Paragon Shipping Inc. (PRGN)
Q2 2012 Results Earnings Call
August 23, 2012 9:00 AM ET
Rudy Barrio - Allen & Caron, IR
Anastassis Gabrielides - Attorney
Michael Bodouroglou - Chairman and CEO
Noah Parquette - Global Hunter Securities
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Good morning. And welcome to the Paragon Shipping Second Quarter 2012 Conference Call. All participants will be in a listen-only mode. (Operator Instructions) After today’s presentation there will be an opportunity to ask questions. (Operator Instructions)
Please note this event is being recorded. I would now like to turn the conference over to Rudy Barrio of Allen & Caron, Investor Relations. Please go ahead.
Thank you, Emily. Good day, everyone. And welcome to Paragon Shipping’s investor conference call to discuss its financial results for the company’s second quarter ended June 30, 2012. Presenting this morning is [Anastassis Gabrielides] of Paragon Shipping.
Before we start the call there are couple of items I would like to cover. Many of you received a copy of Paragon Shipping’s earnings result press release. It was disseminated earlier today.
If you did not receive a copy of the press release it is posted on Paragon Shipping’s website at www.paragonship.com and the Investor Relations section of our website at www.allencaron.com. It is also posted on Yahoo! Finance and most financial sites. You may also call our office in New York at 212-691-8087 and we will email it to you.
As mentioned earlier, this call is being recorded. A replay will be available shortly after the call for eight days and maybe access from North America by calling 877-344-7529 and entering passcode 10017773. International callers should dial 412-317-0088. This call is also being broadcast live over the internet and maybe accessed via Paragon Shipping’s website. A replay of the webcast will be available shortly after the call and will continue for eight days as well.
Further, we would like to remind everyone of the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Some of the statements made during this call may contain forward-looking statements. The company’s actual results may differ materially from such statements.
We advise you to read the cautionary note regarding forward-looking statements in Paragon’s recent earnings release and in the Risk Factors section of the company’s most recent filings with the Securities and Exchange Commission, all of which are available at www.sec.gov.
I would now like to turn the call over to Anastassis Gabrielides. Good day, Anastassis.
Good day, Rudy, and good day to you ladies and gentlemen. And welcome to Paragon’s earnings conference call for the second quarter and six months ended June 30, 2012. We shall start our presentation with our financial highlights. We will then update you on the latest company developments since our last conference call, as well as on our views on the drybulk industry.
We will then proceed with a quick analysis of our financial results and will conclude with a brief summary. After the presentation, Michael Bodouroglou, the Chairman and CEO of our company and myself will be available to answer any questions.
Please turn to slide four. This slide presents Paragon’s financials highlight for the second quarter and first half of 2012. During the second quarter of 2012, we operated an average of 10.8 vessels, compared to 11.8 vessels during the year ago period.
This decrease in the number of vessels relates to the sale of the Box Voyager, the Box Trader and the CMA CGM Kingfish to Box Ships, as well as the sale of the Crystal Seas to a non-related third-party in 2011. This decrease is offset by the delivery of our first newbuilding vessels, the Prosperous Seas and the Precious Seas in the second quarter of 2012.
Our net revenue from the second quarter of 2012 was $11.9 million, down from $23.6 million in the year ago period, due to the renewal of several of our time charters at lower rates.
Our EBITDA for the quarter was $6.3 million, while we reported net income of $0.2 million. When these results are adjusted for non-cash items, our adjusted EBITDA was $6.6 million and our adjusted net income was $0.5 million or about $0.01 per share.
Slide five provides an overview of the length of the remaining charter period for each of our vessels. Full details of the charter for our fleet can be found under the Appendix section of this presentation, based on latest delivery dates, our fixed revenue days currently stand at 97% in 2012, 69% in 2013 and 35% in 2013 -- ‘14. Overall, the average remaining term of our charters is 1.9 years.
As of June 30th, after taking into consideration, all recent developments and based on latest delivery dates, while excluding of holidays due to second scheduled drydockings, we have secured time charter revenues of approximately $58 million, out of which $24 million is scheduled for the current year 2012.
On slide six, we present some remarks on our leverage. Currently, our total debt stands at $207 million, while our cash position stands at $23 million. This translates into net debt of $184 million, representing a moderate 58% net debt to total capitalization.
The continue market downturn, which has been more severe than anticipated has further depressed vessel prices and has impacted our rechartering rates. As of June 30, 2012, we are not in compliance with the EBITDA coverage ratio covenant contained in one of our loan agreements and the security cover ratio contained in four of our loan agreements.