SYS-CON MEDIA Authors: Adine Deford, Cynthia Dunlop, Harry Trott, Xenia von Wedel, Peter Silva

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Euroseas Ltd. Reports Results for the Quarter Ended March 31, 2014

MAROUSSI, ATHENS, GREECE -- (Marketwired) -- 05/20/14 -- 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 month period ended March 31, 2014.

First Quarter 2014 Highlights:

  • Net loss of $2.2 million or $0.05 loss per share basic and diluted on total net revenues of $9.5 million. Adjusted net loss(1) for the period was the same.

  • Adjusted EBITDA(1) was $1.0 million.

  • An average of 14.00 vessels were owned and operated during the first quarter of 2014 earning an average time charter equivalent rate of $7,969 per day.

  • The Company declared its first dividend of $0.3 million on its Series B Preferred shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.

Recent Developments:

  • March 2014: Sold 11,164,868 shares of its common stock shares in a private placement for aggregate net proceeds of approximately $14.4 million.

  • May 2014: Concluded the signing of a previously announced agreement to acquire the contracts for the construction of two Kamsarmax fuel efficient drybulk carriers of 82,000 dwt each scheduled to be delivered in the fourth quarter of 2015 and in the fourth quarter of 2016; chartered the vessel to be delivered in the fourth quarter of 2015 for 4 years with an additional year at charterer's option with the contract expected to generate approximately of $20 million of revenues over the four years.

(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 four months of 2014, the drybulk market weakened whilst the containership market showed some signs of moving slightly up, away from its all-time lows. We expect both markets to show a slow gradual improvement over the remaining of 2014 and 2015 based on the expected demand and supply developments. Our chartering strategy remains to pursue short term charters of 3-12 months in order to retain the opportunity to take advantage of any rate increases.

"Over the last six months, we embarked on an investment program for the drybulk part of our fleet by ordering or acquiring the contracts of 4 newbuilding vessels and agreeing to acquire a second hand panamax vessel thus positioning Euroseas to take advantage of the expected recovery of the drybulk market; we focused mainly on newbuilding contracts as we believe that newbuilding prices have moved only modestly up as compared to secondhand prices. We have also raised more than $43m net proceeds through a preferred offering and a common share offering to finance the equity portion of these investments. In parallel, we pursued opportunities in the containership market via Euromar, our joint venture with 2 private equity firms, and acquired a 5,600 teu vessel with a 3-year charter. With all the above, we believe we made Euroseas a company with significant presence and exposure in the drybulk market -- when our newbuilding program is complete -- but also with an additional significant upside potential if the containership market recovers, through the vessels we directly own and our share in Euromar. We continue to look for additional opportunities to further expand our fleet in accretive ways."

Tasos Aslidis, Chief Financial Officer of Euroseas, commented: "The results of the first quarter of 2014 reflect the continued depressed state of the markets. Comparing our results for the first quarter of 2014 with the same period of 2013, our net revenues declined by about $1.4 million but we incurred lower drydocking expenses of approximately $1.7 million and lower depreciation expenses of approximately $1.4 million which overall resulted in a lower overall loss of $0.05 / share, taking also into account the increased number of shares during the first quarter of 2014 due to our recent common stock offering.

"Total daily vessel operating expenses, including management fees and general and administrative ("G&A") expenses increased by 1.2% on a per vessel per day basis during the first quarter of 2014 as compared to the first quarter of 2013. Our drydocking expenses in the first quarter of 2014 were only $68/day on a per vessel per day basis reflecting expenses for upcoming drydockings as there was no drydocking performed during the first quarter of 2014, a level that was significantly lower as compared to the $1,343/day for same period of 2013 during which three drydockings were performed. We believe that we continue to maintain one of the lowest operating cost structures amongst the public shipping companies which, we believe, is one of our competitive advantages.

"As of March 31, 2014, our outstanding debt is about $52.5 million versus restricted and unrestricted cash of about $62.3 million. We were in compliance with all our loan covenants."

First Quarter 2014 Results:
For the first quarter of 2014, the Company reported total net revenues of $9.5 million representing a 12.5% decrease over total net revenues of $10.9 million during the first quarter of 2013. The Company reported loss for the period of $2.2 million as compared to a net loss of $4.6 million for the first quarter of 2013. The results for the first quarter of 2014 include a $0.2 million unrealized gain on derivatives as compared to $0.5 million unrealized gain on derivatives for the same period of 2013; and a $0.2 million realized loss on derivatives compared to a $0.4 million realized loss in the same period of 2013. Drydocking expenses of $0.09 million during the quarter were significantly lower than the $1.8 million incurred in the first quarter of 2013, since no vessel undertook drydock in the first quarter of the year 2014. Depreciation expense for the first quarter of 2014 was $2.9 million compared to $4.3 million during the same period of 2013 as a result of the lower number of vessels in the fleet but also due to lower cost base for nine of the containerships as a result of the impairment charge recorded as of December 31, 2013. On average, 14.00 vessels were owned and operated during the first quarter of 2014 earning an average time charter equivalent rate of $7,817 per day compared to 15.00 vessels in the same period of 2013 earning on average $8,718 per day.

