SOURCE: StealthGas Inc.

March 02, 2006 16:48 ET

STEALTHGAS INC. Reports Fourth Quarter and Full Year 2005 Results

ATHENS, GREECE -- (MARKET WIRE) -- March 2, 2006 -- STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today financial and operating results for the fourth quarter and results for the full year period ended December 31, 2005.

Basis of Presentation:

During the course of 2005, STEALTHGAS INC. ("the Company") acquired a number of ship-owning companies from affiliated entities of the Vafias Group ("The Vafias Group of LPG Carriers"). 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 as of the dates indicated in the notes in the financial statements. 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 all periods presented.

However, in order to enable investors to also monitor the actual development of STEALTHGAS INC. during the fourth quarter of 2005 and the full year 2005, this Press Release provides information in two ways, first without the consolidation of "the Vafias Group of LPG Carriers" and then with it, in accordance with US GAAP. The information which includes the consolidation of "the Vafias Group of LPG Carriers" is presented in the Appendix which includes the financial statements.

Fourth Quarter 2005 Results (Without the Consolidation of "The Vafias Group of LPG Carriers"):

For the fourth quarter ended December 31, 2005, net revenues amounted to $12.8 million and net income for the fourth quarter was $4.5 million. Earnings per share basic and diluted for the fourth quarter, calculated on 13,565,217 weighted average number of shares outstanding, were $0.33. EBITDA for the fourth quarter of 2005 was $7.2 million.

An average of 15.1 vessels were owned and operated in the fourth quarter 2005 earning an average time-charter-equivalent rate of approximately $8,155 per day.

Full Year 2005 Results (Without the Consolidation of "The Vafias Group of LPG Carriers"):

For the full year period ended December 31, 2005, net revenues amounted to $ 29.3 million and net income amounted to $12.2 million. Earnings per share basic and diluted for the full year period ended December 31, 2005, calculated on 7,906,849 weighted average number of shares outstanding, were $1.54. EBITDA for the full year period ended December 31, 2005 was $18.0 million.

An average of 9.3 vessels were owned and operated in the full year period ended December 31, 2005 earning an average time-charter-equivalent rate of approximately $8,032 per day.

CEO Harry Vafias commented: "We are very pleased to report these strong results for the fourth quarter of 2005 and for the full year 2005. We are also happy to report that we have delivered on our promises to our shareholders. When we became public in October 2005, we had a fleet of 9 vessels and plans to acquire 10 additional LPG carriers, which had already been identified. We have taken delivery of 9 of the identified vessels, with the last to be delivered by early March 2006, and we have acquired 5 additional vessels, putting us ahead of our acquisition schedule as outlined on our road show prior to our successful IPO in October 2005. So, as of today, we have a fleet of 23 LPG carriers, with an average age of 10.8 years. We rank number one in owned vessels in the 3,000 to 8,000 CBM segment, which is the area of our strategic focus. Furthermore, in January 2006, we declared and paid on schedule our first dividend of $0.1875 per common share.

"Looking at 2006, we expect our profitability to benefit from the fact that all of our 24 vessels will be fully operational as of March 2006. Our strategy is to pursue stable growth with predictable cash flows and in this context 72% of our fleet days in 2006 are already secured under period time charters. Furthermore, our plans are to take advantage of market opportunities and continue expanding our fleet, thereby further enhancing our revenue potential and profitability.

"Charter rates for handysize LPG carriers -- those with a cargo carrying capacity between 3,000 and 8,000 cbm -- continued to be stable during the fall 2005. For example a 3,500 semi-refrigerated vessel earned $10,000 per day during the fall while so far in the first quarter charter rates for this type of vessel averaged $11,000 per day. At the present time charter rates for both pressurized and semi-refrigerated ships are stronger in the Mediterranean and Continent regions. We believe that charter rates may strengthen further during the winter months thereby enabling us to renew these expiring charters and enter into additional contracts for our fleet at better or at least comparable levels. As expected rates for refrigerated vessels were higher in all regions than rates for pressurized vessels."

