Bay Street News

STEALTHGAS INC. Reports Third Quarter 2018 Financial and Operating Results

ATHENS, Greece, Nov. 23, 2018 (GLOBE NEWSWIRE) — 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 results ended September 30, 2018.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

Third Quarter 2018 Results:

Nine Months 2018 Results:

Fleet Update Since Previous Announcement

The Company announced the conclusion of the following chartering arrangements:  

With these charters, the Company has currently total contracted revenues of approximately $151 million. Total anticipated voyage days of our fleet is 84% covered for the remainder of 2018 and 59% for 2019.

Board Chairman Michael Jolliffe Commented

A temporary slowdown of the Asian LPG market was the main driver of our third quarter’s performance. The third quarter of the year usually has a soft element due to seasonal factors but in addition this quarter market conditions in Asia were less favorable than usual as we witnessed some charterers not renewing time charter vessels in direct continuation thus leaving more than usual vessels to operate in the spot market. This impacted our revenues. The market in Asia has now corrected itself and time charter fixing has picked up, as is evident from the eleven new time charters we have concluded since our last earnings report.

The most important aspect of our segment, however, is that the fundamentals, that is increasing LPG production and consumption, a very low orderbook, and an ageing global fleet, continue to drive our market. We feel optimistic for the couple of years ahead as rates are in our opinion likely to increase even further.

StealthGas as the largest owner in the sector with a relatively young fleet is well positioned to seize this opportunity. We have concluded our fleet expansion program, enhanced our cash base, have agreed to sell seven mostly older vessels since the beginning of 2018 and are therefore ready to create value from our market’s significant potential upside.

Conference Call details:

On November 23, 2018 at 11:00 am ET, the company’s management will host a conference call to discuss the results and the company’s operations and outlook.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers:
800-289-0571 (US Toll Free Dial In) or 0800 279 7204 (UK Toll Free Dial In).
Access Code: 3666837.                                
           
In case of any problems with the above numbers, please dial +1 929-477-0324 (US Toll Dial In), +44 (0)330 336 9411 (Standard International Dial In).
Access Code: 3666837.

A telephonic replay of the conference call will be available until November 30, 2018 by dialing +1 719-457-0820 (US Local Dial In), +44 (0) 207 660 0134  (UK Local Dial In).
Access Code: 3666837.           

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.

About STEALTHGAS INC.

StealthGas Inc. is a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry.  StealthGas Inc. currently has a fleet of 50 vessels. The fleet comprises of 46 LPG carriers, including two chartered in LPG vessels, with a total capacity of 302,662 cubic meters (cbm),three M.R. product tankers and one Aframax oil tanker with a total capacity of 255,804 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 drydockings, shipyard performance, changes in STEALTHGAS INC’s operating expenses, including bunker prices, drydocking 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.

Fleet List and Fleet Deployment
For information on our fleet and further information:
Visit our website at www.stealthgas.com

Company Contact:
Fenia Sakellaris
STEALTHGAS INC.
011-30-210-6250-001
E-mail: info@stealthgas.com

Fleet Data:
The following key indicators highlight the Company’s operating performance during the quarters ended September 30, 2017 and September 30, 2018.

FLEET DATA Q3 2017 Q3 2018 9M 2017 9M 2018
Average number of vessels (1) 52.9   51.3   53.1   51.8  
Period end number of owned vessels in fleet 52   49   52   49  
Total calendar days for fleet (2) 5,052   4,994   15,047   14,859  
Total voyage days for fleet (3) 4,984   4,944   14,895   14,700  
Fleet utilization (4) 98.7 % 99.0 % 99.0 % 98.9 %
Total charter days for fleet (5) 4,223   3,993   12,541   11,934  
Total spot market days for fleet (6) 761   951   2,354   2,766  
Fleet operational utilization (7) 95.4 % 96.1 % 95.9 % 95.8 %

1) Average number of vessels is the number of owned 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 for fleet are the total days the vessels we operated 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 we operated 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 charter days for fleet are the number of voyage days the vessels operated on time or bareboat charters for the relevant period.
6) Total spot market charter days for fleet are the number of voyage days the vessels 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.