Adjusted EBITDA for the first quarter of 2014 was $1.0 million up from negative $0.1 million achieved during the first quarter of 2013. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.

Basic and diluted loss per share for the first quarter of 2014 was $0.05, calculated on 47,956,229 weighted average number of shares outstanding compared to basic and diluted loss per share of $0.10 for the first quarter of 2013, calculated on 45,319,605 weighted average number of shares outstanding.

Excluding the effect on the loss for the quarter of the unrealized gain and realized losses on derivatives, the adjusted loss per share for the quarter ended March 31, 2014 would have remained the same at $0.05 per share basic and diluted, compared to the loss, for the quarter ended March 31, 2013 of $0.10 per share basic and diluted. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:
The Euroseas Ltd. fleet profile including newbuild and secondhand vessels we agreed to construct or acquire is as follows:


----------------------------------------------------------------------------

                                              Year   Employment   TCE Rate
Name                  Type      Dwt     TEU   Built     (*)        ($/day)
----------------------------------------------------------------------------
Dry Bulk Vessels
----------------------------------------------------------------------------
Vessels under
constructions
(**)
----------------------------------------------------------------------------
Hull Number DY
160                 Ultramax   63,500         2015      N/A
----------------------------------------------------------------------------
Hull Number DY
161                 Ultramax   63,500         2016      N/A
----------------------------------------------------------------------------
                                                     4 year TC
                                                    starting at
Hull Number YZJ                                     delivery+ 1
1116               Kamsarmax   82,000         2015    year at
                                                    charterer's
                                                       option
----------------------------------------------------------------------------
Hull Number YZJ
1153               Kamsarmax   82,000         2016      N/A
----------------------------------------------------------------------------

Vessels in the
water
----------------------------------------------------------------------------
                                                      TC 'til   105% average
PANTELIS            Panamax    74,020         2000     Feb-15     BPI 4 TC
----------------------------------------------------------------------------
                                                                   97% of
ELENI P             Panamax    72,119         1997    TC 'till   average BPI
                                                       Oct-14        4TC
----------------------------------------------------------------------------
                                                      TC 'til
ARISTIDES N.P.      Panamax    69,268         1993     Aug-14      $9,000
----------------------------------------------------------------------------
                                                      TC 'til
MONICA P            Handymax   46,667         1998     Sep-14      $7,500
----------------------------------------------------------------------------
EIRINI P (**)       Panamax    76,466         2004      N/A
----------------------------------------------------------------------------
Total Dry Bulk
Vessels                9      629,540
----------------------------------------------------------------------------
Container
Carriers
----------------------------------------------------------------------------
EVRIDIKI G
(ex.MAERSK        Intermediate 34,677  2,556  2001    TC 'til
NOUMEA)                                                Apr-15      $8,200
----------------------------------------------------------------------------

                                                      TC till
                                                       Jun-14
                                                     +6 months     $6,800
TIGER BRIDGE      Intermediate 31,627  2,228  1990       at        $9,500
                                                    charterer's
                                                       option
----------------------------------------------------------------------------
                                                      TC 'til
AGGELIKI P        Intermediate 30,360  2,008  1998     Sep-14      $6,950
----------------------------------------------------------------------------

                                                      TC 'til
DESPINA P          Handy size  33,667  1,932  1990     Sep-14      $6,950
----------------------------------------------------------------------------

CAPTAIN COSTAS                                        TC 'til
(ex-OEL            Handy size  30,007  1,742  1992     Jun-14      $6,500
TRANSWORLD)                                          then 'til     $7,750
                                                       Jul-15
----------------------------------------------------------------------------
                                                      TC 'till
JOANNA             Handy size  22,301  1,732  1999     Jun-14      $7,500
----------------------------------------------------------------------------

                                                      TC 'till
                                                     Nov -14 +     $7,150
MARINOS            Handy size  23,596  1,599  1993    5 months     $8,000
                                                    charterer's
                                                       option
----------------------------------------------------------------------------

MANOLIS P          Handy size  20,346  1,452  1995    TC 'til      $7,200
                                                       Mar-15
----------------------------------------------------------------------------

