Aristides J. Pittas – Chairman and CEO Anastasios Aslidis – CFO and Treasurer

Donald McLee – Wells Fargo

Thank you for standing by, ladies and gentlemen. And welcome to the Euroseas’ Conference Call on Third Quarter 2014 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasios Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you that the conference is being recorded today, Tuesday, November 11, 2014. Please be reminded that the company announced the results after the market closed today with a press release that has publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone today’s presentation and conference call Euroseas will be making forward looking statements. These statements are within the meaning of federal securities laws matters discussed might be forward-looking statement which are based on current management expectation that involve risks and uncertainties that may result in such expectation not being realized. I kindly draw your attention to slide number 2 of the webcast presentation which has the full forward looking statement and the same statements was also included in the press release. Please take a moment to go through the whole statement and read it. I would now like to pass the floor to Mr. Aristides Pittas, Chairman and Chief Executive Officer of Euroseas. Please go ahead sir. Aristides J. Pittas: Good morning and thank you for joining Euroseas for our conference call today. Together with me is Tasios Aslidis, our CFO. The purpose of today's call is to discuss our financial results for the three and nine months period ended September 30, 2014. Let's turn to slide three of our presentation for our financial results overview. The results for the third quarter of 2014 reflect the continued low level of drybulk and containership charter rates. For the third quarter of 2014, we reported total net revenues of $9.9 million. Net loss for the period was $3.7 million while net loss adjustable to common shareholders was $4.1 million or $0.07 loss per share basic and diluted. The difference being the $0.4 million in dividends paid to our Series B Preferred shares. Adjusted EBITDA for the third quarter of 2014 was negative by $0.2 million. Turning to our first nine months 2014 financial results, we reported total net revenues of $29 million. Net loss for the period was $11 million, while adjusted net loss attributable to common shareholders was $12 million or $0.22 loss per share basic and diluted. Again, the difference is the $1 million in preferred dividends. Adjusted EBITDA for the first nine months of 2014 was negative $0.8 million. Our CFO, Tasios Aslidis will go over our financials in more detail later on during the call. Please turn to slide four. We provide our totally operational highlights here that include employment extensions on five of our containerships that vary from short period of three to six months and up to 13 months maximum, which is in line with our strategy to our vessels and short term charter which would allow us to quickly take advantage of any increase in rates. During the first nine months of 2014, the containership market remains generally static at low levels but we continue to expect prospects to improve with supply demand balance in favor of demand. The facts of the order books expands at above 19%, the lowest level since early 2003 and the demand growth rate is improving we believe should help charter rates recover consistently. On the bulk front, we finished our Panamax and (inaudible) volume charter for $53,400 billion per day and thereafter the vessel we enter into an 80 day volumes at about $13,000 per day. We have no drydocks in this quarter. Our current fleet including the four new building drybulk vessels is shown on slide five. In total, we have 19 vessels including 9 drybulk vessels and 10 container carriers. On slide six, you will find the Euromar fleet, our joint venture with Eton Park and Rhône Capital. Euromar has a fleet of 10 intermediate and handysize container vessels between 1,700 and 3,100 TEUs and one post-Panamax vessel to 5,600 TEUs. The total amount of 175 million committed the equity of which $25 million was from Euroseas has been injected into the company. Euromar’s current cash position is about $24 million with which it may purchase one or two additional vessels. Let’s move to slide eight for a brief overview of the market. The EBITDA increased from 732 points that it was during our Q2 presentation to 11 at the beginning 1400 to 1500 points during the past week. A positive sign as needed uptick during the Q4 period and historically gives a drybulk sector a jump in rates. In more detail let’s first highlight the spot market. Capes dropped from about $13,500 per day at the start of Q3 down to $12,500 per day but recently have strongly recovered to about $25,000 a day. Panamaxes started Q3 at about $3,400 per day fluctuating the way up to $7,500 per day to then drop to $6,600 by the end of Q3. Currently rate of recovery to about $9,500 per day. Supramaxes rose consistently from about 7,000 per day to about 11,000 per day by the end of Q3, we currently have repeated that these two about $9000 a day. As for the warranty at time charter market for Capesize market gradually dropped from $22,000 per day to $18,000 and currently stands at