Reconciliation of Adjusted Net (Loss)/Income, EBITDA, adjusted EBITDA and adjusted EPS:

Adjusted net income represents net (loss) before loss/(gain) on derivatives excluding net swap interest paid, share based compensation, loss on sale of vessels and impairment. EBITDA represents net (loss) before interest and finance costs, interest income and depreciation. Adjusted EBITDA represents EBITDA before share based compensation, loss/(gain) on derivatives, loss on sale of vessels and impairment loss. EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are not recognized measurements under U.S. GAAP. Our calculation of EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS may not be comparable to that reported by other companies in the shipping or other industries.  In evaluating Adjusted EBITDA, Adjusted net income and Adjusted EPS, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.

EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are included herein because they are a basis, upon which we assess our financial performance. They allow us to present our performance from period to period on a comparable basis and provide additional information on fleet operational results to investors.

(Expressed in United States Dollars,
except number of shares)
Third Quarter Ended
September 30th,
 Nine Months Period Ended
September 30th,
  2017   2018   2017   2018  
Net Loss – Adjusted Net Income        
Net loss (2,261,375 ) (787,292 ) (1,966,542 ) (6,958,345 )
Loss/(gain) on derivatives 77,231   (19,684 ) 305,611   18,102  
Less swap interest (paid)/received (84,433 ) 20,311   (329,393 ) (61,428 )
Loss on sale of vessels, net 72,793   544,446   72,793   763,925  
Impairment loss 3,235,383   567,587   6,461,273   8,161,964  
Share based compensation 36,699     108,901    
Adjusted Net Income 1,076,298   325,368   4,652,643   1,924,218  
         
Net Loss – EBITDA        
Net loss (2,261,375 ) (787,292 ) (1,966,542 ) (6,958,345 )
Plus interest and finance costs 4,419,964   6,099,122   12,175,138   17,277,218  
Less interest income (84,654 ) (180,270 ) (234,679 ) (408,893 )
Plus depreciation 9,812,055   10,139,858   29,259,875   31,123,799  
EBITDA 11,885,990   15,271,418   39,233,792   41,033,779  
         
Net Loss – Adjusted EBITDA        
Net loss (2,261,375 ) (787,292 ) (1,966,542 ) (6,958,345 )
Loss/(gain) on derivatives 77,231   (19,684 ) 305,611   18,102  
Loss on sale of vessels, net 72,793   544,446   72,793   763,925  
Impairment loss 3,235,383   567,587   6,461,273   8,161,964  
Share based compensation 36,699     108,901    
Plus interest and finance costs 4,419,964   6,099,122   12,175,138   17,277,218  
Less interest income and other income (84,654 ) (180,270 ) (234,679 ) (408,893 )
Plus depreciation 9,812,055   10,139,858   29,259,875   31,123,799  
Adjusted EBITDA 15,308,096   16,363,767   46,182,370   49,977,770  
         
EPS – Adjusted EPS        
Net loss (2,261,375 ) (787,292 ) (1,966,542 ) (6,958,345 )
Adjusted net income 1,076,298   325,368   4,652,643   1,924,218  
Weighted average number of shares 39,802,885   39,860,563   39,802,885   39,860,563  
EPS – Basic and Diluted (0.06 ) (0.02 ) (0.05 ) (0.17 )
Adjusted EPS-Basic and Diluted 0.03   0.01   0.12   0.05  


StealthGas Inc.