CFO Andrew Simmons commented: "As of December 31, 2005, had all 24 vessels been delivered to us, our leverage would still remain moderate with a debt capitalization ratio at 42.4%.

"Our strong cash flow generation coupled with external financing can support our fleet expansion plans. In October 2005, we negotiated a $ 50 million ten-year term secured credit facility with DnB Nord Bank to facilitate further vessel acquisitions, with terms that we consider highly competitive and favorable.

"This has since been expanded by a further $14 million on the same basis to part fund the acquisitions of the Gas Czar and the Gas Eternity.

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

Updated Fleet Profile and Fleet Deployment:

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

Updated Fleet Profile and Fleet Deployment:
    The table below describes our fleet development and deployment
       as of today:

Vessel   Vessel  Vessel  Year  Delivered   Employment  Charter    Monthly
          Size    Type   Built  To GASS     Status    Expiration  Rate
                 (cbm)                                            (1*) $
-------------------------------------------------------------------------
CURRENT FLEET (Initial Fleet plus Identified Vessels & Additional Vessels
               already delivered to GASS)
-------------------------------------------------------------------------
Gas
 Cathar(2) 7,517  F.P.   2001  Oct 2005  Time Charter August 2007 365,000
Gas
 Marathon  6,572  F.P.   1995  Nov 2005  Bareboat     Oct 2007    220,000
Gas
 Chios     6,562  F.P.   1991  Oct 2005  Time Charter March 2007  300,000
Gas
 Amazon    6,526  F.P.   1992  May 2005  Time Charter May 2006    420,000
Gas (3)
 Monarch   5,018  F.P.   1997  Dec 2005  Time Charter June 2007   295,000
Gas
 Emperor   5,013  F.P.   1995  Feb 2005  Time Charter June 2007   245,000
Birgit
 Kosan     5,012  F.P.   1995 April 2005 Bareboat     April 2007  190,000
Catterick  5,001  F.P    1995  Nov 2005  Time Charter Feb. 2007   300,000
Gas
 Sincerity 4,123  F.P.   2000  Nov 2005  Time Charter July 2006   285,000
Gas
 Spirit(4) 4,112  F.P.   2001  Dec 2005  Time Charter June 2007   195,000
Feisty
 Gas       4,111  F.P.   2001  Dec 2005  Time Charter August 2006 199,000
Gas (5)
Courchevel 4,109  S.R.   1991  Nov 2004  Time Charter August 2006 395,000
Gas
 Prophet   3,556  F.P.   1996  Oct 2004  Spot         N/A         N/A
Gas
 Shangai   3,526  F.P.   1999  Dec 2004  Spot         N/A         N/A
Gas
 Czar(6)   3,510  F.P.   1995  Feb 2006  Time Charter Nov 2007    171,250
Gas
 Legacy    3,500  F.P.   1998  Oct 2005  Time Charter April 2007  250,000
Gas
 Fortune   3,500  F.P.   1995  Feb 2006  Time Charter Dec. 2006   184,000
Gas
 Artic     3,434  S.R.   1992  Apr 2005  Bareboat     April 2009  190,000
Gas
 Ice       3,434  S.R.   1991  Apr 2005  Bareboat     April 2008  174,250
Gas
 Crystal   3,211  S.R.   1990  Nov 2005  Spot         N/A         N/A
Gas
 Oracle    3,014  F.P.   1990  Dec 2005  Time Charter May 2006    118,000
Gas
Prodigy(7) 3,014  F.P.   1995  Oct 2005  Time Charter Dec. 2006   219,000
Gas
 Tiny      1,320  S.R.   1991  Oct 2004  Time Charter Nov. 2006   120,000

Subtotal –
23 vessels  98,695
-------------------------------------------------------------------------
REMAINING IDENTIFIED VESSELS (with expected delivery date)
-------------------------------------------------------------------------
Gas
 Eternity  3,500  F.P.   1998  March 2006 Spot        N/A          N/A
Subtotal –
1 vessel   3,500
FLEET TOTAL
24 VESSELS 102,195cbm

