This presentation summarizes Paragon Shipping Inc.'s earnings conference call for the second quarter and first six months of 2013. It includes highlights such as net revenue of $13.9 million for Q2 2013, EBITDA of $6.2 million for Q2 2013, and signing a $69 million credit facility with China Development Bank. It also provides an agenda, drybulk market overview, financial updates, and an investment summary emphasizing Paragon's financing, fleet growth, diversification, and positioning to take advantage of an expected market recovery in 2014.
2. Slide 2
This presentation contains certain statements that may be deemed to be “forward-looking statements”
within the meaning of the Securities Acts. Forward-looking statements reflect management's current
views with respect to future events and financial performance and may include statements concerning
plans, objectives, goals, strategies, future events or performance and underlying assumptions and other
statements, which are other than statements of historic facts. The forward-looking statements in this
presentation are based upon various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, managements' examination of historical operating trends,
data contained in our records and other data available from third parties. Although Paragon Shipping Inc.
believes 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, Paragon Shipping Inc. can not assure you that it will achieve or
accomplish these expectations, beliefs or projections. 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 the world economies and currencies, general market conditions, including changes in charter
hire rates and vessel values, changes in demand that may affect attitudes of time charterers to
scheduled and unscheduled drydockings, changes in our vessel operating expenses, including drydocking,
crewing and insurance costs, or actions taken by regulatory authorities, ability of our counterparties to
perform these obligations under sales agreements and charter contracts on a timely basis, potential
liability from future litigation, domestic and international political conditions, potential disruption of
shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are
further described in reports filed by Paragon Shipping Inc. with the Securities and Exchange Commission.
Forward Looking Statements
3. Slide 3
Agenda
2Q 2013 Highlights
Company Update
Drybulk Industry Overview
Financial Update
Investment Summary
4. Slide 4
Highlights - 2Q 2013
Financial Performance:
• Net Revenue: $13.9 m.
• EBITDA: $6.2 m.
• Net Income: $17,032
Signed a $69.0 m. credit facility with China Development Bank to partially
finance our two 4,800 TEU containerships currently under construction
Subsequent events:
In July 2013, we agreed with the charterer of the M/V Coral Seas and the M/V
Deep Seas on the vessels’ early redelivery for a total cash compensation of
$2.3 m.
On August 5, 2013, Box Ships prepaid an amount of $5.0 m. Currently, the
outstanding balance of the respective loan is $6.0 m.
5. Slide 5
1) Subject to certain conditions and contingencies
2) As of August 5, 2013
3) Including newbuilding deposits, KLC Shares, loan to Box Ships and M.V. adjusted investment in Box Ships
Leverage Ratio (2)
Financing Update
Cash (including restricted cash) $ 25 m
Total Debt $ 187 m
Net Debt $ 162 m
M.V. Adjusted Net Worth (3)
$ 106 m