NINOS                Feeder    18,253  1,169  1990    TC 'til      $8,200
(ex-YM QINGDAO I)                                      Oct-14
----------------------------------------------------------------------------
                                                      TC till
KUO HSIUNG           Feeder    18,154  1,169  1993     Jul-14      $7,700
----------------------------------------------------------------------------

Total Container        10     262,988 17,587
Carriers
----------------------------------------------------------------------------
Fleet Grand Total      19     892,528 17,587
----------------------------------------------------------------------------

Note: (*) Charter duration indicates the earliest redelivery date unless the
      contract rate is lower than the current market rate in which cases the
      latest redelivery date is assumed; vessels with the latest redelivery
      date shown are marked by (*). Generally, charterers have a range of 15
      days to 3 of months to redeliver the vessels depending on the length
      of the charter.
      (**) Vessels are to be delivered in the fourth quarter of 2015 (one
      ultramax and one kamsarmax), the other ultramax in the first quarter
      of 2016 and the other kamsarmax in the fourth quarter of 2016. The
      Company expects to take delivery of Eirini P in May 2014. Until
      delivery, the Company is not the owner of the vessels.



Summary Fleet Data:

                                              Three months,    Three months,
                                                     ended            ended
                                             March 31, 2013   March 31, 2014
                                           ---------------- ----------------
FLEET DATA
Average number of vessels (1)                         15.00            14.00
Calendar days for fleet (2)                         1,350.0          1,260.0
Scheduled off-hire days incl. laid-up (3)              66.1                -
Available days for fleet (4) = (2) - (3)            1,283.9          1,260.0
Commercial off-hire days (5)                           8.42                -
Operational off-hire days (6)                         16.45              2.3
Voyage days for fleet (7) = (4) - (5) -
 (6)                                                1,259.0          1,257.7
Fleet utilization (8) = (7) / (4)                     98.1%            99.8%
Fleet utilization, commercial (9) = ((4) -
 (5)) / (4)                                           99.3%           100.0%
Fleet utilization, operational (10) = ((4)
 - (6)) / (4)                                         98.7%            99.8%

AVERAGE DAILY RESULTS
Time charter equivalent rate (11)                     8,718            7,817
Vessel operating expenses excl. drydocking
 expenses (12)                                        5,554            5,548
General and administrative expenses (13)                715              800
Total vessel operating expenses excl. dd
 expenses (14)                                        6,269            6,348
Drydocking expenses (15)                              1,343               68

(1)  Average number of vessels is the number of vessels that constituted the
     Company's fleet for the relevant period, as measured by the sum of the
     number of calendar days each vessel was a part of the Company's fleet
     during the period divided by the number of calendar days in that
     period.

(2)  Calendar days. The Company defines calendar days as the total number of
     days in a period during which each vessel in the Company's fleet was in
     its 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 its fleet over a
     period and affect both the amount of revenues and the amount of
     expenses that the Company records 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. The Company uses
     available days to measure the number of days in a period during which
     vessels were available to generate revenues.

(4)  Available days. The Company defines available days as the total number
     of days in a period during which each vessel in the Company's fleet was
     in its possession net of scheduled off-hire days including days of
     vessels laid-up.

(5)  Commercial off-hire days. The Company defines commercial off-hire days
     as days waiting to find employment.

(6)  Operational off-hire days. The Company defines 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. The Company defines voyage days as the total number of
     days in a period during which each vessel in the Company's fleet was in
     its possession net of commercial and operational off-hire days. The
     Company uses voyage days to measure the number of days in a period
     during which vessels actually generate revenues.

(8)  Fleet utilization. The Company calculates fleet utilization by dividing
     the number of the Company's voyage days during a period by the number
     of its available days during that period. The Company uses 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. The Company calculates commercial fleet
     utilization by dividing the Company's available days net of commercial
     off-hire days during a period by its available days during that period.

(10) Fleet utilization, operational. The Company calculates operational
     fleet utilization by dividing the Company's available days net of
     operational off-hire days during a period by its 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. The Company's
     method of calculating TCE is determined by dividing Voyage revenue 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 the Company's
     total expenses associated with operating its 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, Wednesday, May 21, 2014 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 (international standard dial in). Please quote "Euroseas".