--  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 a rate of $365,000 per
    month. Thereafter Gas Cathar will be employed for a further one year period
    at a rate of $355,000.
--  (3) As of February 24, 2005 "Sweet Dream" was renamed "Gas Monarch".
--  (4) Gas Spirit is employed until June 2006 at a rate of $ 195,000 per
    month. The rate for the 12-month period between June 2006 and June 2007
    will be agreed no later than the end of February 2006 and will range
    between a minimum of $250,000 and a maximum of $350,000.
--  (5) Gas Courchevel trades in the spot market until early March 2006.
--  (6) Gas Czar is employed until November 2006 at a rate of $ 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
    $190,000 and a maximum of $210,000.
--  (7) Gas Prodigy is employed until late March/early April 2006 at a
    rate of $125,000 per month. It will be employed at $219,000 thereafter.
    

Fleet Data (Without the consolidation of "The Vafias Group of LPG Carriers")

The following key indicators highlight the Company's operating performance during fourth quarter 2005 and the full year 2005.

FLEET DATA                          Fourth Quarter 2005   Full Year 2005
-------------------                 ------------------- -------------------
Average number of vessels (1)                      15.1                 9.3
Total calendar days for fleet (2)                 1,387               3,382
Total voyage days for fleet (3)                   1,383               3,378
Fleet utilization (4)                             99.7%               99.9%
Total time charter days for fleet (5)             1,334               3,324
Total spot market days for fleet (6)                 49                  54

AVERAGE DAILY RESULTS               Fourth Quarter 2005   Full Year 2005
---------------------               ------------------- -------------------
Time Charter Equivalent - TCE (7)                 8,155               8,032
Vessel operating expenses (8)                     2,277               2,097
Management fees                                     371                 341
General and administrative expenses                 307                 229
Total vessel operating expenses (9)               2,584               2,326
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 (Without the consolidation of "The Vafias Group of LPG Carriers")

STEALTHGAS INC. considers EBITDA to represent 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 $)                   Fourth Quarter 2005     Full Year 2005
Net Cash Provided By (Used in)
 Operating Activities                         9,785,950         23,476,401
Net increase in current assets,
 excluding cash                              (1,280,578)          (742,021)
Net (increase) in current
 liabilities, excluding current
 portion of long term debt.                  (1,880,388)        (5,771,068)
Non-cash G&A expenses                                 -           (243,750)
Interest income                                (453,083)          (770,453)
Interest and finance costs                    1,029,315          2,190,660
Amortization of finance fees                    (26,531)           (41,343)
Profit/(Loss) on derivatives                      7,000            (67,000)
EBITDA                                        7,181,685         18,031,426


(figures in US $)                   Fourth Quarter 2005     Full Year 2005
Net Income                                    4,536,106         12,209,138
Plus net interest expense                       576,232          1,420,207
Plus depreciation                             2,069,347          4,402,081
EBITDA                                        7,181,685         18,031,426

Stealth Maritime Corp. to manage two of STEALTHGAS INC.'s vessels:

As already announced, "Gas Eternity" and "Gas Prophet" will be managed by Stealth Maritime Corp. as of February 2006 and March/April 2006 respectively. Stealth Maritime Corp., STEALTHGAS's affiliated manager, has recently hired two highly experienced operational and technical managers in the LPG sector namely Mr. Christos Vlachos and Captain Zannis Paschalis. Thus, over time STEALTHGAS INC. will be reducing its outsourced third party technical managers from four to three in number.

This development will allow the company to monitor the performance of the outsourced managers as measured against its own capabilities, keeping the competitive tendering process in tact. It will also allow STEALTHGAS INC. to further develop its own expertise within its affiliated management company, Stealth Maritime Corp.

Election of a fifth board member:

STEALTHGAS INC. is pleased to announce that at the last meeting of the Board of Directors held on Friday, February 10, 2006, Mr. Markos Drakos was elected to the Board and was also elected Chairman of the Audit Committee. With Mr. Drakos' election, the Board of Directors expands to a total of five Directors and strengthens its financial expertise.