Total Capitalization $ 268 m
Net Debt / Total Capitalization 60%
Leverage ratio of 60%
Financing of the Company’s outstanding newbuilding program:
• $25 million remaining under Nordea Facility (Hull no. 625)
• $69 million new credit facility with CDB (1) (Hull no. 656 & 657)
Scheduled Loan Repayments (USD Million)
191.9
188.3
184.7
181.1
3.6 3.6
0.8
2.8
3.6
$150
$160
$170
$180
$190
$200
$0
$2
$4
$6
$8
$10
Q113 Q213 Q313 Q413
Debt O/S Loan Repayments settled Loan Repayments O/S
6. Slide 6
Chartering Update
(1) Assumes earliest redelivery dates
Fixed Days Optional Period Open Days
NBs
Priceless Seas
OntheWater
Golden Seas
Calm Seas
Friendly Seas
Pearl Seas
Coral Seas
Deep Seas
Precious Seas
Fixed
Revenue Days ( 1) 37%
Hull No. 657
Proud Seas
Hull No. 656
0%0%4%
2016
Q1 Q2 Q3 Q4
2015
Q4Q2 Q3
Remainder
2013
Q3 Q1
2014
Q1 Q2Q4 Q1 Q4Q3
Kind Seas
Prosperous Seas
Sapphire Seas
Q2
Diamond Seas
Dream Seas
Spot exposure – significant upside potential
10. Slide 10
0
20
40
60
Remainder 2013 2014 2015+
Capesize Panamax Supramax Handysize
0%
25%
50%
75%
100%
0
200
400
600
800
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Global Fleet Orderbook Orderbook as a % of Global Fleet
Supply Fundamentals
Source: Clarkson’s Research
MillionDwt
Outstanding Orderbook by Vessel Type Global Fleet vs Orderbook
Drybulk orderbook is contracting – currently stands at 18% of existing fleet
Full year 2012: 99 million dwt delivered vs 34 million dwt scrapped (or 34%)
H113: 35 million dwt delivered vs 13 million dwt scrapped (or 37%)
MillionDwt
Deletions vs Newbuilding Deliveries
55 m
42 m
28 m
99
34
65
0
50
100
150
Full Year 2012
Deliveries Deletion Net Growth
11
4
7 5 5 3
35
3 3 2 2 2 2
13
8
1
5 4 3 2
22
0
10
20
30
40
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 H113
Deliveries Deletion Net Growth
11. Slide 11
Financial Performance – 2Q & First Half 2013
Q2 2013 Q2 2012 H1 2013 H1 2012
Average No. of Vessels 13.0 10.8 12.8 10.4
Time Charter Equivalent rate $ 10,476 $ 11,866 $ 10,930 $ 12,910
Fleet Utilization 100.0% 99.3% 99.9% 99.5%
Net Revenue $ 13.9 m $ 11.9 m $ 27.3 m $ 24.4 m
EBITDA $ 6.2 m $ 6.3 m $ 8.7 m $ 13.0 m
Adjusted EBITDA $ 6.1 m $ 6.6 m $ 9.3 m $ 13.7 m
Net Income / (Loss) $ 17,032 $ 0.2 m ($ 3.5 m) $ 0.9 m
Adjusted Net (Loss) / Income ($ 0.1 m) $ 0.5 m ($ 2.9 m) $ 1.6 m
Earnings / (Loss) P.S. $0.00 $0.03 ($0.31) $0.15
Adjusted (Loss) / Earnings P.S. ($0.01) $0.08 ($0.26) $0.26
12. Slide 12
Investment Summary
Drybulk Market
• 2013 remains challenging, but a recovery is in sight.
• Increased scrapping and reduced orderbook will speed up recovery.
• A gradual recovery starting in early 2014 is expected.
Paragon Shipping Inc.
• Financing & Debt Exposure: Debt restructuring completed. Reduced Debt repayment
requirements and obtained waivers. Agreed with CDB for a $69 million credit facility to
partially finance the two containership newbuildings. Current leverage ratio of 60%.
• Fleet Growth: 3 Handysize newbuildings delivered, 1 expected in Q413.
• Diversification: Exposure to Containership Sector through ownership of 13.8% of Box Ships.
• Chartering: Well positioned to take advantage of the market when the recovery begins.
13. Investor Relations /Media:
Allen & Caron Inc.
Rudy Barrio (Investors)
Tel: (212) 691-8087
Email: r.barrio@allencaron.com
Len Hall (Media)
Tel: (949) 474-4300
Email: len@allencaron.com
Company:
Paragon Shipping Inc.
