SOURCE: StealthGas Inc.

May 22, 2006 16:05 ET

STEALTHGAS INC. Reports First Quarter 2006 Results

ATHENS, GREECE -- (MARKET WIRE) -- May 22, 2006 -- STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial and operating results for the first quarter period ended March 31, 2006.

First Quarter 2006 Results

For the first quarter ended March 31, 2006, net revenues amounted to $16.9 million and net income for the first quarter was $6.9 million. Earnings per share basic and diluted calculated on 14 million weighted average number of shares outstanding, was $0.50. EBITDA for the first quarter of 2006 was $10.1 million.

An average of 22.4 vessels were owned and operated in the first quarter 2006 earning an average time-charter-equivalent rate of approximately $7,870 per day.

CEO Harry Vafias commented: "We are very pleased with the financial and operational results we have achieved during the first quarter 2006. We have continued with the consistent implementation of our strategy of fleet expansion, maintaining moderate leverage, securing a visible revenue stream, having cost efficient operations and paying stable dividends to our shareholders.

During the first quarter of 2006, we completed the acquisition of three vessels including the final vessel that had been identified at the time of our IPO expanding our fleet to 24 vessels by the end of the quarter. I am pleased to report that as of today, we have entered into agreements to acquire 3 additional vessels with expected delivery by the end of May or early June 2006, thereby further expanding our fleet to a total of 27 vessels. All three vessels to be acquired have immediate period employment ranging from six months to three years. This acquisition solidifies our ranking as number one in owned vessels in the 3,000 to 8,000 CBM segment that is the area of our strategic focus.

In addition, consistent with our strategy of securing a visible revenue stream, as of today, we have period employment for 84% of our fleet of 27 vessels. Additionally, 76% of our fleet is already under period employment for the whole of 2006 and 51% for 2007.

On May 4, 2006, we declared a cash dividend of $0.1875 cents per common share payable on May 25, 2006. This is our second consecutive dividend since we became a public company in October 2005.

Looking at 2006, we expect our profitability to benefit from our expanded fleet and its contracted employment. Our plans are to continue taking advantage of market opportunities and further expand our fleet, enhancing our revenue potential and profitability."

CFO Andrew Simmons commented: "As of March 31, 2006 had all 27 vessels been delivered to us, our leverage would still remain moderate with a debt to capitalization ratio at 48.2%.

Our strong cash flow generation coupled with external financing has supported our growth plans. In this respect, in May 2006 we negotiated a new credit facility with Fortis Bank, which replaces the existing Fortis Bank credit facility. The new credit facility will facilitate the acquisitions of the three additional vessels, the 'Sir Ivor,' the 'Lynne' and the 'Gas Nemesis.' The new credit facility provides for an increased amount of up to $79.8 million with repayment terms over 10 years at a margin of 75 basis points over LIBOR based on the current loan to value ratio, as opposed to the original amount of $ 50.4 million, all of which was fully drawn, with repayment terms over eight years at a margin of 90 basis points over LIBOR under the previous Fortis Bank credit facility. The new credit facility is secured by the nine existing vessels that secured the previous facility plus the three new vessels to be delivered to us by June 2006. It should be noted that 'Sir Ivor' will be acquired for a purchase price of USD 15.7 million and not for USD 16.7 million as previously announced in error on May 8, 2006.

Regarding our dividend policy, our next dividend declaration is intended for August 2006."

Updated Fleet Profile and Fleet Deployment:

The table below describes our fleet development and deployment as of today:

Vessel          Vessel                                             Monthly
                 Size  Vessel Year  Delivered Employment   Charter  Rate
                (cbm)   Type  Built To GASS     Status   Expiration (1*) $

CURRENT FLEET (Initial Fleet plus Identified & Additional Vessels
already delivered to GASS)