Mr. Drakos was a founding partner of Touche Ross & Co. in 1988 (later renamed Deloitte & Touche) and served as Co-Managing Partner of the Nicosia office until 2002. Following the December 2002 reorganization of Deloitte & Touche in Cyprus, he set up the Markos Drakos Consultants Group which is effectively the successor to the consultancy, special services and international business division of Deloitte & Touche, Nicosia. Mr. Drakos' experience also includes the specialization on the offshore and shipping industry with active participation in the Offshore, Shipping & Foreign Investment Committee of the Institute of Certified Public Accountants of Cyprus and developed a client base in this respect to include several important multinational clients. Between 2000 and 2003, Mr. Drakos served as Vice Chairman of the Cyprus Telecommunications Authority, which is the premier Telecom operator of Cyprus. Mr. Drakos also acts as Director to a number of major international and local Companies. He holds a BSC in Economics from the London School of Economics, he is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Institute of Certified Public Accountants of Cyprus.

Conference Call and Webcast:

As already announced, on Friday, March 3rd at 9:00 AM 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 (from outside the US). 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 (from outside the US). Quote "STEALTHGAS."

A telephonic replay of the conference call will be available until Friday, March 3, 2006 by dialing 1866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 1452 550 000 (from outside the US). 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.

APPENDIX

Basis of Presentation and General Information:

(With the Consolidation of The "Vafias Group of LPG Carriers"):

The accompanying consolidated financial statements include the accounts of STEALTHGAS INC. and its wholly owned subsidiaries (collectively, the "Company") which, as of December 31, 2005 owned a fleet of twenty-one liquefied petroleum gas carriers providing worldwide marine transportation services under long, medium or short-term charters. STEALTHGAS INC. was formed under the laws of Marshall Islands on December 22, 2004.

As of December 31, 2004, under the direction of Stealth Maritime Corporation S.A. the shareholders of the vessel owning companies contributed all of their issued and outstanding shares of common stock to STEALTHGAS INC. and STEALTHGAS INC. became the sole owner of all the outstanding shares of all the subsidiaries mentioned in note 1a. below. The transaction described above constitutes a reorganization of companies under common control, and has been accounted for in a manner similar to a pooling of interests, as each ship-owning company was, indirectly, wholly owned by and under the common control of the Vafias Group prior to the transfer of ownership of the companies to STEALTHGAS INC. Accordingly, the consolidated financial statements of the Company have been presented as if the ship-owning companies were consolidated subsidiaries of the Company as of the dates indicated and using the combined historical carrying costs of the assets and the liabilities of the ship-owning companies listed in note 1a below.

The vessels noted in 1c. "Vafias Group of LPG Carriers" were acquired by the affiliates of the Vafias Group from unrelated parties. The "Vafias Group of LPG Carriers" were acquired by the Company with a portion of the proceeds of the offering. The Company and the Vafias Group of LPG Carriers are entities that are commonly controlled by the Vafias Group. Due to these relationships and the common control therein, the acquisition of the Vafias Group of LPG Carriers by the Company, was accounted for as a combination of entities under common control in a manner similar to a pooling of interests. 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 all periods presented.

(a) Ship-owning companies acquired by STEALTHGAS INC. in 2004:

    Name of Company           Vessel Name      Acquisition Date    cbm³
    -----------------------------------------------------------------------
    VCM Trading Ltd.          Gas Prophet      October 12, 2004    3,516.44
    LPGONE Ltd.               Gas Tiny         October 29, 2004    1,319.96
    Geneve Butane Inc         Gas Courchevel   November 24, 2004   4,102.00
    Matrix Gas Trading Ltd.   Gas Shanghai     December 7, 2004    3,525.92

(b) Ship-owning companies acquired by StealthGas Inc. in 2005:

    Name of Company           Vessel Name      Acquisition Date    cbm³
    -----------------------------------------------------------------------
    Pacific Gases Ltd.        Gas Emperor      February 2, 2005    5,009.07
    Semichlaus Exports Ltd.   Gas Ice          April 7, 2005       3,434.08
    Ventspils Gases Ltd.      Gas Arctic       April 7, 2005       3,434.08
    Industrial Materials Inc. Birgit Kosan     April 11, 2005      5,013.33
    Aracruz Trading Ltd.      Gas Amazon       May 19, 2005        6,562.41
    Soleil Trust Inc.         Gas Sincerity    November 14, 2005   4,128.98
    East Propane Inc.         Catterick        November 24, 2005   5,001.41
    Petchem Trading Inc.      Gas Spirit       December 16, 2005   4,112.18
    Malibu Gas Inc.           Feisty Gas       December 16, 2005   4,111.24