A replay of the conference call will be available until May 28, 2014. 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 First Quarter 2014 results in PDF format will also be available 10 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   Three Months
                                                   Ended          Ended
                                                 March 31,      March 31,
                                                    2013           2014
                                               -------------  -------------

Revenues
                                Voyage revenue    11,339,366      9,966,997
                         Related party revenue        60,000         60,000
                                   Commissions      (487,743)      (528,138)
Net revenues                                      10,911,623      9,498,859

Operating expenses
                               Voyage expenses       249,076        136,296
                     Vessel operating expenses     6,257,587      5,798,619
                           Drydocking expenses     1,812,402         85,404
                                  Depreciation     4,283,094      2,852,920
                               Management fees     1,240,725      1,191,806

     Other general and administrative expenses       965,866      1,007,889
Total operating expenses                          14,808,750     11,072,934

Operating loss                                    (3,897,127)    (1,574,075)

Other income/(expenses)
                     Interest and finance cost      (479,340)      (470,141)
                  Gain / (loss) on derivatives        20,775        (41,654)
                         Foreign exchange gain         6,695          1,106
                       Other investment income             -        237,500
                               Interest income       188,468        109,616
                           Other expenses, net      (263,402)      (163,573)
                  Equity loss in joint venture      (465,699)      (475,434)

                                               -------------  -------------
Net loss                                          (4,626,228)    (2,213,082)
                                               -------------  -------------


            Dividend Series B Preferred shares             -       (264,361)

                                               -------------  -------------
Net loss available to common shareholders         (4,626,228)    (2,477,443)
                                               -------------  -------------
Loss per share, basic & diluted                        (0.10)         (0.05)
                                               -------------  -------------
Weighted average number of shares, basic &
 diluted                                          45,319,605     47,956,229
                                               -------------  -------------



                               Euroseas Ltd.
              Unaudited Consolidated Condensed Balance Sheets
     (All amounts expressed in U.S. Dollars - except number of shares)

                                                December 31,    March 31,
                                                    2013           2014
                                               -------------  -------------

ASSETS
Current Assets:
  Cash and cash equivalents                       11,400,237     53,276,020
  Trade accounts receivable                        1,879,151        732,240
  Other receivables, net                           1,440,833        622,599
  Due from related party                                   -      1,701,125
  Inventories                                      1,474,114      1,459,328
  Restricted cash                                    462,415      1,659,383
  Prepaid expenses                                   295,248        402,114
Total current assets                              16,951,998     59,852,809
Fixed assets:
  Vessels, net                                   105,463,737    102,610,817
  Advances for vessels under construction and
   vessel acquisition                                 50,122      7,548,767
Long-term assets:
  Restricted cash                                  7,400,000      7,400,000
  Deferred charges, net                              338,431        248,902
  Other investments                                5,196,196      5,433,696
  Investment in joint venture                     21,215,870     20,740,436
Total long-term assets                           139,664,356    143,982,618
                                               -------------  -------------
Total assets                                     156,616,354    203,835,427
                                               -------------  -------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Long term debt, current portion                 12,862,000     14,362,000
  Trade accounts payable                           2,336,952      2,404,023
  Accrued expenses                                 1,002,445      1,225,254
  Accrued dividends                                   13,050         13,050
  Deferred revenue                                   996,599        773,703
  Due to related company                             903,478              -
  Derivatives                                        697,889        531,494
Total current liabilities                         18,812,413     19,309,524

Long-term liabilities:
  Long term debt, net of current portion          32,782,000     38,089,000
  Derivatives                                        319,859        307,087
Total long-term liabilities                       33,101,859     38,396,087
Total liabilities                                 51,914,272     57,705,611

Shareholders' equity:
  Common stock (par value $0.03, 200,000,000
   shares authorized, 45,723,255 and
   56,888,123 issued and outstanding,             1,371,698      1,706,644
   respectively)
  Preferred shares (par value $0.01,
   20,000,000 shares authorized, 0 and 30,964
   shares issued and outstanding,
   respectively)                                           -            310
  Additional paid-in capital                     252,314,683    295,889,828
  Accumulated deficit                           (148,984,299)  (151,466,966)
  Total shareholders' equity                     104,702,082    146,129,816

                                               -------------  -------------
  Total liabilities and shareholders' equity     156,616,354    203,835,427
                                               -------------  -------------



                               Euroseas Ltd.
         Unaudited Consolidated Condensed Statements of Cash Flows
                  (All amounts expressed in U.S. Dollars)

                                                Three Months   Three Months
                                                       Ended          Ended
                                                   March 31,      March 31,
                                                        2013           2014
                                               -------------  -------------

Cash flows from operating activities:
Net loss                                          (4,626,228)    (2,213,082)
Adjustments to reconcile net loss to net cash
 provided by / (used in) operating activities:
Depreciation of vessels                            4,283,094      2,852,920
Amortization of deferred charges                      50,281         30,850
Loss in investment in joint venture                  465,699        475,434
Share-based compensation                             208,746        146,040
Other income accrued                                       -       (237,500)
Unrealized gain on derivatives                      (461,914)      (179,167)
Changes in operating assets and liabilities        1,695,654     (1,110,183)
                                               -------------  -------------
Net cash provided by / (used in) operating
 activities                                        1,615,332       (234,688)
                                               -------------  -------------