Gas Cathar(2)   7,517   F.P.  2001   Oct-05  Time Charter   Aug-07  365,000
Gas Marathon    6,572   F.P.  1995   Nov-05  Bareboat       Oct-07  220,000
Gas Chios       6,562   F.P.  1991   Oct-05  Time Charter   Mar-07  300,000
Gas Amazon (3)  6,526   F.P.  1992   May-05  Time Charter   May -07 300,000
Gas Monarch     5,018   F.P.  1997   Dec-05  Time Charter   Jun-07  295,000
Gas Emperor     5,013   F.P.  1995   Feb-05  Time Charter   Jun-07  245,000
Birgit Kosan    5,012   F.P.  1995   Apr-05  Bareboat       Apr-07  190,000
Catterick       5,001   F.P   1995   Nov-05  Time Charter   Feb-07  300,000
Gas Sincerity   4,123   F.P.  2000   Nov-05  Time Charter   Jul-06  285,000
Gas Spirit(4)   4,112   F.P.  2001   Dec-05  Time Charter   Jun-07  195,000
Gas Zael (5)    4,111   F.P.  2001   Dec-05  Time Charter   Aug-06  199,000
Gas Courchevel  4,109   S.R.  1991   Nov-04  Time Charter   Aug-06  395,000
Gas Prophet     3,556   F.P.  1996   Oct-04  Spot              N/A      N/A
Gas Shangai     3,526   F.P.  1999   Dec-04  Spot              N/A      N/A
Gas Czar(6)     3,510   F.P.  1995   Feb-06  Time Charter   Nov-07  171,250
Gas Legacy      3,500   F.P.  1998   Oct-05  Time Charter   Apr-07  250,000
Gas Fortune(7)  3,500   F.P.  1995   Feb-06  Time Charter   Dec-06  184,000
Gas Eternity    3,500   F.P.  1998   Mar-06  Spot              N/A      N/A
Gas Artic       3,434   S.R.  1992   Apr-05  Bareboat       Apr-09  190,000
Gas Ice         3,434   S.R.  1991   Apr-05  Bareboat       Apr-08  174,250
Gas Crystal     3,211   S.R.  1990   Nov-05  Spot              N/A      N/A
Gas Oracle      3,014   F.P.  1990   Dec-05  Time Charter   May-06  118,000
Gas Prodigy     3,014   F.P.  1995   Oct-05  Time Charter   Dec-06  219,000
Gas Tiny        1,320   S.R.  1991   Oct-04  Time Charter   Dec-06  120,000
Subtotal -      102,195
24 vessels      cbm

ADDITIONAL VESSELS (with expected delivery date)
Lyne (8)        5,014   F.P.  1996   May-06  Bareboat       May-09  163,636
Sir Ivor (9)    5,000   F.P.  2003   May-06  Bareboat       May-09  163,636
Gas Nemesis     5,016   F.P.  1995   June    Time Charter   Dec-06  201,500
(10)                                 2006
Subtotal -      15,030
3 vessels
FLEET TOTAL     117,225
27 VESSELS

F.P.: Fully Pressurized
S.R.: Semi-Refrigerated
(1)   To calculate daily rate divide by 30.4. All rates are quoted on a
      gross basis and do not take into account chartering commissions.
(2)   Gas Cathar is employed until August 2006 at the rate of USD 365,000
      per month. Thereafter Gas Cathar will be employed for a further one
      year period at the rate of USD 355,000.
(3)   Gas Amazon is employed until May 2006 at the rate of USD 420,000 per
      month. Thereafter it will be employed for a further one year period
      at the rate of $ 300,000 per month.
(4)   Gas Spirit is employed until June 2006 at the rate of USD 195,000 per
      month. Thereafter Gas Spirit will be employed for a further one year
      period ending June 2007 at the rate of USD 250,000 per month.
(5)   As of April 03, 2006 "Feisty Gas" was renamed "Gas Zael."
(6)   Gas Czar is employed until November 2006 at the rate of USD 171,250
      per month. The rate for the 12 month period between December 2006 and
      November 2007 will be agreed upon no later than the commencement of
      the charter extension for the 12 months and will range between a
      minimum of USD 190,000 and a maximum of USD 210,000.
(7)   Gas Fortune is employed until December 2006 at the rate of USD
      $ 184,000 per month. Thereafter at charterer's option it can be
      employed for a further one year period at the rate of $ 205,000 per
      month.
(8)   Lyne will be employed under a bareboat charter until May 2009 at the
      rate of USD 163,636. Thereafter, at charterer's option, the bareboat
      charter can extenced a further one year at the rate of USD 171,717.
(9)   Sir Ivor will be employed under a bareboat charter until May 2009 at
      the rate of USD 163,636. Thereafter, at charterer's option, the
      bareboat charter can extenced a further one year at the rate of USD
      171,717. Sir Ivor will be acquired for a purchase price of USD 15.7
      million and not for USD 16.7 million as previously announced.
(10)  Upon its delivery, Gas Nemesis will be employed under an existing
      time charter until December 2006 at the rate of USD 201,500 per
      calendar month.