Robert Perri, CFA
Chief Financial Officer
15 Karamanli Ave.
GR 166 73, Voula, Greece
Tel: +30 (210) 8914 600
Email: ir@paragonshipping.gr
15. Slide 15
Non-cash recurring
Statement of Operations – 2Q 2013
Non-cash recurring
Adjustments Adjusted
(US$ 000's) 3 Months Ended 3 Months Ended 3 Months Ended
Jun. 30, 2013 Jun. 30, 2013 Jun. 30, 2013
Revenue
Charter revenue $14,684 $14,684
Commisssions (806) (806)
Net Revenue 13,878 13,878
Expenses / (Income)
Voyage expenses, net 1,988 1,988
Vessel operating expenses 5,514 5,514
Dry-docking expenses 1,227 1,227
Management fees - related party 1,187 1,187
Depreciation 4,251 4,251
General & administrative expenses 1,611 194 1,417
Bad debt provisions (17) (17)
Gain from marketable securities, net (3,113) (3,113)
Total Operating Expenses 12,649 194 12,455
Operating Income 1,229 194 1,424
Other Income / (Expenses)
Interest and finance costs (1,860) (1,860)
Gain / (loss) on derivatives, net 35 (271) (236)
Interest income 168 168
Equity in net income of affiliate 410 410
Foreign currency gain 34 34
Total Other Expenses, net (1,212) (271) (1,484)
$17 ($77) ($60)
Weighted av. number of shares, basic 11,041 11,041 11,041
Weighted av. number of shares, diluted 11,134 11,134 11,134
$0.00 ($0.01) ($0.01)
Net Income / (Loss)
Earnings / (Loss) per Common Share
16. Slide 16
Statement of Operations – 1H 2013
Non-cash
Non-cash recurring
Non-cash recurring
Adjustments Adjusted
(US$ 000's) 6 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2013 Jun. 30, 2013 Jun. 30, 2013
Revenue
Charter revenue $28,909 $28,909
Commisssions (1,578) (1,578)
Net Revenue 27,332 27,332
Expenses / (Income)
Voyage expenses, net 2,653 2,653
Vessel operating expenses 10,595 10,595
Dry-docking expenses 1,698 1,698
Management fees - related party 2,683 336 2,347
Depreciation 8,385 8,385
General & administrative expenses 5,222 336 4,886
Gain from marketable securities, net (3,113) (3,113)
Total Operating Expenses 28,124 672 27,452
Operating Loss (792) 672 (120)
Other Income / (Expenses)
Interest and finance costs (3,761) (3,761)
Gain / (loss) on derivatives, net 20 (509) (489)
Interest income 394 394
Equity in net income of affiliate 979 979
Loss on investment in affiliate (391) 391 -
Foreign currency gain 57 57
Total Other Expenses, net (2,702) (118) (2,820)
($3,494) $554 ($2,940)
11,017 11,017 11,017
($0.31) $0.05 ($0.26)
Net Loss
Loss per Common Share, basic & diluted
Weighted av. number of shares, basic & diluted
Non-cash
17. Slide 17
Statement of Operations Adjustments
Adjusted EBITDA Reconciliation
Adjusted Net Loss (60) (2,940)
Plus Net interest expense, including swap interest 1,928 3,856
Plus Depreciation 4,251 8,385
Adjusted EBITDA 6,119 9,301
3 Months Ended 6 Months Ended
Jun. 30, 2013 Jun. 30, 2013
Adjusted Net Loss Reconciliation
(US$ 000's)
Net Income / (Loss) 17 (3,494)
Loss on investment in affiliates - 391
Unrealized gain from interest rate swaps (271) (509)
Share based compensation 194 672
Adjusted Net Loss (60) (2,940)
Non-cash recurring
Non-cash recurring
Non-cash
18. Slide 18
Balance Sheet & Cash Flow Statement
(US$ 000's) June 30, December 31,
2013 2012
Cash and restricted cash (current and non-current) 21,707 27,687
Vessels, net 314,650 298,376
Advances for vessel acquisitions / under construction 27,249 49,593
Other fixed assets, net 446 498
Investment in equity affiliate 19,514 19,988
Loan to affiliate 12,000 14,000
Other assets 15,068 9,834
TOTAL ASSETS 410,634 419,975
Total debt 188,329 195,542
Total other liabilities 8,976 8,912
TOTAL LIABILITIES 197,305 204,454
Total Shareholders'equity 213,329 215,521
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 410,634 419,975
