ATHENS, GREECE, Â Â Â March 22, 2010.Â 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 fourth quarter and twelve months ended December 31, 2009.
Fourth Quarter 2009 Results:
For the three months ended December 31, 2009, voyage revenues amounted to $28.4 million, an increase of $0.2 million, or 0.7%, compared to voyage revenues of $28.2 million for the three months ended December 31, 2008. The net loss for the three months ended December 31, 2009 was $27.2 million or $(1.22) per share, a decrease of $34.9 million, from net income of $7.7 million or $0.35 per share for the three months ended December 31, 2008.
For the three months ended December 31, 2009, the Company had a $1.4 million realized cash loss on interest rate swap arrangements, a $3.0 million unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements, as well as a $9.9 million non-cash impairment loss on vessels held for sale. This compares to a realized cash loss of $0.2 million and an unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements of $0.03 million for the three months ended December 31, 2008. The Company also had a $10.75 million loss in consideration of the previously announced agreement to cancel the acquisition of the Stealth Argentina in addition to the already paid deposit.
Voyage and operating expenses for the three months ended December 31, 2009 were $3.4 million and $10.0 million respectively compared to $2.3 million and $8.2 million for the three months ended December 31, 2008. These increases were due primarily to the increased level of spot market activity with 957 spot voyage days in the fourth quarter of 2009 compared to 379 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.
Adjusted EBITDA for the three months ended December 31, 2009 was a loss of $17.6 million, a decrease of $33.5 million, or 210.7%, from an income of $15.9 million for the three months ended December 31, 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 and the cancellation of Stealth Argentina acquisition discussed above, our net income was $2.2 million, or $0.10 per share for the three months ended December 31, 2009, as compared to a net income $7.8 million, or $0.35 per share, for the three months ended December 31, 2008, a decrease of $5.6 million or 71.8%.
The decline in operating net income after non-cash items is mainly attributable to lower revenues due to an increase in the number of waiting days between cargoes 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 $1.4 million realized cash loss on interest rate swap arrangements for the three months ended December 31, 2009 as compared to a $0.2 million loss on these instruments in the same quarter for 2008.Â
An average of 42.8 vessels were owned by the Company in the three months ended December 31, 2009, earning an average time-charter equivalent rate of approximately $6,399 per day as compared to 39.6 vessels, earning an average time-charter equivalent rate of $7,132 per day for the same period of 2008.Â
Twelve Months 2009 Results
For the twelve months ended December 31, 2009, voyage revenues amounted to $113.0 million and net loss was $ 13.3 million, an increase of $0.4 million, or 0.4%, and a decrease of $43.3 million, or 144.3%, respectively, from voyage revenues of $112.6 million and net income of $30.0 million for the twelve months ended December 31, 2008. For the twelve months ended December 31, 2009 net loss includes 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 loss for the twelve months ended December 31, 2009 also includes an impairment loss of $9.9 million on vessels held for sale compared to zero for the twelve months ended December 31, 2008, plus a $10.75 million loss due to the previously announced cancellation of the delivery of the Stealth Argentina in addition to the already paid deposit.
Basic and diluted loss per share was $(0.60) for the twelve months ended December 31, 2009 as compared to basic and diluted earnings per share of $1.35 for the twelve months ended December 31, 2008.
For the twelve months ended December 31, 2009, the Company had a $4.8 million realized cash loss and a $1.5 million unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements. This compares to a realized cash loss of $1.2 million and an unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements of $1.5 million for the twelve months ended December 31, 2008.
Adjusted EBITDA for the twelve months ended December 31, 2009 was $22.1 million, a decrease of $39.4 million, or 64.1%, from $61.5 million for the twelve months ended December 31, 2008.Â A reconciliation of Adjusted EBITDA to Net Income and to Net Cash provided by operating activities is set forth below.Â
Before non-cash items and the loss attributable to the sale of a vessel, the cancellation of the delivery of the Stealth Argentina and the impairment loss on vessels held for sale described above our net income was $15.3 million or $0.69 per share for the twelve months ended December 31, 2009, as compared to net income of $29.8 million before a $1.7 million gain on the sale of vessels for the twelve months ended December 31, 2008, a decrease of $14.5 million or 48.7%.
An average of 42.0 vessels were owned by the Company in the twelve months ended December 31, 2009, earning an average time-charter equivalent rate of approximately $6,727 per day as compared to 38.6 vessels, earning an average time-charter equivalent rate of $7,588 per day for the same period of 2008.Â
Common Stock Repurchase Programme.
The Company also announced that at the meeting of the Board of Directors held today March 22, 2010 the Board of Directors unanimously authorised a repurchase programme of the Companyâs common stock of up to $15,000,000.