Cash flows from investing activities:
Contribution to joint venture                     (6,250,000)             -
Advances for vessels under construction and
 vessel acquisition                                        -     (7,510,747)
Change in restricted cash                           (658,761)    (1,196,968)
                                               -------------  -------------
Net cash used in investing activities             (6,908,761)    (8,707,715)
                                               -------------  -------------

Cash flows from financing activities:
Proceeds from issuance of common stock, net                -     14,550,000
Proceeds from issuance of preferred stock, net             -     29,700,000
Dividends paid                                      (678,191)             -
Offering expenses paid                                     -       (131,814)
Loan fees paid                                             -       (107,000)
Proceeds from long-term debt                               -      8,000,000
Repayment of long-term debt                       (2,118,000)    (1,193,000)
                                               -------------  -------------
Net cash (used in) / provided by financing
 activities                                       (2,796,191)    50,818,186
                                               -------------  -------------

Net (decrease) / increase in cash and cash
 equivalents                                      (8,089,620)    41,875,783
Cash and cash equivalents at beginning of
 period                                           33,374,960     11,400,237
                                               -------------  -------------
Cash and cash equivalents at end of period        25,285,340     53,276,020
                                               -------------  -------------



                               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   Three Months
                                                   Ended          Ended
                                                 March 31,      March 31,
                                                    2013           2014
                                               -------------  -------------

Net loss                                          (4,626,228)    (2,213,082)
                                               -------------  -------------
Interest and finance costs, net (incl.
 interest income)                                    290,872        360,525
                                               -------------  -------------
Depreciation                                       4,283,094      2,852,920
                                               -------------  -------------
Unrealized & realized (gain) / loss on
 derivatives                                         (20,775)        41,654
                                               -------------  -------------

Adjusted EBITDA                                      (73,037)     1,042,017
                                               =============  =============



                                                Three Months   Three Months
                                                   Ended          Ended
                                                 March 31,      March 31,
                                                    2013           2014
                                               -------------  -------------
Net cash flow provided by / (used in)
 operating activities                              1,615,332       (234,688)
                                               -------------  -------------

Changes in operating assets / liabilities         (1,695,654)     1,110,183
                                               -------------  -------------
Loss on derivatives (realized)                       441,139        220,821
                                               -------------  -------------
Equity loss in joint venture and Other
 investment income, net                             (465,699)      (237,934)
                                               -------------  -------------
Share-based compensation                            (208,746)      (146,040)
                                               -------------  -------------
Interest, net                                        240,591        329,675
                                               -------------  -------------

Adjusted EBITDA                                      (73,037)     1,042,017
                                               =============  =============

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 per share
                                  amounts)

                                                Three Months   Three Months
                                                   Ended          Ended
                                                 March 31,      March 31,
                                                    2013           2014
                                               -------------  -------------

Net loss                                          (4,626,228)    (2,213,182)
                                               -------------  -------------

Unrealized gain on derivatives                      (461,914)      (179,167)
                                               -------------  -------------

Realized loss on derivatives                         441,139        220,821
                                               -------------  -------------
Adjusted net loss                                 (4,647,003)    (2,171,428)
                                               -------------  -------------
Preferred dividends                                        -       (264,361)
                                               -------------  -------------
Adjusted net loss available to common
 shareholders                                                    (2,435,789)
                                               -------------  -------------

Adjusted net loss per share, basic & diluted           (0.10)         (0.05)
                                               -------------  -------------
Weighted average number of shares, basic &
 diluted                                          45,319,605     47,956,229
                                               =============  =============

Adjusted Net loss and Adjusted Net loss per share Reconciliation:
Euroseas Ltd. considers Adjusted Net loss to represent net loss before gain / loss in 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 Select Market under the ticker ESEA.

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 14 vessels, including 3 Panamax drybulk carriers and 1 Handymax drybulk carrier, 3 Intermediate containership, 5 Handysize containerships, 2 Feeder containerships. Euroseas` 4 drybulk carriers have a total cargo capacity of 262,074 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, two Kamsarmax (82,000 dwt) fuel efficient drybulk carriers and a second hand 76,000 dwt panamax drybulk vessel built in 2004, in Japan. Including the four new-buildings and the new second hand vessel, 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 our expected joint venture and vessel acquisitions and 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 drybulk vessels and containerships, 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

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