(US$ 000's) June 30, June 30,
2013 2012
Net cash from operating activities 1,948 7,387
Net cash used in investing activities (41) (21,975)
Net cash (used in) / from financing activites (7,887) 7,708
Net decrease in cash and cash equivalents (5,980) (6,880)
19. Slide 19
Current Operating Fleet
Name & Type DWT Year Built Country of Build
Panamax Fleet
Calm Seas 74,047 1999 Japan
Deep Seas 72,891 1999 Korea
Kind Seas 72,493 1999 Japan
Pearl Seas 74,483 2006 China
Diamond Seas 74,274 2001 Japan
Coral Seas 74,477 2006 China
Golden Seas 74,475 2006 China
Dream Seas 75,151 2009 China
Supramax Fleet
Sapphire Seas 53,702 2005 China
Friendly Seas 58,779 2008 China
Handysize Fleet
Prosperous Seas 37,293 2012 China
Precious Seas 37.205 2012 China
Priceless Seas 37,202 2013 China
TOTAL 816,472
20. Slide 20
Current Newbuilding Program
Hull No. & Type DWT / TEU Country of Build Expected Delivery
Drybulk Handysize
625 (Proud Seas) 37,200 China Q4 2013
TOTAL 37,200
Containerships
656 4,800 China Q3 2014
657 4,800 China Q3 2014
TOTAL 9,600
21. Slide 21
Current Fleet Employment
(1) Deep Seas & Coral Seas: We have agreed with the charterer on the early termination of the respective time charter agreements
(2) Golden Seas: Charterers have the option to extend the charter agreement for an additional 11 to 13 months at $13,000 plus 50/50 profit share
(3) Prosperous Seas & Precious Seas: Charterers have the option to extend the charter agreement for an additional 11 to 14 months at $15,500 per day
VESSEL CHARTERER GROSS HIRE DURATION T/C COMMENCED T/C EXPIRES
PANAMAX FLEET
Calm Seas Intermare Transport GmbH $ 11,800 19-24 Months Mar-12 Oct-13 / Mar-14
Deep Seas
Morgan Stanley
Capital Group Inc.
$ 11,000 plus 50/50 Profit Share 33-36 Months (1)
Oct-11 Aug-13
Kind Seas Cargill International S.A. $ 13,650 About 70-90 Days Jun-13 Aug-13 / Sep-13
Pearl Seas Cargill International S.A. $ 12,125 22-25 Months Dec-11 Sep-13 / Jan-14
Diamond Seas Louis Dreyfus Commodities $ 9,050 115-225 Days Jun-13 Oct-13 / Jan-14
Coral Seas
Morgan Stanley
Capital Group Inc.
$ 12,000 23-25 Months (1)
Jan-12 Aug-13
$ 12,250 22-25 Months Nov-11 Sep-13 / Dec-13
$ 13,000 plus 50/50 Profit Share 11-13 Months (2)
Dream Seas MOL Bulk Carriers Pte. Ltd. $ 17,250 About 50 Days Aug-13 Sep-13
SUPRAMAX FLEET
Sapphire Seas PACC Container Lines Pte Ltd. $ 9,000 5-7 Months Jul-13 Dec-13 / Feb-14
Friendly Seas Western Bulk Carriers A/S $ 10,700 18-24 Months Feb-12 Aug-13 / Feb-14
HANDYSIZE FLEET
$ 12,125 23-26 Months May-12 Mar-14 / Jul-14
$ 15,500 11-14 Months (3)
$ 12,125 23-26 Months Jun-12 May-14 / Sep-14
$ 15,500 11-14 Months (3)
Priceless Seas Western Bulk Carriers A/S $ 8,750 About 40 Days Jul-13 Aug-13
PARAGON FLEET EMPLOYMENT
Prosperous Seas
Precious Seas
Cargill International S.A.
Cargill International S.A.
Golden Seas Mansel Ltd.
22. Slide 22
Vessel Next DD Estimated Estimated
Type Quarter Budget (1)
Offhire Days (1)
Friendly Seas Supramax Q1 2013 Completed
Kind Seas Panamax Q2 2013 Completed
Sapphire Seas Supramax Q2 2013 Completed
Calm Seas Panamax Q3 2013 $ 750,000 18
Total 2013 $ 750,000 18
Dry-dockings 2013 - 2014
1. The costs reflected are estimates based on drydocking our vessels in China. We estimate that each dry-dock will result in 18 days off-hire.
Actual costs may vary on various factors. We expect to fund these costs with cash from operations
Deep Seas Panamax Q1 2014 $ 750,000 18
Pearl Seas Panamax Q1 2014 $ 750,000 18
Coral Seas Panamax Q2 2014 $ 750,000 18
Dream Seas Panamax Q2 2014 $ 750,000 18
Golden Seas Panamax Q3 2014 $ 750,000 18
Kind Seas Panamax Q4 2014 $ 750,000 18
Total 2014 $ 4,500,000 108