about that level. For Panamaxes, rating sideways from about $10,500 to $10,250 per day and currently a bit lower at around $9,000 per day. For Supramaxes rates gradually dropped from $12,750 per day to $10,000 per day and currently stands at about 9.5 per day. Secondhand vessel prices dropped significantly as they widely expected strong Q3 did not materialized whilst on the other hand new building prices helped. There are signs to an improvement in secondhand valuations should the positive trend represented in the last couple of days continue. Turning to the containership markets, rates there have moved slightly downwards on the smaller geared sizes while activity from Panamax size vessels has been stronger with the rates (inaudible) while secondhand prices have hovered around all-time low levels largely in 2015, new building prices continue to strengthen gradually due to demand for other ship types. Idle fleet has been reduced to around 200,000 TEUs which is the lowest since the summer of 2011, however it will probably rise again in the following couple of the months and start dropping after Q1 2015 as the seasonal slow period enters. Turning to slide nine, we can view the drybulk age profile and order book delivery schedule. The delivery schedule for drybulk vessels in the beginning of 2014 stood at significant 10.4% of the fleet with larger vessels dominating the order book. This however does not take into account cancellations, slippages and scraping. In the past years it has been generally difficult to quantify how much of the order book will actually get delivered this year. First indications are that it will be around 70%. The order book for 2015 is 9.1% and if all these vessels get delivered which is however unlikely given the recent history it may dampen any market recovery. Turning to slide 10, the containership delivery scheduled at the beginning of 2014 stood at 9.5%. Here again, cancellations and slippages will change its original estimate. But this should be only by about 10%. The order book for 2015 stands at 9.8 and of course its average grew towards the larger ships. For 2016, the order book stands at a very low level of 4.1% which gives ground for optimism especially as it seems likely that any new orders that may replace will be able to be delivered before 2017. However cascading is still happening fast which implies the rate of all sizes will get affected. We have seen and we continue to see Panamaxes between 3000 to 5000 TEU being displaced by the new larger ships. At the same time, some of these ships are cascading down to routes up to the recently serve the size of 63 and 1000 and 3000 TEU. A good example is the (inaudible). We believe that in order to see a sustained recovery will lead to see extra capacity absorbed regardless of vessel sizes and then the whole market will move in parallel. Please turn to slide 11. The world economy has not changed much since Q2. While, volatility remains in the US, the growth phase in the world Europe's deflation and uncertain -- uncertainties remained globally. As always there are positive and negative signs and drifting which will prevail in the pace of global growth is more than that in science. Nevertheless, strategy has been developed according towards expectations. Economic data points to the US and the UK has grown quite strongly. In India with a pro-business government elected that have a retail of confidence that it is the only country to see enough provision by the IMF to recent focus now rebound to Europe in the second half of 2014 already. Also, low income developing countries should gain from these monetary policies and the increased demand for developed countries. Importantly, the drop in oil prices should also be a positive driver for stronger growth. On the other hand, instability in the Middle East and Ukraine remained at geopolitical risk. Of course, there is also very slow growth and deflationary concerns in the Eurozone that seem to have any global recovery as well. Despite record low interest rates investment has not pick up and the additional QE measures would be necessary. Growth is also expected to remain subdued in Brazil and Russia. Finally, the most relevant economy to ship in China is also slowing but we believe in the negativity areas -- done as the central government has full grasp to the economy and many means to assure that growth remains at a satisfactory level. Slide 12 shows expectations of world's GDP according to the IMF and shipping demand growth. Projected world GDP in 2014 is now expected to be 3.3% slightly less than what it was three months ago mainly due to the Eurozone Japan and Brazil. China is still expected by the IMF to grow by 7.4% which is normal than previous years but remains quite healthy as continue to support to drybulk sectors. As for 2015, the global economies projected by the IMF to grow slightly less than the expectations in the previous quarter, but still healthier than the last few years at 3.9%. As can be seen on the bottom of the slide 12 (inaudible) projections point to drybulk growth of 4.2% in 2014 less than the 5% expected last quarter. Containerized trade is showing enough fix from the previous quarter to 6% from 5.8%. For 2015, we expect drybulk growth rate to cover a similar levels