Fleet Data

The following key indicators highlight the Company's operating performance during first quarter 2006.

FLEET DATA                      First       First
                               Quarter     Quarter
                                 2005        2006
                                ------      ------
Average number of vessels (1)      5.6        22.4
Period end number of vessels
 in fleet                          6.0          24
Total calendar days for
 fleet (2)                         508       2,019
Total voyage days for fleet (3)    496       2,015
Fleet utilization (4)             97.6%       99.9%
Total time charter days for
 fleet (5)                         490       1,897
Total spot market days for
 fleet (6)                           6         118


AVERAGE DAILY RESULTS (in USD)   First      First
                               Quarter     Quarter
                                 2005        2006
                                ------     -------
Time Charter
 Equivalent - TCE (7)           $8,110      $7,870
Vessel operating expenses (8)    2,564       2,148
Management fees                    390         321
General and administrative
 expenses                          207         296
Total vessel operating
 expenses (9)                    2,771       2,444

1) Average number of vessels is the number of vessels that constituted our
   fleet for the relevant period, as measured by the sum of the number of
   days each vessel was a part of our fleet during the period divided by
   the number of calendar days in that period.
2) Total calendar days are the total days the vessels were in our
   possession for the relevant period including off-hire days associated
   with major repairs, drydockings or special or intermediate surveys.
3) Total voyage days for fleet reflect the total days the vessels were in
   our possession for the relevant period net of off-hire days associated
   with major repairs, drydocks or special or intermediate surveys.
4) Fleet utilization is the percentage of time that our vessels were
   available for revenue generating voyage days, and is determined by
   dividing voyage days by fleet calendar days for the relevant period.
5) Total time charter days for fleet are the number of voyage days the
   vessels in our fleet operated on time charters for the relevant period.
6) Total spot market charter days for fleet are the number of voyage days
   the vessels in our fleet operated on spot market charters for the
   relevant period.
7) Time charter equivalent, or TCE, is a measure of the average daily
   revenue performance of a vessel on a per voyage basis. Our method of
   calculating TCE is consistent with industry standards and is determined
   by dividing voyage revenues (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, as
   well as commissions. 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 charters, time charters and bareboat charters) under which the
   vessels may be employed between the periods.
8) Vessel operating expenses, which include crew costs, provisions, deck
   and engine stores, lubricating oil, insurance, maintenance and repairs
   is calculated by dividing vessel operating expenses by fleet calendar
   days for the relevant time period.
9) Total vessel operating expenses, or TVOE, is a measurement of our total
   expenses associated with operating our vessels. TVOE is the sum of
   vessel operating expenses and general and administrative expenses. Daily
   TVOE is calculated by dividing TVOE by fleet calendar days for the
   relevant time period.
EBITDA Reconciliation

EBITDA represents net earnings before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies.

EBITDA is included herein because it is a basis upon which we assess our liquidity position and because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. The Company's definition of EBITDA may not be the same as that used by other companies in the shipping or other industries.

(figures in US $)                     First        First
                                     Quarter      Quarter
                                       2005         2006
                                  -----------  -----------
Net Cash Provided By (Used in)
 Operating Activities             $ 1,200,880  $ 9,291,743
Net increase in current assets,
 excl. cash                           860,920      525,266
Net (increase) in current
 liabilities, excl .short-term       (186,564)  (1,561,271)
Non-cash general & admin.exps         (97,500)           0
Interest income                       (23,073)    (186,060)
Interest & finance costs, net          34,095    1,357,294
Amortization  of financing fees                     (9,919)
Net income of vessel acquired from
 the Vafias Group                                   99,870
Change in fair value of derivatives                642,960
EBITDA                            $ 1,788,758  $10,159,883

(figures in US $)                     First        First
                                     Quarter      Quarter
                                       2005         2006
                                  -----------  -----------
Net Income                        $ 1,636,914  $ 6,958,693
Plus net interest expense              34,095    1,357,294
Less Interest income                  (23,073)    (186,060)
Plus depreciation                     509,393    2,807,660
Plus Amortization of fair value      (368,571)    (777,704)
EBITDA                             $1,788,758  $10,159,883
Conference Call and Webcast:

As already announced, on Tuesday, May 23, 2006 at 10:00 A.M. EST, the company's management will host a conference call to discuss the results and the company's operations and outlook.

Conference Call details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1866 819 7111 (from the US), 0800 953 0329 (from the UK) or +44 (0) 1452 542 301 (Std. International Dial in). Please quote "STEALTHGAS."