CEO Harry Vafias commented
In our press release for the first quarter of 2009 I stated that 2009 and probably beyond would be very challenging. This proved to be the case last year and as we begin 2010 I believe it will continue to be so at least until the latter part of this year.
During 2009 we have tried to mitigate the effects of increased commercial downtime of our vessels and softer spot rates by being highly diligent regarding our cost base and towards the end of the year and into 2010 we have embarked upon the sale of a number of our older and smaller vessels, and we were pleased to announce last week the profitable sale of the Gas Texiana and the sale of the Gas Prophet. These sales will further enhance our already strong balance sheet, reduce debt, increase our cash resources and remove a number of ships that may well have been trading for most of this year in what we expect to be a relatively soft spot market. These measures will, I believe, allow the Company to be well positioned going into 2011 and beyond when there is an expectation that our core LPG market sector will improve.
We have no deliveries of vessels to the Company scheduled for this year, and I am pleased to report that we have seen significant interest from the shipping finance community in regard to the financing of the five LPG vessels that we have on order, four for delivery next year and one in 2012. I would also like to reiterate that due to our prudent financial stewardship of the Company, and the relative steadiness of the value of our LPG fleet we have not resorted to any dilutive share equity offerings in 2009, and with our current share price standing at a circa 60% discount to our net asset value the Company, in my opinion, remains extremely undervalued.
I expect 2010 to be in the main also a challenging year, but at the current relatively low spot charter levels the Company is still comfortably generating enough cash to meet all of its other obligations and debt service. Ideally we would prefer, as in previous years, to have more of our fleet on period charter but as we expect the market to tighten somewhat as we move towards 2011 we are at this time resisting to some extent period business so we can take advantage of any upturn as it materializes.
We look forward with a significant degree of confidence to the future. We have taken measures some of which in the short term may appear painful which will I believe prove to be prudent going forward and we will continue to strengthen our balance sheet as we move through 2010. I am pleased to report that we retain the confidence of our lending banks both existing and new. In addition our core sector has demonstrated its relative steadiness and resilience, even during this significant economic downturn.
Finally, as well as seeking to best position the Company for the future we have taken the decision today to commence the re-purchase of a portion of the Companyâs common stock. We hope that this measure coupled with the outlook for the Company going forward will enhance the Companyâs share price and that it will more closely reflect the value of the business.
At todayâs meeting, the Companyâs Board of Directors decided to continue the suspension of dividend payments to shareholders.
Fleet Profile and Fleet Deployment:
The table below shows the Companyâs fleet development and deployment as of today:
LPG Carrier Fleet
Product Tanker Fleet
â¢Â Â Â F.P.: Fully-Pressurized
â¢Â Â Â S.R.: Semi-Refrigerated
â¢Â Â Â M.R.: Medium Range
(1) Earliest date charters could expire.Â Most charters include options to shorten or extend their term.
(2) Gas Texiana formerly the Birgit Kosan will be delivered to her new owners during March 2010.
(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. The vessel is expected to be delivered to her new owners at the end of April 2010.
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.Â STEALTHGAS INC. currently has a fleet of 37 LPG carriers with a total capacity of 166,730 cubic meters (cbm) and three M.R. product tankers.Â In addition, the company has entered into an agreement to sell the Gas Texiana during March 2010 and the Gas Eternity at the end of April 2010 plus agreements to acquire five new building LPG carriers with expected delivery from February 2011 through May 2012. Once these sales and acquisitions are completed, STEALTHGAS INC âs fleet will be composed of 40 LPG carriers with a total capacity of 188,218 cubic meters (cbm) and three M.R. product tankers with a total capacity of 140,000 deadweight tons (dwt).Â STEALTHGAS INC âs shares are listed on the NASDAQ Global Select Market and trade under the symbol âGASSâ.
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, managementâs 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 INCâs 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
Andrew J. Simmons
Chief Financial Officer
The following key indicators highlight the Companyâs operating performance during the fourth quarters ended December 31, 2008 and December 31, 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.Â 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.Â
Adjusted EBITDA reconciliation for the fourth quarters ended December 31, 2008 and December 31, 2009:
On Monday, March 22, 2010 at 11:00 A.M. EDT, the companyâs management will host a conference call to discuss the results and the companyâs 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 1299 (UK Toll Free Dial In).Â
In case of any problems with the above numbers, please dial +1 718 354 1385 (US Toll Dial In), or +44 (0)20 7136 6283 (Standard International Dial In). Please quote "4344123".
A telephonic replay of the conference call will be available until March 28, 2010 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: 4344123#
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.