as to-date once container trade growth rate to show a slight increase driven by the expected global growth rate improvement. Let's turn to slide 13 to summarize our outlook for the drybulk sectors. The drybulk rate outlook remains uncertain and for 2015, the SFA market is now pointing to rise of $8,850 per day for Panamaxes. Currently in 2016 looks as it will be similar to 2015 as supply and demand growth look fairly balanced and the risk of over ordering driven primarily by private equity funds as diminished in the last months and with lower expectations for the market. If these restrains continues, a strong rebounds of the market could be expected in 2017. We feel the (inaudible) of the left side in the market in 2015 and 2016 currently favorably relies on the demand recovery. China remains the main source of drybulk rate growth although its economy seems to be adjusting to a new norm of a lower growth rate. Iron ore impulse is the commodity with great prospects despite elevated stocks at both facilities. There is a question about Chinese coal inputs impulse due to recent Chinese environmental concerns and falling gas prices. On the other hand, there is also some upside for grain inputs. The secondarily but still important dry trade growth engine is India, which may prove a positive catalyst with its drive for infrastructure growth. Operationally however, slow steaming seems to have reached its limits with softening oil prices while both efficiency appears to quickly improve which are both negative factors that will dampen demand as they reduced demand for ships. Let's move to slide 14 to discuss the containership market. We expect demand cost to improve in 2014 and 2016 by 67% although strong conviction in the fragile economic environment. With no moving (inaudible) delivery is expected for '15 and very few for 2016, we expect the supply and demand balance to be neutral in '15 and in favor of demand in 2016 with a gradual improvement of the rates over the next two years. The ordering trends have dominated the market until the end of Q1 2014 seems to have stopped for the time being. However, rumors for ordering of mega vessels from the (inaudible) alliances once again (inaudible) from 2017 onwards prospects. The order book in the sub-Panamax sector seems to be very dry however different saving patterns and cascading have kept rates in that sector still very low. Scrapping, hard scrapping levels and limitations in cascading will eventually grow balanced market. Let us turn to slide 16 to view our own drybulk employment schedule. Our drybulk covers for 2014 currently stands at around 95% and is minimal for 2015. As said previously we are continuing to practice of employing our vessels in short term contracts in the anticipation over the market improvement. So let's turn to slide 17 for our containership employment schedule. We currently have the [Marinas] and looking for employment. All larger vessels grow are practically covered for the remainder of 2014 and opened up some time in 2015. As indicate to drybulk vessels our strategy for our containerships is also to employ them in certain charters between 3 to 12 months in the anticipation of the market improvement. Please turn to slide 18. To review our bulk manager have been aiming to continue to keep our cost very low. The graph in this space compares our daily cost excluding drydock expenses since 2008. Overall our costs remain amongst the lowest to the public shipping companies. For the third quarter of '14, our operational fleet utilization was 100% and our commercial fleet utilization was 99.5%. Our daily cost per vessel for Q3 2014 was in line with our budget and similar to last year. Let's now turn to slide 19, the left side of the slide shows the evolution of time charter rates of Panamax drybulk ships and containers of 1700 TEUs since 2001. After several years when drybulk ship are more than containerships both segments will earn similar rates again in the beginning of 2003. The EU crisis we seriously eroded the container demand and the sales in drybulk (inaudible) over the second half of 2013 push drybulk rates higher again. Where we came back to the same levels as containerships during Q3 only to slightly increase again due to a seasonal Q4 drybulk improvement. The right hand side of slide 19 shows current asset values in the relation to historical prices. Panamaxes prices have regained significantly below the average from 2000 to 2014 while containership prices are still very weak and hovering around their all-time lows. We expect prices to reverse closer to historical levels by 2016-2017 if the global economy improves as the IMF predicts. We believe that we will see a gradual improvement over the next couple of years in the containership market but for drybulk a significantly recovery would probably be a 2017 event. For the time being we are focused on implementing our significant newbuilding program and are examining one dilutive ways to grow the company in anticipation of the recovery market which will strengthen the setbacks and provides us with the further currency to continue grow in the company in user conservative way. With that, I will pass the floor over to our CFO, Tasios Aslidis, to take you through our financials in more detail.