(c) Vafias' Group of LPG carriers:

    Name of Company           Vessel Name      Acquisition Date    cbm³
    -----------------------------------------------------------------------
    Gaz De Brazil Inc.        Gas Prodigy      October 15, 2004    3,014.59
    Independent Trader Ltd.   Gas Oracle       April 26, 2005      3,014.59
    Continent Gas Inc.        Gas Chios        May 20, 2005        6,562.09
    Empire Spirit Ltd.        Sweet Dream      May 31, 2005        5,018.35
    Jungle Investment Limited Gas Cathar       July 27, 2005       7,517.18
    East Technologies Ltd.    Gas Crystal      July 28, 2005       3,211.04
    Quicksilver Shipping      Gas Legacy       August 26, 2005     3,513.79
     Limited
    Triathlon Gas Inc.        Gas Marathon     October 3, 2005     6,572.20

The vessels Gas Crystal, Gas Legacy and Gas Marathon were sold to the
subsidiaries of the Company, called Iceland Ltd., Northern Yield Shipping
Ltd. and Triathlon Inc. during the fourth quarter of 2005.

(d) Ship-owning company with advance on vessel delivered in year 2006:
    Advances of $ 983,000 were made in the year 2005 for the acquisition of
    the following vessel in the year 2006.

    Name of Company           Vessel Name                          cbm³
    -----------------------------------------------------------------------
    Balkan Holding Inc.       Islas Gas tbr. Gas Czar              3,509.65


Fleet Data

FLEET DATA                            Fourth Quarter 2005   Full Year 2005
Average number of vessels (1)                        17.2             11.9
Total calendar days for fleet (2)                   1,585            4,334
Total voyage days for fleet (3)                     1,581            4,288
Fleet utilization (4)                                99.7%            98.9%
Total time charter days for fleet (5)               1,532            4,105
Total spot market days for fleet (6)                   49              183

AVERAGE DAILY RESULTS                 Fourth Quarter 2005   Full Year 2005
Time Charter Equivalent - TCE (7)                   8,125            7,919
Vessel operating expenses (8)                       2,092            2,099
Management fees                                       337              340
General and administrative expenses                   272              180
Total vessel operating expenses (9)                 2,364            2,279

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.




                            STEALTHGAS INC.
                  Consolidated Statements of Income
    For the quarters ended December 31, 2004 and December 31, 2005

(Expressed in United States Dollars)
                                      Fourth Quarter      Fourth Quarter
                                           2004                 2005
                                        (restated)
                                        -----------          -----------
Revenues
   Voyage revenues                      $ 2,048,006          $13,816,745
                                        -----------          -----------

Expenses
   Voyage expenses                          341,203              970,346
   Vessels' operating expenses              759,010            3,314,930
   Dry-docking cost                              --               20,373
   Management fees                          111,540              533,830
   General and administrative expenses       35,100              431,879
   Depreciation                             264,458            2,219,000
                                        -----------          -----------
Total expenses                            1,511,311            7,490,358
                                        -----------          -----------

Income from operations                      536,695            6,326,387
                                        -----------          -----------

Other revenues and (expense)
   Interest and finance costs, net               --           (1,123,095)
   Income/Loss on derivatives                    --                7,000
   Interest income                               47              454,235
   Foreign exchange loss                     (5,534)              (6,104)
Other expenses, net                          (5,487)            (667,964)
                                        -----------          -----------

Net income                                  531,208            5,658,423
                                        -----------          ===========

Earnings per share, basic and diluted          0.09                 0.42
                                        ===========          ===========

