StealthGas INC

ATHENS, GREECE,  November 17, 2009.  STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial and operating results for the third quarter and nine months ended September 30, 2009.

Third Quarter 2009 Results:

For the three months ended September 30, 2009, voyage revenues amounted to $28.4 million, a decrease of $0.5 million or 1.7%, compared to voyage revenues of $28.9 million for the three months ended September 30, 2008. Net income for the three months ended September 30, 2009 was $7.2 million or $0.32 per share, an increase of $1.8 million, from net income of $5.4 million or $0.24 per share for the three months ended September 30, 2008.

For the three months ended September 30, 2009, the Company had a $1.8 million realized cash loss and a $4.5 million unrealized non-cash profit on interest rate swap arrangements and foreign currency hedging arrangements. This compares to a realized cash loss of $1.1 million and to an unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements of $0.9 million for the three months ended September 30, 2008.

Voyage and operating expenses for the three months ended September 30, 2009 were $2.7 million and $9.6 million respectively compared to $1.6 million and $8.8 million for the three months ended September 30, 2008, these increases were due primarily to the increased level of spot market activity with 763 spot voyage days in the third quarter of 2009 compared to just 216 spot voyage days in the same period last year. Under spot voyage charters we are responsible for all voyage expenses including fuel, port and canal fees. Net income was also affected by increased depreciation expenses as there was an average of four more vessels in the Company’s fleet in the third quarter of 2009 compared to the same period last year.

Adjusted EBITDA for the three months ended September 30, 2009 was $16.6 million, an increase of $3.1 million, or 23.0% from $13.5 million for the three months ended September 30, 2008. A reconciliation of Adjusted EBITDA to Net Income and to Net Cash Provided by Operating Activities is set forth below.

Before the non-cash items discussed above, net income was $2.7 million, or $0.12 per share for the three months ended September 30, 2009, as compared to $6.3 million, or $0.28 per share, for the three months ended September 30, 2008, a decrease of $3.6 million or 57.1%.

The decline in net income after non-cash items continues to be mainly attributable to lower revenues due to an increase in the number of idle days where vessels were unemployed and lower charter rates being obtained in the spot market, as well as increased costs mainly in voyage expenses as a consequence of an increase in the number of ships operating in the spot market compared to the same quarter in 2008. Net income was also adversely affected by a $1.8 million realized cash loss on interest rate swap arrangements for the three months ended September 30, 2009 as compared to a $1.1 million loss on these instruments in the same quarter for 2008. 

An average of 42.9 vessels were owned by the Company in the three months ended September 30, 2009, earning an average time-charter equivalent rate of approximately $6,564 per day as compared to 38.7 vessels, earning an average time-charter equivalent rate of $7,681 per day for the same period of 2008. 

Nine Months 2009 Results

For the nine months ended September 30, 2009, voyage revenues amounted to $84.7 million and net income was $13.8 million, an increase of $0.3 million, or 0.4%, and a decrease of $8.4 million, or 37.8%, respectively, from voyage revenues of $84.4 million and net income of $22.2 million for the nine months ended September 30, 2008. For the nine months ended September 30, 2009 net income included a loss on the sale of vessel of $0.8 million compared to a profit of $1.7 million on the sale of vessels in the same period in 2008. Net income for the nine months ended September 30, 2009 net of the loss on the sale of vessel was $14.6 million compared to $20.5 million for the same period in 2008, excluding the gain of $1.7 million on the sale of vessels in that period.

Basic and diluted earnings per share were $0.62 for the nine months ended September 30, 2009 as compared to basic earnings per share of $1.01 and diluted earnings per share of $1.00 for the nine months ended September 30, 2008.

For the nine months ended September 30, 2009, the Company had a $3.4 million realized cash loss and a $1.5 million unrealized non-cash profit on interest rate swap arrangements and foreign currency hedging arrangements. This compares to a realized cash loss of $1.1 million and an unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements of $1.4 million for the nine months ended September 30, 2008.

Adjusted EBITDA for the nine months ended September 30, 2009 was $39.8 million, a decrease of $5.8 million, or 12.7%, from $45.6 million for the nine months ended September 30, 2008.  A reconciliation of Adjusted EBITDA to Net Income and to Net Cash provided by operating activities is set forth below. 

Before non-cash items and the loss attributable to the sale of a vessel described above net income was $13.1 million or $0.59 per share for the nine months ended September 30, 2009, as compared to $22.0 million, or $0.99 per share for the nine months ended September 30, 2008, a decrease of $8.9 million or 40.5% excluding the gain on the sale of vessels in that period.

An average of 41.8 vessels were owned by the Company in the nine months ended September 30, 2009, earning an average time-charter equivalent rate of approximately $6,840 per day as compared to 38.2 vessels, earning an average time-charter equivalent rate of $7,747 per day for the same period of 2008. 

CEO Harry Vafias commented
“I am very pleased to report that we increased our EBITDA compared to the third quarter of last year which given current market conditions was I believe a highly commendable performance by the Company.

Market conditions for our vessels continued to be challenging in the third quarter of 2009, though as seen from the charter statistics contained herein the rates achieved by our vessels held up relatively well given the continued sluggishness of economic activity, though not unexpectedly we have experienced some increased levels of commercial downtime. This relative steadiness of rates during the past year is what I believe underpins the financial strength of our company, along with the conservative structure of our balance sheet especially in regard to our leverage and the value of our fleet.