Thank you very much Aristides. Good morning from me, ladies and gentlemen. As usual I will now provide you with a brief overview of our financial results for the three and nine months period ended September 30, 2014. For that let’s turn slide 21, and first take a look at our results for the third quarter 2013 in comparison to the same period of last year. I will repeat here some of the same figures that Aristides gave you in the beginning of the presentation. For the third quarter of 2014, we reported total net revenues of $9.9 million representing a 10.6% increase total net revenues of $9 million during the third quarter of 2013. We reported net loss for the period of $3.7 million, a net loss attributed to common shareholders of $4.1 million as compared to a net loss of $3.8 million for the third quarter of 2013. As Aristides mentioned earlier, the difference between net loss and net loss attributable to common shareholders is $0.4 million the dividends we paid to our Series B Preferred shares in the third quarter 2014. We did not have preferred shares outstanding in the third quarter of 2014. The preferred dividend can be paid at our option either in cash or in kind, but we have elected to pay it in kind for the last three quarters. The results for the third quarter of 2014 include a $0.3 million unrealized gain in the derivatives I am sorry 0.2 million realized loss on derivatives as compared to 0.3 million unrealized gain, 0.4 million loss on derivatives as well as 1.3 million gain on the sale of our vessel for the same period of last year. Basic and diluted loss per share attributable to common shareholders for the third quarter of 2014 was $0.07 compared to basic and diluted loss of $0.08 per share for the third quarter of 2013. Excluding the effect on the loss attributable to common shareholders for the quarter of the unrealized gains and derivatives realized loss on derivatives and the net gain from the sale of vessel in the third quarter of last year, the adjusted net loss per share attributable to common shareholders for the quarter ended September 30, 2014 which have remained $0.07 per shares basic and diluted compared to $0.11 per share basic and diluted loss for the same quarter of last year. Adjusted EBIDTA for the third quarter of this year was negative 0.2 million as well improvement from the negative 0.5 million that we had in the third quarterof2013. On the right hand part of slide 21, we have our nine months results. For the first nine months of 2014, we reported total net revenues of 29 million representing a 1.3% decrease over total net revenues of 29.5 million that we had in the first nine months of last year. We reported a net loss for the period of 11 million and the net loss attributed to common shareholders of 12 million as compared to a net loss of 17.3 million for the first nine months of 2013 again the difference between net loss and net loss attributable to common shareholders is the 1 million of preferred dividends we paid during this year. The results for the first nine months of 2014 include the 0.7 million unrealized gain on derivatives, a 0.7 million realized loss on derivatives as compared to 1.2 million unrealized gain and 1.3 million realized loss and also the 1.9 million loss on the sale of vessels for the same period of last year. Basic and diluted loss per share attributable to common shareholders for the first nine months of 2014 was $0.22 respectively, compared to basic and diluted loss per share of $0.38 for the first nine months of 2013. Excluding again the effect on the loss attributable to common shareholders of the unrealized gain on derivatives, realized loss on derivatives and any loss or gain on sale of vessels, the adjusted net loss per share attributable to common shareholders for the nine-month period ended September 30, 2014 would have been $0.22 compared to loss of $0.34 per share basic and diluted for the same period in 2013. Let's now move to slide 22. In this slide we will provide our fleet performance for the three and nine months period ended September 30, 2013 in comparison with the same periods of last year. As usual we have broken down our presentation of fleet utilization in commercial and operational. Let’s start first with the third quarter 2014 figures during which we reported 99.5% commercial utilization rate and 100% operational utilization rate as compared to 97.3% commercial and 98.3% operational for the same period of 2013. Our utilization rate calculation does not include vessels on drydock or in scheduled repairs during the reporting periods. In the third quarter of 2014, we operated 15 vessels with time charter equivalent of [$7,168] per vessel per day which represents about a 2% decline compared to the time charter equivalent of $7,320 per vessel per day that we achieved during the same period of last year, during which we operated 14.28 vessels. Overall, we believe we’ll continued to maintain one of the lowest operating cost structure among the public shipping companies I think this is one of our competitive advantages in the business. Total operating expenses including management fee, G&A but excluding drydock costs were $6,136 per vessel per day for the third quarter of 2014 as compared to $6,209 per vessel per day for the same period of last year. Let’s now look at the bottom of this table, our daily cash flow breakeven levels presented here on a $1 per vessel per day basis. For the third quarter of 2014, we reported an operating breakeven level including loan repayments of $8,334 per vessel per day as compared to approximately $8,563 per vessels per day for the same period of last year. Let's turn now to the nine months results on the right part of the slide. There in the nine months period we reported 99.6% commercial utilization rate and 99.8% operational utilization rate this year compared to 95.7 commercial, 98.9 operational nine months period of 2013. Again, as with the third quarter, the utilization rate calculation does not include vessels from drydock or in scheduled repairs. In the first nine months of 2014, we operated 14.47 vessels on average and earned the time charter equivalent of about $7,438 per vessel per day, which represents increase of about 7%, compared to the time charter equivalent of $7,953 per vessel per day that we managed to achieve during the same period of last year during which we operated 13.75 vessels. Total operating expenses including management fees G&A but again excluding drydock cost was $6,308 per vessel per