paragon shipping q4 2012 results presentation

Earnings Conference Call Fourth Quarter & Year Ended December 31, 2012

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

Agenda

4Q & Full Year 2012 Financial Highlights

Company Update

Industry Overview

Financial Update

Investment Summary

Financial Highlights - 4Q & Full Year 2012

EBITDA Adjusted (1) Net Income Adjusted (1)

(1) Adjusted for non cash items

US

D M

illio

n

US

D M

illio

n

Q4 2012 Q4 2011 F.Y. 2012 F.Y. 2011

Average No. of Vessels 12.0 10.3 11.2 11.5

Time Charter Equivalent rate $ 10,563 $ 17,905 $ 11,923 $ 21,312

Net Revenue $ 12.9 m $ 16.0 m $ 50.3 m $ 86.9 m

EBITDA $ 6.9 m ($ 262.4 m) $ 7.6 m ($ 238.4 m)

Adjusted EBITDA $ 4.4 m $ 9.9 m $ 24.2 m $ 57.7 m

Net Income / (Loss) $ 0.3 m ($ 272.4 m) ($ 17.6 m) ($ 283.5 m)

Adjusted Net (Loss) / Income ($ 2.1 m) $ 0.5 m ($ 1.0 m) $ 15.4 m

Earnings / (Loss) P.S. $0.05 ($45.25) ($2.84) ($47.61)

Adjusted (Loss) / Earnings P.S. ($0.33) $0.09 ($0.16) $2.58

18.3 16.5

13.1

9.9

7.0 6.6 6.1 4.4

0

5

10

15

20

Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412

6.8

5.2

2.9

0.5 1.1

0.5 (0.4)

(2.1) -4

-2

0

2

4

6

8

Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412

Financing Update

Debt restructuring successfully completed:

Final documentation signed with all our Lenders.

Raised $10.0 million in equity through CEO’s private placement.

All conditions precedent fulfilled.

Achievements:

We obtained waivers for several of our financial & security coverage ratio covenants.

The relaxation of several of our financial & security coverage ratio covenants.

The deferral of a portion of our scheduled quarterly installments.

The extension of two of our loan facilities: BOI & BOS for 3 & 2 years respectively.

The extension of the availability period of Nordea facility from July 2013 to April 2014.

A gain from debt extinguishment of $1.9 million.

Overall, we reduced our debt repayment requirements for 2013 and 2014 by $44.4

million and $6.9 million, respectively.

1) As of February 18, 2013

2) Including newbuilding deposits, KLC Shares, loan to Box Ships and M.V. adjusted investment in Box Ships

Leverage Ratio (1)

Financing Update

Cash (including restricted cash) $ 25 m

Total Debt $ 194 m

Net Debt $ 169 m

M.V. Adjusted Net Worth (2)

$ 111 m

Total Capitalization $ 280 m

Net Debt / Total Capitalization 60%

Leverage ratio of 60%

Reduced debt repayment requirements

Scheduled Loan Repayments (USD Million)

192 188

185

181

6.7 4.7

42.8

4.7 3.6 3.6 3.6 3.6

$150

$160

$170

$180

$190

$200

$0

$15

$30

$45

$60

$75

Q113 Q213 Q313 Q413

Debt O/S Loan Repaym. before Restr. Loan Repaym. after Restr.

Newbuilding Update - M/V Priceless Seas Delivered

Fleet size

increased to 13

drybulk vessels

Debt-Free Vessel,

Low Breakeven

Point

Chartering Update

Min. Hire

Receipts

F ixed Days Optional Period Open Days $36.9 m

NB

s

Priceless Seas $0.4 m

Diamond Seas $0.8 m

On

th

e W

ate

r

Sapphire Seas

Golden Seas

Calm Seas

Friendly Seas

Fixed

Revenue Days ( 1) 55%

Hull No. 657 -

-

-

Proud Seas

Hull No. 656

0%

2016

Q1 Q2 Q3 Q4

$2.7 m

$0.9 m

$0.4 m

2015

Q4

Remainder

2013

Q3 Q1

2014

Q1 Q2 Q2Q4

Dream Seas

Pearl Seas

Coral Seas

Deep Seas

Q2

Precious Seas

Kind Seas

Prosperous Seas

Q1 Q4 Q3

0%7%

Q3

$5.2 m

$5.6 m

$2.9 m

$4.0 m

$2.0 m

$3.1 m

$2.9 m

$6.0 m

Average charter term remaining (1) = 0.6 years

(1) Assumes earliest redelivery dates

$36.9 million contracted minimum net hire receipts as of Dec. 31, 2012

0

20

40

60

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13

Capesize Panamax

Supramax Handysize

Linear (Capesize) Linear (Panamax)

