activities:
Vessel acquisition and advances for vessels under construction		(33,230,898	)		(6,741,203	)
Change in restricted cash		(131,644	)		2,502,131
Net cash used in investing activities		(33,362,542	)		(4,239,072	)
Cash flows from financing activities:
Proceeds from issuance of common stocks, net		14,550,000			-
Proceeds from issuance of preferred stocks, net		29,700,000			-
Loan fees paid		(260,000	)		(245,300	)
Offering expenses paid		(366,857	)		(28,282	)
Proceeds from long term debt		23,300,000			5,000,000
Repayment of long-term debt		(9,506,000	)		(9,436,000	)
Net cash provided by / (used in) financing activities		57,417,143			(4,709,582	)
Net increase / (decrease) in cash and cash equivalents		26,984,672			(9,743,659	)
Cash and cash equivalents at beginning of period		11,400,237			25,411,420
Cash and cash equivalents at end of period		38,384,909			15,667,761

Euroseas Ltd.
Reconciliation of Adjusted EBITDA to
Net loss and Cash Flow Provided By (Used In) Operating Activities
(All amounts expressed in U.S. Dollars)
		Three Months Ended June 30, 2014			Three Months Ended June 30, 2015			Six Months Ended June 30, 2014			Six Months Ended June 30, 2015
Net loss		(5,017,097	)		(3,302,148	)		(7,230,180	)		(8,706,185	)
Interest and finance costs, net (incl. interest income)		342,128			359,615			702,654			827,179
Depreciation		2,972,497			2,890,476			5,825,417			5,780,952
Unrealized and realized loss / (gain) on derivatives, net		54,211			(38,539	)		95,865			165,272
Adjusted EBITDA		(1,648,261	)		(90,596	)		(606,244	)		(1,932,782	)

		Three Months Ended June 30, 2014			Three Months Ended June 30, 2015			Six Months Ended June 30, 2014			Six Months Ended June 30, 2015
Net cash flow provided by / (used in) operating activities		3,164,759			666,233			2,930,071			(795,005	)
Changes in operating assets / liabilities		(4,651,269	)		(818,501	)		(3,541,086	)		(1,406,873	)
Loss on derivatives (realized)		216,946			50,845			437,767			129,327
Equity loss in joint venture and Other investment income, net		(549,270	)		(194,033	)		(787,204	)		(390,290	)
Share-based compensation		(140,428	)		(117,229	)		(286,468	)		(222,068	)
Interest, net		311,001			322,089			640,676			752,127
Adjusted EBITDA		(1,648,261	)		(90,596	)		(606,244	)		(1,932,782	)

Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings / (loss) before interest, income taxes, depreciation, amortization, gain / loss in derivatives. Adjusted EBITDA does not represent and should not be considered as an alternative to net income /(loss) or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and the Company's 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 the Company assesses its financial performance and liquidity position and because the Company believes 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.

Euroseas Ltd.
Reconciliation of Net loss to Adjusted net loss
(All amounts expressed in U.S. Dollars - except share data and number of shares)
		Three Months Ended June 30, 2014			Three Months Ended June 30, 2015			Six Months Ended June 30, 2014			Six Months Ended June 30, 2015
Net loss		(5,017,097	)		(3,302,148	)		(7,230,180	)		(8,706,185	)
Unrealized (gain) / loss on derivatives		(162,735	)		(89,384	)		(341,902	)		35,945
Realized loss on derivatives		216,946			50,845			437,767			129,327
Adjusted net loss		(4,962,886	)		(3,340,687	)		(7,134,315	)		(8,540,913	)
Preferred dividends		(387,055	)		(406,773	)		(651,416	)		(808,524	)
Adjusted net loss attributable to common shareholders		(5,349,941	)		(3,747,460	)		(7,785,731	)		(9,349,437	)
Adjusted net loss per share, basic and diluted		(0.94	)		(0.65	)		(1.48	)		(1.62	)
Weighted average number of shares, basic and diluted		5,688,812			5,784,025			5,244,685			5,784,025

"Adjusted net loss" and "Adjusted net loss per share" Reconciliation:

Euroseas Ltd. considers "Adjusted net loss" to represent net loss before gain / loss on derivatives. "Adjusted net loss" and "Adjusted net loss 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 on derivatives, which items may significantly affect results of operations between periods.

"Adjusted Net loss" and "Adjusted net loss per share" do not represent and should not be considered as an alternative to net loss or loss per share, as determined by U.S. GAAP, The Company's definition of "Adjusted net loss" and "Adjusted net 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, 5 Handysize containerships, 2 Feeder containerships. Euroseas` 5 drybulk carriers have a total cargo capacity of 338,540 dwt, its 10 containerships have a cargo capacity of 17,587 teu. The Company has also signed contracts for the construction of two Ultramax (63,500 dwt) fuel efficient drybulk carriers and two Kamsarmax (82,000 dwt) fuel efficient drybulk carriers. Including the four new-buildings, the total cargo capacity of the Company's drybulk vessels will be 629,540 dwt.

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.

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