Unaudited Consolidated Statements of Operations
(Expressed in United States Dollars, except for number of shares)

          Three Month Periods
Ended September 30,
  Nine Month Periods Ended
September 30,
          2017*   2018     2017*   2018  
                 
Revenues                    
  Revenues     38,546,367     42,724,098     113,910,188     125,800,443  
  Revenues – related party     —       —     1,973,643      
Total revenues     38,546,367     42,724,098     115,883,831     125,800,443  
                       
Expenses                    
  Voyage expenses     3,217,318     5,263,514     10,359,281     14,141,821  
  Voyage expenses – related party   476,045     530,458     1,437,700     1,550,958  
  Charter hire expenses   880,840     1,765,756     2,637,782     4,411,162  
  Vessels’ operating expenses   15,077,768     15,419,010     43,615,062     45,564,128  
  Vessels’ operating expenses – related party 31,288     143,500     783,692     265,500  
  Drydocking costs     614,676     818,634     2,539,789     2,975,682  
  Management fees – related party   1,814,325     1,796,365     5,468,410     5,349,465  
  General and administrative expenses   870,807     587,513     2,232,610     2,005,353  
  Depreciation     9,812,055     10,139,858     29,259,875     31,123,799  
  Impairment loss     3,235,383     567,587     6,461,273     8,161,964  
  Loss on sale of vessels, net   72,793     544,446     72,793     763,925  
  Other operating costs/(income)   237,873       —     783,863     (549,804 )
Total expenses     36,341,171     37,576,641     105,652,130     115,763,953  
                       
Income from operations   2,205,196     5,147,457     10,231,701     10,036,490  
                       
Other (expenses)/income                
  Interest and finance costs   (4,419,964 )   (6,099,122 )   (12,175,138 )   (17,277,218 )
  (Loss)/gain on derivatives     (77,231 )   19,684     (305,611 )   (18,102 )
  Interest income and other income 84,654     180,270     234,679     408,893  
  Foreign exchange (loss)/gain   (54,030 )   (35,581 )   47,827     (108,408 )
Other expenses, net     (4,466,571 )   (5,934,749 )   (12,198,243 )   (16,994,835 )
                       
Net Loss       (2,261,375 )   (787,292 )   (1,966,542 )   (6,958,345 )
                       
Loss per share                  
– Basic & Diluted     (0.06 )   (0.02 )   (0.05 )   (0.17 )
                       
Weighted average number of shares              
– Basic & Diluted     39,802,885     39,860,563     39,802,885     39,860,563  
                           

*We adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “ASC 606”) as of January 1, 2018 utilizing the modified retrospective method of transition. As such, the comparative information has not been restated and continues to be reported under the accounting standards in effect for periods prior to January 1, 2018. Under the modified retrospective approach, the Company recognized the cumulative effect of adopting this standard as an adjustment amounting to $0.3 million to decrease the opening balance of Retained Earnings as of January 1, 2018 which consists of $0.6 million of voyage revenue representing performance obligations satisfied in 2018 partly offset by $0.3 million of deferred costs representing costs such as bunker expenses and port expenses, incurred prior to commencement of loading that were recognized in 2018.


StealthGas Inc.

Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars)

              December 31,   September 30,
              2017    2018 
                   
Assets                
Current assets              
  Cash and cash equivalents       51,754,131     64,792,513  
  Trade and other receivables       3,853,992     4,464,190  
  Other current assets           —     134,301  
  Claims receivable         15,951       —  
  Inventories         2,762,299     4,241,562  
  Advances and prepayments       1,221,029     1,484,528  
  Restricted cash         3,231,323     2,901,924  
  Vessels held for sale           —     12,559,120  
Total current assets         62,838,725     90,578,138  
                   
Non-current assets              
  Advances for vessels under construction     61,577,818       —  
  Vessels, net         862,061,906     953,302,887  
  Other receivables         243,075     102,585  
  Restricted cash         7,917,738     12,419,731  
  Deferred finance charges     941,760      
  Fair value of derivatives           645,169     2,355,156  
Total non-current assets       933,387,466     968,180,359  
Total assets         996,226,191     1,058,758,497  
                   