Linear (Supramax) Linear (Handysize)

Drybulk Market

Average T/C Routes (USD Per Day)

Source: Clarkson’s Research

TC rates remain close to breakeven levels in all sectors

Asset values are stabilizing in all sectors

5 Year Old Secondhand Prices (USD Million)

0

10,000

20,000

30,000

40,000

Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Capesize

Panamax

Supramax

Handysize

0%

25%

50%

75%

100%

0

200

400

600

800

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Global Fleet Orderbook Orderbook as a % of Global Fleet

0

20

40

60

80

100

2013 2014 2015+

Capesize Panamax Supramax Handysize

Supply Fundamentals


Millio

n D

wt

Outstanding Orderbook by Vessel Type Global Fleet vs Orderbook

Drybulk orderbook is contracting – currently stands at 19% of existing fleet

More than 1,150 vessels added to the fleet in 2012, while about 580

vessels were scrapped

Millio

n D

wt

Deletions vs Newbuilding Deliveries

92 m

33 m

6 m

12

8

10 9 10

14

7 6

8

6 5

3 2 3

4 4 3 2 2 2

4 3 3 2

10

5 6 5

7

12

5 3

4 3 2 2

0

5

10

15

January February March April May June July August September October November December

Deliveries Deletion Net Growth

2,000

2,500

3,000

3,500

4,000

4,500

2005 2006 2007 2008 2009 2010 2011 2012e 2013f 2014f

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Net fleet growth Required dwt growth Trade

Demand & Supply Equilibrium

Net Fleet Growth is expected to be higher than required through 2013 inclusive


14.4%

10.5%

2.2%

8.9%

5.4%

16.9% 16.9%

4.8%

2.5%

5.5%

Tra

de

in

Millio

n T

on

ne

s

Adjusted EBITDA Reconcil iation

Adjusted Net Loss (2,120) (965)

Plus Net interest expense, including swap interest 2,454 8,748

Plus Depreciation 4,075 16,386

Adjusted EBITDA 4,408 24,169

Statement of Operations Adjustments

3 Months Ended Year Ended

Dec. 31, 2012 Dec. 31, 2012

Adjusted Net Loss Reconcil iation

(USD thousands except for per share data)

Net Income / (Loss) 329 (17,557)

Loss on investment in affiliates - 16,985

Gain from debt extinguishment (1,893) (1,893)

Loss on marketable securities - 980

Unrealized gain from interest rate swaps (692) (2,017)

Share based compensation 136 2,537

Adjusted Net Loss (2,120) (965)

Non-cash recurring

Non-cash recurring

Non-cash

Non-cash

Non-cash

Operating Performance – Full Year 2012

Year Ended

Dec. 31, 2012

Fleet Data

Average number of vessels 11.2

Calendar days for f leet 4,099

Available days for f leet 4,099

Operating days for f leet 4,063

Fleet util ization 99.1%

Time Charter Equivalent 11,923 48,444,715

Vessel operating expenses (4,588) (18,808,084)

Management fees (999) (4,094,744)

G&A expenses (ex . non-cash items) (1,309) (5,365,060)

Total Vessel Operating Expenses (TVOE) (6,896) (28,267,888)

Free Cash F low from Operations 5,027 20,176,827

Net interest expense, including swap interest (2,134) (8,747,785)

Loan repayments ( 1)

(4 ,884) (20,018,437)

Dividends received from affil iates 906 3,712,500

Free Cash F low (1,085) (4,876,895)

Actual AmountsDaily Results

(1) Excluding loan prepayments

Investment Summary

Drybulk Market

• Drybulk demand slowdown through 2013 is expected.