day compared to $6,197 per vessel per day for the same period in the first nine months of 2013. Again at the bottom of this table, we can see our cash flow breakeven levels for the nine month periods. For the first nine months of 2014, we reported an operating breakeven level including loan repayments, $10,087 per vessel per day which compares to approximately $9,762 per vessel per day for the same period of last year. These figures include certainly balloon payments that we make which were all subsequently refinanced. Let's now move to slide 23. This slide shows on the right hand side our cash flow breakeven levels that we expect to have over the next 12 months. On the left side we saw our scheduled debt repayments including schedule balloon repayments. As you can see from the chart on the left side, 2014 we are scheduled to make $10 million loan repayments are we have already make $4.6 million balloon repayments, but balloon repayment was refinanced subsequently later this year. Our loan in balloon repayments over the next 12 months amount approximately to $2,640 per vessel per day contribution to our daily cash flow breakeven level and number that you can see on the last row of the table on the right part of the slide. After making assumptions for the other elements that make up our cash flow breakeven level, this operating expenses administrative costs, interest and drydocking expenses, we currently estimate the cash flow breakeven level for the next 12 months of about $10,300 per vessel per day that number again includes loans and balloon repayments. The balloon repayments include that over the next 12 months amount to about $4.9 million without which the breakeven level which have been around $9,400 per vessel per day about $900 over. As I mentioned earlier over the last, we have managed to refinance such balloon payments that we have to make. Let's now move to the next slide, slide 24 and this as usual let me give you some highlights from our balance sheet. As of September 30, 2014, our total cash was about $42.2 million comprised of about $33.5 million of unrestricted cash and about $8.7 million of restricted funds and retention accounts. Our outstanding debt was $57.5 million and as a result our debt to market value for our fleet ratio was about [56%] and our net debt to the market value for our fleet was about 15%. We are happy to report that as of September 30, 2014 we're in compliance with all of our loan covenant. Concluding let me give you a word about our capital commitments. Our newbuilding investment program requires about $120 million and $118 million of funds over the period 2014 to 2016. To-date we have made payments amounting to just below $13 million against those capital commitments. We planned to finance the remaining of these commitments with the equity utilizing the $43.5 million of that we secured via our, refers to the common stock offerings earlier this year and that the range of $70 million to $80 million. In this context, we have received and accepted offers from two banks for the post-delivery financing of two Ultramaxes which are to be delivered in the first quarter of 2015, in the first quarter of 2016 and that financing is in the range of 60% to 65% of the price of the vessels. One of our (inaudible) it's to be delivered also in the fourth quarter of 2015 but that's still need to be refinanced, the vessel is [regarded] to a full year time charter at the rate in excess of $14,000 per day we believe we'll be able to secure financing closure, delivery of the vessels and that way we can minimize commitment and other costs. We believe that in effect finance risk of our newbuilding programs has been removed is up until the last (inaudible) at the end of 2016 is about to be delivered. And with that, let me pass the floor back to Aristides. Aristides J. Pittas: Thank you for listening to us. Do we have any questions?

Thank you. (Operator Instructions) Your first question comes from the Donald McLee. Please ask your question. Donald McLee – Wells Fargo: Good morning guys. It appears the 2015 outlook has softened a bit on both the containership and drybulk side from earlier in the year, how do those relative outlooks compare and how does that affect your growth strategy going forward? Aristides J. Pittas: Yes it is true especially on the drybulk sector that things look a little bit weaker than what they looked at the middle of the year the time when we were all expecting stronger Q3 and Q4 which do not materialized. And also on the container sector it’s a very small adjustment there to our outlook from the beginning of the -- from the middle of the year where some orders have been recorded which has been hidden before bringing the order book a little bit higher and where demand is expected to be just a little bit lower on the general global economy a little bit worse off than what was expected three months ago. Overall what this implies is that in the drybulk sector where we were looking for a significant recovery in 2015 and ‘16 it’s now seems that that we’ll have to wait to 2017. On the container sector its minor adjustments and the market continues to be growing in both ‘15 and ‘16. Donald McLee – Wells Fargo: Got you. And kind of in that same context then given the former outlook for containerships is there any potential for you to move into larger vessel sizes with your current cash position? Aristides J. Pittas: The current cash position does not give us a lot of free way to move convincingly in such a direction, although we think it make sense. So we are looking at possible synergies with others but we nothing finalized yet. Donald McLee – Wells Fargo: Okay that makes sense. And my last question is just on your share repo, how far have you gone on that so far in the quarter and is there any more details?

As you know we have announced the program late in Q3 I think September 25th and we said given all the windows we have very little opportunity to employ the program we have purchased minimal amount of shares. Donald McLee – Wells Fargo: Alright, that’s great guys. Thanks for the time.

(Operator Instructions) As there are no more questions, we now pass the floor back to Mr. Aristides Pittas for closing remarks. Aristides J. Pittas: Thank you all for listening into this quarter’s results and we will be speaking to you again at the beginning of New Year to see how the year ended. Thank you.

Thanks everybody. Happy Thanksgiving to all of you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.