In case of any problem with the above numbers, please dial 1866 869 2352 (from the US), 800 694 1449 (from the UK) or +44 (0) 1452 560 304 (Std. International Dial in). Quote "STEALTHGAS."

A telephonic replay of the conference call will be available until May 30, 2006 by dialing 1866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 1452 550 000 (Std. International Dial in). Access Code: 2201616#

Slides and audio webcast:

There will also be a live-and then archived-webcast of the conference call, through the internet through the STEALTHGAS INC. website (www.stealthgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

                            STEALTHGAS INC
             Consolidated Statements of Income (Unaudited)
        For the quarters ended March 31, 2005 and March 31, 2006

(Expressed in United States Dollars)

                                                    FOR THE THREE MONTHS
                                                      ENDED MARCH 31,
                                                      2005         2006
                                                  (restated)*
                                                  ------------ ------------

Revenues
        Voyage revenues                          $  4,197,469 $ 16,937,918
                                                 ------------ ------------

Expenses
        Voyage expenses                               174,902    1,047,825
        Vessels' operating expenses                 1,302,704    4,337,206
        Dry-docking costs                             255,771           --
        Management fees                               198,120      647,799
        General and administrative expenses           105,300      597,181
        Depreciation                                  509,393    2,807,660
                                                 ------------ ------------
Total expenses                                      2,546,190    9,437,671
                                                 ------------ ------------

Income from operations                           $  1,651,279 $  7,500,247
                                                 ------------ ------------

Other revenues and (expense)
        Interest and finance costs, net               (34,095)  (1,357,294)
        Change in fair value of derivatives                --      642,960
        Interest income                                23,073      186,060
        Foreign exchange loss                          (3,343)     (13,280)
                                                 ------------ ------------
Other expenses, net                                   (14,365)    (541,554)
                                                 ------------ ------------

Net income                                       $  1,636,914 $  6,958,693
                                                 ------------ ------------

Earnings per share, basic and diluted            $       0.27 $       0.50
                                                 ============ ============

Weighted average number of shares, outstanding      6,000,000   14,000,000
                                                 ============ ============

* During the course of 2005, the Company acquired a number of ship-owning
  companies from affiliated entities of the Vafias Group ("The Vafias Group
  of LPG Carriers"), which is controlled by the Vafias family. Because the
  Company and the Vafias Group are entities under common control, in
  accordance with US GAAP, the consolidated financial statements of the
  Company must be presented as if the ship-owning companies acquired were
  consolidated subsidiaries of the Company and such accounting resulted in
  the retroactive restatement of the historical financial statements of the
  Company as if "The Vafias Group of LPG Carriers" were consolidated
  subsidiaries of the Company for the period presented.




                            STEALTHGAS INC
                Consolidated Balance Sheets (Unaudited)
        For the periods ended March 31, 2006 and December 31, 2005

(Expressed in United States Dollars)

                                                DECEMBER 31,    MARCH 31,
                                                    2005          2006
                                                               [UNAUDITED]
                                                ------------- -------------
Assets
Current assets
        Cash and cash equivalents               $  23,210,243 $  11,310,749
        Trade receivables                              13,330       115,342
        Claim receivable                                   --        52,124
        Inventories                                   399,624       753,458
        Advances and prepayments                      161,094       178,390
        Fair value of above market acquired
         time charter                                 597,754       409,847
        Restricted cash                             1,634,203     1,098,725
                                                ------------- -------------
Total current assets                               26,016,248    13,918,635
                                                ------------- -------------

Non current assets
        Advances for vessels acquisitions             983,000            --
        Vessels, net                              229,763,864   259,647,669
        Deferred finance charges                      215,656       233,737
        Derivative receivable                              --       575,960
                                                ------------- -------------
Total non current assets                          230,962,520   260,457,366
                                                ------------- -------------
Total assets                                      256,978,768   274,376,001
                                                ------------- -------------

Liabilities and Stockholders' Equity
Current liabilities
        Overdraft facility                            200,000            --
        Payable to related party                    1,549,837     1,737,338
        Trade accounts payable                        984,997     1,488,636
        Other accrued liabilities                   1,635,040     1,874,479
        Fair value of below market acquired
         time charter                               1,443,989       957,378
        Deferred income                             2,284,578     2,915,270
        Current portion of long-term debt          12,627,000    14,643,000
                                                ------------- -------------
Total current liabilities                          20,725,441    23,616,101