As we move hopefully into a more positive economic climate later in 2010, led most probably by increased economic activity in the Far East, where we have the majority of our ships trading, we are cautiously hopeful that we will start to see some improvement in charter rates.
In the meantime we continue to pay close attention to costs and to preserving adequate levels of liquidity in the business to negotiate what we expect will be continued challenges at least during most of 2010.

Our continued solid performance in the face of severe economic challenges will hopefully be well received by the investment community and the market will further understand and give credit for the value that exists in the company, which in my opinion continues not to be reflected either by its market capitalization or various value matrixes.”

CFO Andrew Simmons said
“ We now have only one ship to be delivered to us in November 2009, thereafter we have no significant capital expenditures until the five LPGs we have ordered begin their deliveries to us in early 2011. These ships will begin to arrive in our fleet at a time of expected contraction in the overall size of the Handy Size LPG carrier fleet, and hopefully by then a worldwide economic recovery will be well underway. These factors should make these acquisitions to our fleet well timed. This relatively low level of capital expenditure over the next fifteen months will also help us to maintain a healthy level of liquidity going forward which we consider to be key in this environment. ”

Quarterly Dividend:

At today’s meeting, the Company’s Board of Directors decided to continue the suspension of dividend payments to shareholders.

Fleet Profile and Fleet Deployment:

The table below shows the Company’s fleet development and deployment as of today:

LPG Carrier Fleet

Product Tanker Fleet

• F.P.: Fully-Pressurized
• S.R.: Semi-Refrigerated
• M.R.: Medium Range

(1) Earliest date charters could expire.  Most charters include options to shorten or extend their term.
(2) From mid-January 2010 the Gas Zael will commence a new 12 month time charter to an oil major
(3) The Charterer of the Gas Evoluzione had the option of extending this charter for a further year upon its expiry in April 2010 but this was not exercised.
(4) Gas Eternity has for the duration of its bareboat charter been renamed the M.T. Yu Tian 9. 
(5) Stealth Argentina, a 50,500 deadweight M.R. type product carrier, is expected to be delivered in November 2009.  Upon her delivery she will be deployed under a three-year bareboat charter.
 
              
About STEALTHGAS INC.

Headquartered in Athens, Greece, STEALTHGAS INC. is a ship-owning company primarily serving the liquified petroleum gas (LPG) sector of the international shipping industry.  STEALTHGAS INC. currently has a fleet of 40 LPG carriers with a total capacity of 176,999 cubic meters (cbm) and three M.R. product tankers.  In addition, the company has entered into agreements to acquire five new building LPG carriers with expected delivery from February 2011 through May 2012 and one resale new building M.R. product carrier with expected delivery in November 2009.  Once these acquisitions are completed, STEALTHGAS INC.’S fleet will be composed of 45 LPG carriers with a total capacity of 206,999 cubic meters (cbm) and four M.R. product tankers with a total capacity of 190,500 deadweight tons (dwt).  STEALTHGAS INC.’S shares are listed on the NASDAQ Global Select Market and trade under the symbol “GASS”.

Forward-Looking Statements

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 charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry dockings, changes in STEALTHGAS INC’s operating expenses, including bunker prices, dry-docking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, 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 U.S. Securities and Exchange Commission.

Visit our website at www.stealthgas.com
 
Company Contact:
Andrew J. Simmons
Chief Financial Officer
STEALTHGAS INC.
011-30-210-6250-001
E-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Fleet Data:

The following key indicators highlight the Company’s operating performance during the third quarters ended September 30, 2008 and September 30, 2009.

The following key indicators highlight the Company’s operating performance during the nine months ended September 30, 2008 and September 30, 2009.


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, drydockings 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) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days (excluding commercially idle days) by fleet calendar days for the relevant period.
8) 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.
9) 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.
10) Total operating expenses, or TOE, is a measurement of our total expenses associated with operating our vessels. TOE is the sum of vessel operating expenses and general and administrative expenses. Daily TOE is calculated by dividing TOE by fleet calendar days for the relevant time period.

Adjusted EBITDA Reconciliation:

Adjusted EBITDA represents net earnings before interest, taxes, depreciation, amortization and amortization of fair value of acquired time charters.  Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by the United States generally accepted accounting principles, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies in the shipping or other industries.

Adjusted EBITDA is included herein because it is a basis upon which we assess our financial performance and liquidity position and because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. 

Adjusted EBITDA reconciliation for the third quarters ended September 30, 2008 and September 30, 2009:

Adjusted EBITDA reconciliation for the nine months ended September 30, 2008 and September 30, 2009:

On Tuesday, November 17, 2009 at 11:00 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: 1888 935 4577 (US Toll Free Dial In) or 0800 028 1277 (UK Toll Free Dial In). 

In case of any problems with the above numbers, please dial +1 718 354 1387 (US Toll Dial In), or +44 (0)20 7136 6283 (Standard International Dial In). Please quote "6493080".
 
A telephonic replay of the conference call will be available until November 24, 2009 by dialing 1866 932 5017 (US Toll Free Dial In), 0800 358 7735 (UK Toll Free Dial In) or +44 (0)207 111 1244 (Standard International Dial In). Access Code: 6493080#

Slides and audio webcast:
There will also be a live-and then archived webcast of the conference call, 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.