Liabilities and Stockholders’ Equity            
Current liabilities              
  Payable to related party       14,209,624     8,875,631  
  Trade accounts payable       10,509,465     13,736,877  
  Accrued and other liabilities       5,880,479     7,082,207  
  Customer deposits         1,820,700     1,336,000  
  Deferred income         4,362,056     4,979,758  
  Current portion of long-term debt       41,966,607     48,615,702  
Total current liabilities         78,748,931     84,626,175  
                   
Non-current liabilities              
  Fair value of derivatives       126,525       —  
  Customer deposits         736,000       —  
  Deferred gain on sale and leaseback of vessels     190,087     44,207  
  Deferred income     4,035       —  
  Long-term debt         342,941,841     406,118,683  
Total non-current liabilities       343,998,488     406,162,890  
Total liabilities         422,747,419     490,789,065  
                   
Commitments and contingencies         —       —  
                   
Stockholders’ equity              
  Capital stock         442,850     442,850  
  Treasury stock         (22,523,528 )   (22,523,528 )
  Additional paid-in capital       501,471,768     501,471,768  
  Retained earnings         93,469,787     86,167,261  
  Accumulated other comprehensive loss     617,895     2,411,081  
Total stockholders’ equity       573,478,772     567,969,432  
Total liabilities and stockholders’ equity     996,226,191     1,058,758,497  


StealthGas Inc.

Unaudited Consolidated Statements of Cash Flows
(Expressed in United States Dollars)

                    Nine Month Periods Ended September 30,  
                    2017   2018  
Cash flows from operating activities                    
  Net loss for the period             (1,966,542 )   (6,958,345 )  
Adjustments to reconcile net income to net cash                  
  provided by operating activities:                    
  Depreciation               29,259,875     31,123,799    
  Amortization of deferred finance charges           510,071     659,472    
  Amortization of deferred gain on sale and leaseback of vessels       (145,879 )   (145,880 )  
  Share based compensation             108,901       —    
  Change in fair value of derivatives             (23,782 )   (43,326 )  
  Impairment loss               6,461,273     8,161,964    
  Loss on sale of vessels, net             72,793     763,925    
Changes in operating assets and liabilities:                  
  (Increase)/decrease in                    
  Trade and other receivables             (446,179 )   (1,037,553 )  
  Other current assets                   159,363    
  Claims receivable               (235,706 )   15,951    
  Inventories               (293,407 )   (1,905,970 )  
  Advances and prepayments             18,110     (263,499 )  
  Increase/(decrease) in                    
  Balances with related parties             636,680     (5,333,993 )  
  Trade accounts payable             1,107,032     3,659,191    
  Accrued liabilities               224,177     541,728    
  Deferred income               (601,488 )   543,667    
Net cash provided by operating activities           34,685,929     29,940,494    
Cash flows from investing activities                    
  Insurance proceeds               181,240        
  Proceeds from sale of vessels, net             5,635,957     26,568,375    
  Vessels’ acquisitions and advances for vessels under construction   (55,386,807 )   (108,185,418 )  
Net cash used in investing activities           (49,569,610 )   (81,617,043 )  
Cash flows from financing activities                    
  Deferred finance charges             (646,506 )   (444,330 )  
  Customer deposits paid                 (1,220,700 )  
  Loan repayments               (32,358,742 )   (45,159,945 )  
  Proceeds from long-term debt             32,500,000     115,712,500    
Net cash (used in)/provided by financing activities           (505,248 )   68,887,525    
                           
Net (decrease)/increase in cash, cash equivalents and restricted cash           (15,388,929 )   17,210,976    
Cash, cash equivalents and restricted cash at beginning of year           73,531,645     62,903,192    
Cash, cash equivalents and restricted cash at end of period           58,142,716     80,114,168    
Cash breakdown                      
  Cash and cash equivalents             41,297,542     64,792,513    
  Restricted cash, current             10,074,983     2,901,924    
  Restricted cash, non-current             6,770,191     12,419,731    
Total cash, cash equivalents and restricted cash shown in the statements of cash flows       58,142,716     80,114,168