Non current liabilities
        Derivative liability                           67,000            --
        Long-term debt                             85,079,000    95,706,250
                                                ------------- -------------
Total liabilities                                 105,871,441   119,322,351
                                                ------------- -------------

Stockholders' equity
        Capital stock 100,000,000 shares
         authorized;14,000,000 shares outstanding
         with a par value of $.01                     140,000       140,000
        Additional paid-in capital                145,883,121   145,595,621
        Retained earnings                           5,084,206     9,318,029
                                                ------------- -------------
Total stockholders' equity                      $ 151,107,327 $ 155,053,650
                                                ------------- -------------
Total liabilities and stockholders' equity      $ 256,978,768 $ 274,376,001
                                                ------------- -------------




                            STEALTHGAS INC
           Consolidated Statements of Cash Flows (Unaudited)
        For the quarters ended March 31, 2005 and March 31, 2006

(Expressed in United States Dollars)

                                                   FOR THE THREE MONTHS
                                                     ENDED MARCH 31,
                                                     2005         2006
                                                  (restated)
Cash flows from operating activities
        Net income for the period                $  1,636,914 $  6,958,693

Items included in net income not affecting
  cash flows:
        Depreciation and Amortization                 509,393    2,817,579
        Amortization of fair value of time
         charter                                     (368,571)    (777,704)
        Non cash general and administrative
         expenses                                      97,500           --
        Net income of vessel acquired from the
         Vafias Group                                      --      (99,870)
        Change in fair value of derivatives                --     (642,960)

Changes in operating assets and liabilities:
        (Increase) in receivable from related
         party                                       (805,207)          --
        (Increase) in trade receivables                (5,728)    (102,012)
        (Increase) in claim receivable                     --      (52,124)
        (Increase) Decrease in inventories             15,385     (353,834)
        (Increase) in advances and prepayments        (65,370)     (17,296)
        Increase in payable to related parties             --      187,501
        Increase (Decrease) in trade accounts
         payable                                      (33,832)     503,639
        Increase in other accrued liabilities         204,060      239,439
        Increase in deferred income                    16,336      630,692
Net cash provided by operating activities           1,200,880    9,291,743

Cash flows from investing activities
        Advances for vessels acquisitions          (2,185,988)          --
        Decrease in restricted cash account                --      535,478
        Acquisition of vessels                    (11,529,927) (31,708,465)
        Fair value of acquired time charter                        479,000
Net cash (used in) investing activities           (13,715,915) (30,693,987)

Cash flows from financing activities
        Capital stock                                  60,000           --
        Additional paid-in capital                 13,568,072           --
        Deemed dividends                                   --     (287,500)
        Dividends paid                                     --   (2,625,000)
        Deferred finance charges                     (162,000)     (28,000)
        Overdraft facility                                 --     (200,000)
        Loan repayment                                     --   (1,356,750)
        Proceeds from long-term debt               28,735,000   14,000,000
Net cash provided by financing activities          42,201,072    9,502,750

Net Increase in cash and cash equivalents          29,686,037  (11,899,494)
Cash and cash equivalents at beginning of period           --   23,210,243
Cash and cash equivalents at end of period       $ 29,686,037 $ 11,310,749

Supplemental Cash Flow Information:
        Cash paid during the period for:
        Interest payments                                  --    1,220,506
About STEALTHGAS INC.

Headquartered in Athens, Greece, STEALTHGAS INC. is a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry. STEALTHGAS INC. currently has a fleet of 24 LPG carriers, and intends to acquire three additional LPG carriers. Once these acquisitions are completed, STEALTHGAS INC.'s fleet will be composed of 27 LPG carriers with a total capacity of 117,225 cubic meters (cbm). STEALTHGAS's shares are listed on NASDAQ and trade under the symbol "GASS."

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our 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 historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although STEALTHGAS 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, STEALTHGAS INC. cannot 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 world economies and currencies, general market conditions, including changes in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in STEALTHGAS INC.'s operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or 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 STEALTHGAS INC. with the US Securities and Exchange Commission.

Visit our website at www.stealthgas.com

Contact Information

  • Company Contact:
    Andrew J. Simmons
    Chief Financial Officer
    STEALTHGAS INC.
    011-30-210-6250-001
    E-mail: simmons@stealthgas.com

    Investor Relations/Media:
    Nicolas Bornozis
    Capital Link, Inc. (New York)
    Tel. 212-661-7566
    E-mail: nbornozis@capitallink.com