Weighted average number of shares,
 outstanding                              6,000,000           13,565,217
                                        ===========          ===========
                          STEALTHGAS INC.
                 Consolidated Statements of Income
For the period ended December 31, 2004 and the year ended December 31, 2005

(Expressed in United States Dollars)
                                       Period ended     Full Year ended
                                    December 31, 2004  December 31, 2005
                                        (restated)
                                       --------------   --------------
Revenues
  Voyage revenues                      $    2,048,006   $   36,644,591
                                       --------------   --------------
Expenses
  Voyage expenses                             341,203        2,688,155
  Vessels' operating expenses                 759,010        9,095,576
  Dry-docking costs                                --          470,384
  Management fees                             111,540        1,473,080
  General and administrative expenses          35,100          779,539
  Depreciation                                264,458        5,611,942
                                       --------------   --------------
Total expenses                              1,511,311       20,118,676
                                       --------------   --------------
Income from operations                        536,695       16,525,915
                                       --------------   --------------
Other revenues and (expense)
  Interest and finance costs, net                  --       (2,685,207)
  Income/Loss on derivatives                       --          (67,000)
  Interest income                                  47          780,434
  Foreign exchange loss                        (5,534)         (18,091)
Other expenses, net                            (5,487)      (1,989,864)
                                       --------------   --------------
Net income                                    531,208       14,536,051
                                       ==============   ==============
Earnings per share, basic and diluted            0.09             1.84
                                       ==============   ==============
Weighted average number of shares,
 outstanding                                6,000,000        7,906,849
                                       ==============   ==============


                                STEALTHGAS INC.
                          Consolidated Balance Sheets
            December 31, 2004 (restated) and December 31, 2005

(Expressed in United States Dollars)
                                    December 31, 2004  December 31, 2005
                                         (restated)
Assets                                 --------------   --------------
Current assets
  Cash and cash equivalents            $           --   $   23,210,243
  Receivables from related party            1,162,470               --
  Trade receivables                            19,623           13,330
  Inventories                                 124,846          399,624
  Advances and prepayments                      9,130          161,094
  Fair value of acquired time charter              --          597,754
  Restricted cash                                  --        1,634,203
                                       --------------   --------------
Total current assets                   $    1,316,069   $   26,016,248
                                       --------------   --------------
Non current assets
  Advances for vessels acquisitions         1,905,282          983,000
  Vessels, net                             37,396,018      229,763,864
  Deferred finance charges                         --          215,656
                                       --------------   --------------
Total non current assets               $   39,301,300   $  230,962,520
                                       --------------   --------------
Total assets                           $   40,617,369   $  256,978,768
                                       --------------   --------------
Liabilities and Stockholders' Equity
Current liabilities
   Overdraft facility                              --          200,000
   Payable to related party                        --        1,549,837
   Trade accounts payable                     495,925          984,997
   Other accrued liabilities                  360,818        1,635,040
   Fair value of acquired time charter      1,842,857        1,443,989
   Deferred income                            534,413        2,284,578
   Current portion of long-term debt               --       12,627,000
                                       --------------   --------------
Total current liabilities              $    3,234,013   $   20,725,441
                                       --------------   --------------
Non current liabilities
   Derivative liability                            --           67,000
   Long-term debt                                  --       85,079,000
                                       --------------   --------------
Total liabilities                      $    3,234,013   $  105,871,441
                                       --------------   --------------
Stockholders' equity
  Capital stock 14,000,000
   shares authorized and outstanding
   with a par value of $.01                    60,000          140,000
  Additional paid-in capital               36,792,148      145,883,121
  Retained earnings                           531,208        5,084,206
                                       --------------   --------------
Total stockholders' equity             $   37,383,356   $  151,107,327
Total liabilities and                  --------------   --------------
 stockholders' equity                  $   40,617,369   $  256,978,768
                                       --------------   --------------
                             STEALTHGAS INC.
                  Consolidated Statements of Cash Flows


(Expressed in United States Dollars)
                                           December 31,      December 31,
                                               2004              2005
                                            (restated)
                                          ------------       ------------
Cash flows from operating activities
  Net income for the period/year          $    531,208       $ 14,536,051