• Overcapacity remains the biggest concern.

• A gradual recovery in the drybulk market is expected starting in 2014.

Paragon Shipping Inc.

• Financing & Debt Exposure: Debt restructuring completed. $1.9 million gained from debt

extinguishment. Debt repayment requirements reduced by $44.4 million and $6.9 million

for 2013 & 2014, respectively. Leverage ratio of 60%.

• Fleet Growth: 3 Handysize newbuildings delivered.

• Diversification: Exposure to Containership Sector through ownership of 16.4% of Box Ships.

• Limited Downside: 55% & 7% of revenue days covered for the remainder of 2013 & full year

2014, respectively. Contracted net revenues of approximately $36.9 million.

Investor Relations /Media:

Allen & Caron Inc.

Rudy Barrio (Investors)

Tel: (212) 691-8087

Email: [email protected]

Len Hall (Media)

Tel: (949) 474-4300


Company:

Paragon Shipping Inc.

Robert Perri, CFA

Chief Financial Officer

15 Karamanli Ave.

GR 166 73, Voula, Greece

Tel: +30 (210) 8914 600


Appendices

Adjustments Adjusted

000's 3 Months Ended 3 Months Ended 3 Months Ended

Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012

Revenue

Time charter revenue $13,682 $13,682

Commisssions (738) (738)

Net Revenue 12,945 12,945

Expenses / (Income)

Voyage expenses 1,505 1,505

Vessel operating expenses 4,778 4,778

Management fees - related party 1,105 1,105

Depreciation 4,075 4,075

General & administrative expenses 1,608 136 1,472

Bad debt provisions 125 125

Other income (47) (47)

Total Operating Expenses 13,149 136 13,013

Operating (Loss) / Income (204) 136 (68)

Other Income / (Expense)

Interest and finance costs (1,946) (1,946)

Gain on derivatives, net 13 (692) (679)

Interest income 171 171

Equity in net income of affiliate 398 398

Gain from debt extinguishment 1,893 (1,893) -

Foreign currency gain 4 4

Total Other Expenses, net 533 (2,585) (2,052)

$329 ($2,449) ($2,120)

6,354 6,354 6,354

$0.05 ($0.38) ($0.33)

Net Income / (Loss)

Weighted average number of shares

Earnings / (Loss) per Common Share

Non-cash recurring

Statement of Operations – 4Q 2012

Non-cash recurring

Non-cash

Adjustments Adjusted

000's Year Ended Year Ended Year Ended

Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012

Revenue

Time charter revenue $53,219 $53,219

Commisssions (2,918) (2,918)

Net Revenue 50,301 50,301

Expenses / (Income)

Voyage expenses 1,856 1,856

Vessel operating expenses 18,808 18,808

Management fees - related party 4,095 4,095

Depreciation 16,386 16,386

General & administrative expenses 7,902 2,537 5,365

Bad debt provisions 125 125

Gain from marketable securities (414) 980 (1,395)

Other income (751) (751)

Total Operating Expenses 48,007 3,517 44,490

Operating Income 2,294 3,517 5,811

Other Income / (Expense)

Interest and finance costs (6,745) (6,745)

Loss on derivatives, net (714) (2,017) (2,731)

Interest income 729 729

Equity in net income of affiliate 1,987 1,987

Gain from debt extinguishment 1,893 (1,893) -

Loss on investment in affiliate (16,985) 16,985 -

Foreign currency loss (15) (15)

Total Other Expenses, net (19,851) 13,075 (6,777)

($17,557) $16,592 ($965)

6,036 6,036 6,036

($2.84) $2.68 ($0.16)

Net (Loss) / Income

Weighted average number of shares

(Loss) / Earnings per Common Share

Non-cash recurring

Statement of Operations – Full Year 2012

Non-cash recurring

Non-cash

Non-cash

Non-cash

Balance Sheet & Cash Flow Statement

(US$ 000's) December 31, December 31,

2012 2011

Cash and restricted cash (current and non-current) 27,687 39,564

Other current assets 21,231 4,029

Fixed assets, net 348,467 332,569

Other long term assets 22,697 55,912

TOTAL ASSETS 420,082 432,074

Bank debt 195,542 201,285

Other liabilities 8,912 9,565

TOTAL LIABILITIES 204,454 210,850

Shareholders'equity 215,628 221,224

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 420,082 432,074

(US$ 000's) December 31, December 31,

2012 2011

Net cash from operating activities 13,377 45,467

Net cash (used in) / from investing activities (15,702) 43,674

Net cash from / (used in) financing activites 5,439 (109,366)

Net increase / (decrease) in cash 3,113 (20,224)

Current Operating Fleet

Name & Type DWT Year Built Country of Build Date Acquired

Panamax Fleet

Calm Seas 74,047 1999 Japan December 2006

Deep Seas 72,891 1999 Korea December 2006

Kind Seas 72,493 1999 Japan December 2006

Pearl Seas 74,483 2006 China August 2007

Diamond Seas 74,274 2001 Japan September 2007

Coral Seas 74,477 2006 China November 2007

Golden Seas 74,475 2006 China December 2007

Dream Seas 75,151 2009 China July 2010

Supramax Fleet

Sapphire Seas 53,702 2005 China August 2007

Friendly Seas 58,779 2008 China August 2008

Handysize Fleet

Prosperous Seas 37,293 2012 China May 2012

Precious Seas 37.205 2012 China June 2012

Priceless Seas 37,202 2013 China January 2013

TOTAL 816,472

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 Q2 2014

657 4,800 China Q2 2014

TOTAL 9,600

Current Fleet Employment

(1) Deep Seas: Charterers have the option to extend the charter agreement for an additional 11 to 13 months at $14,000 per day

(2) Coral Seas: Charterers have the option to extend the charter agreement for an additional 11 to 13 months at $14,500 per day

(3) 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

(4) 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 $ 11,800 19-24 Months Mar-12 Oct-13 / Mar-14

$ 11,000 plus 50/50 Profit Share 33-36 Months Oct-11 Jul-14 / Oct-14

$ 14,000 11-13 Months ( 1)

Kind Seas Torm A/S $ 8,500 About 90 Days Dec-12 Mar-13

Pearl Seas Cargill International $ 12,125 22-25 Months Dec-11 Sep-13 / Jan-14

Diamond Seas Cargill International $ 14,750 About 60 Days Dec-12 Feb-13

$ 12,000 23-25 Months Jan-12 Dec-13 / Mar-14

$ 14,500 11-13 Months ( 2)

$ 12,250 22-25 Months Nov-11 Sep-13 / Dec-13

$ 13,000 plus 50/50 Profit Share 11-13 Months ( 3)

Dream Seas Intermare Transport $ 20,000 35-37 Months Jul-10 May-13 / Aug-13

SUPRAMAX FLEET

Sapphire Seas Grieg Star Bulk $ 13,900 About 60 Days Jan-13 Mar-13

Friendly Seas Western Bulk Carriers $ 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 ( 4)

$ 12,125 23-26 Months Jun-12 May-14 / Sep-14

$ 15,500 11-14 Months ( 4)

Priceless Seas STX Pan Ocean $ 6,000 About 30 Days Mar-13 Apr-13

Prosperous Seas

Precious Seas

Cargill International

Cargill International

Golden Seas Mansel (Vitol S.A.)

Coral Seas

PARAGON FLEET EMPLOYMENT

Deep Seas Morgan Stanley

Morgan Stanley

Vessel Next DD Estimated Estimated

Type Quarter Budget (1)

Offhire Days (1)

Kind Seas Panamax Q1 2013 $ 750,000 18

Friendly Seas Supramax Q1 2013 $ 650,000 18

Sapphire Seas Supramax Q2 2013 $ 650,000 18

Diamond Seas Panamax Q3 2013 $ 750,000 18

Calm Seas Panamax Q3 2013 $ 750,000 18

Total 2013 $ 3,550,000 90

Dry-dockings 2013 - 2014

1. The costs reflected are estimates based on drydocking our vessels in China. We estimate that each drydock 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

paragon shipping q4 2012 results presentation

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