Items included in net income not
 affecting cash flows:
  Depreciation and amortization                264,458          5,653,286
  Amortization of fair value of
   time charter                               (307,143)        (1,907,622)
  Non cash general and administrative
   expenses                                     35,100            243,750
  Net loss of vessels acquired from the
   Vafias Group                                                    16,947
  Loss on derivative                                 -             67,000

Changes in operating assets and
 liabilities:
 (Increase) decrease in receivable from
   related party                            (1,162,470)         1,162,470
 (Increase) decrease in trade receivables      (19.623)             6,293
 (Increase) in inventories                    (124,846)          (274,778)
 (Increase) in advances and prepayments         (9,130)          (151,964)
  Increase in payable to related party               -          1,549,837
  Increase in trade accounts payable           495,925            489,072
  Increase in other accrued liabilities        360,818          1,274,222
  Increase in deferred income                  534,413          1,750,165
                                          ------------       ------------
Net cash provided by operating activities      598,710         24,414,729
                                          ------------       ------------

Cash flows from investing activities
  Advances for vessels acquisitions         (1,905,282)          (983,000)
  Increase in restricted cash account                -         (1,634,203)
  Acquisition of vessels                   (37,660,476)      (196,074,506)
  Fair value of acquired time charter        2,150,000            911,000
                                          ------------       ------------
Net cash used in investing activities      (37,415,758)      (197,780,709)
                                          ------------       ------------
Cash flows from financing activities
  Capital stock                                 60,000             80,000
  Additional paid-in capital                36,757,048         62,752,877
  Initial Public Offering                            -        116,000,000
  Issuance costs                                     -         (8,694,657)
  Deemed dividends                                   -         (6,312,500)
  Vafias group of LPG carriers                                (54,898,497)
  Dividends paid                                     -        (10,000,000)
  Deferred finance charges                           -           (257,000)
  Overdraft facility                                 -            200,000
  Loan repayment                                     -        (42,294,000)
  Proceeds from long-term debt                       -        140,000,000
                                          ------------       ------------
Net cash provided by financing
 activities                                 36,817,048        196,576,223
                                          ------------       ------------
Net Increase in cash and cash equivalents            -         23,210,243
Cash and cash equivalents at beginning of
 period/year                                         -                  -
                                          ------------       ------------
Cash and cash equivalents at end of
 period/year                                         -         23,210,243
                                          ------------       ------------
Supplemental Cash Flow Information:
  Cash paid during the period for:
   Interest payments                      $          -       $  2,130,228
                                          ------------       ------------
EBITDA Reconciliation

STEALTHGAS INC. considers EBITDA to represent 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 $)                  Fourth Quarter 2005     Full Year 2005
Net Cash Provided By (Used in)
 Operating Activities                        7,061,620         24,414,729
Net increase in current assets,
 excluding cash                             (2,741,425)          (742,021)
Net (increase) in current liabilities,
 excluding current portion of long
 term debt.                                  3,081,893         (5,063,296)
Non-cash G&A expenses                                0           (243,750)
Net Loss of vessels acquired from
 Vafias group                                  (16,947)           (16,947)
Interest income                               (454,235)          (780,434)
Interest and finance costs                   1,123,095          2,685,207
Amortization of finance fees                   (24,805)           (41,344)
Profit/(Loss) on derivatives                     7,000            (67,000)
EBITDA                                       8,036,196         20,145,144

(figures in US $)                  Fourth Quarter 2005     Full Year 2005
Net Income                                   5,658,423         14,536,051
Plus net interest expense                      668,860          1,904,773
Plus depreciation                            1,708,913          3,704,320
EBITDA                                       8,036,196         20,145,144
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 23 LPG carriers, and intends to acquire 1 additional LPG carrier. Once this acquisition is completed, STEALTHGAS INC.'s fleet will be composed of 24 LPG Carriers with a total capacity of 102,416 cubic meters (cbm). STEALTHGAS INC.'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: Email Contact

    Investor Relations/Media:
    Nicolas Bornozis
    Capital Link, Inc.(New York)
    Tel. 212-661-7566
    E-mail: Email Contact