STEALTHGAS INC. Reports Fourth Quarter and Twelve Months Ended December 31, 2017 Financial and Operating Results

ATHENS, Greece, Feb. 22, 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 fourth quarter and twelve months ended December 31, 2017.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

  • Operational utilization of 97.2% in Q4 ‘17 (94.2% in Q4 ‘16).
  • Commercial off hire days reduced by about 58% on a year on year basis.
  • 65% of fleet days secured on period charters for the remainder of 2018, with a total of approximately $196 million in contracted revenues.
  • Successful delivery of two more 22K semi ref newbuild vessels, the Eco Ice and the Eco Arctic in January 2018 increasing our asset base to around $ 1.1 billion.
  • Reduction of fleet average age, following our new deliveries and the sale of older vessels from 9.6 years at the beginning of 2017 to 9.2 years to date.
  • Revenues of $38.4 million in Q4 ‘17, an increase of 2.4% compared to Q4 ‘16
  • Net income of approximately $750 thousand in Q4 ‘17 compared to $4.4 million loss in Q4 ‘16.
  • EBITDA of $14.9 million in Q4 ‘17 compared to $ 9.3 million in Q4 ‘16.
  • Low gearing as debt to assets stands at about 39%.
  • Cash on hand of about $51.8 million, with operating cash flow of $52.4 million.

Fourth Quarter 2017 Results:

  • Revenues for the three months ended December 31, 2017 amounted to $38.4 million, an increase of $0.9 million, or 2.4%, compared to revenues of $37.5 million for the three months ended December 31, 2016, mainly due to increased fleet operational utilization and an increase in market rates, which were partially offset by a reduced number of vessels in the fleet and lower tanker rates.
  • Voyage expenses and vessels’ operating expenses for the three months ended December 31, 2017 were $3.9 million and $15.0 million respectively, compared to $3.7 million and $14.5 million respectively, for the three months ended December 31, 2016. The $0.2 million increase in voyage expenses was mainly attributed to a quarter on quarter increase of average bunker prices by 19%. The 3.4% increase in vessels’ operating expenses compared to the same period of 2016 was mostly due to the operation of larger vessels in the time charter and spot market (one product tanker and one 22,000 cbm LPG vessel), and increased maintenance costs for some vessels of our fleet. Inversely these were partly offset by the lower average number of vessels compared to the same quarter of 2016.
  • Drydocking costs for the three months ended December 31, 2017 and 2016 were $1.0 million and $0.4 million, respectively. The costs for the fourth quarter of 2017 corresponded to the drydocking of two vessels, while in the same period of 2016 the Company completed the drydocking of one vessel.
  • Depreciation for the three months ended December 31, 2017 was $9.7 million, a $0.2 million decrease from $9.9 million for the same period of last year. This decrease was due to the net reduction of three vessels from our fleet.
  • Included in the fourth quarter 2017 results were net losses from interest rate derivative instruments of $0.1 million compared to net losses of $0.2 million in the same period of last year. Interest paid on interest rate derivative instruments amounted to $0.1 million compared to $0.2 million in the same period of last year.
  • As a result of the above, for the three months ended December 31, 2017, the Company reported a net income of $0.7 million, compared to a net loss of $4.4 million for the three months ended December 31, 2016. The weighted average number of shares for the three months ended December 31, 2017 and 2016 was 39.8 million. Earnings per share, basic and diluted, for the three months ended December 31, 2017 amounted to $0.02 compared to loss per share of $0.11 for the same period of last year.
  • Adjusted net income was $0.8 million or $0.02 per share for the three months ended December 31, 2017 compared to adjusted net income of $1.6 million or $0.04 per share for the same period of last year.
  • EBITDA for the three months ended December 31, 2017 amounted to $14.9 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
  • An average of 50.9 vessels were owned by the Company during the three months ended December 31, 2017, compared to 53.7 vessels for the same period of 2016.

Twelve Months 2017 Results:

  • Revenues for the twelve months ended December 31, 2017, amounted to $154.3 million, an increase of $10.2 million, or 7.1%, compared to revenues of $144.1 million for the twelve months ended December 31, 2016, primarily due to improved market conditions and improved operational utilization.
  • Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2017 were $15.7 million and $59.4 million respectively, compared to $15.4 million and $58.8 million for the twelve months ended December 31, 2016. The $0.3 million increase in voyage expenses was mainly due to the higher bunker prices prevailing in 2017 compared to the same period of 2016. The $0.6 million increase in vessels’ operating expenses was mainly due to increased maintenance costs for some vessels in the fleet.
  • Drydocking Costs for the twelve months ended December 31, 2017 and 2016 were $3.5 million and $3.6 million, respectively, representing the costs of 7 and 10 vessels drydocked in the corresponding periods. In 2017 the Company faced increased drydocking costs due to the trading areas of some of the vessels due for drydock.
  • Depreciation for the twelve months ended December 31, 2017, was $38.9 million, a $0.2 million decrease from $39.1 million for the same period of last year.
  • Included in the 2017 results, were net losses from interest rate derivative instruments of $0.4 million compared to net losses of $0.8 million in the same period of last year. Interest paid on interest rate swap arrangements amounted to $0.4 million compared to $ 1.1 million in the same period of last year. In 2017, the gains in change in fair value of the interest rate derivative instruments was nil compared to gains of $0.3 million in the same period of last year.
  • The Company recorded an impairment loss of $6.5 million in 2017 for seven of its oldest vessels, four of which were sold in 2017.
  • As a result of the above, the Company reported a net loss of $1.2 million for the twelve months ended December 31, 2017, compared to a net loss of $7.8 million for the twelve months ended December 31, 2016. The weighted average number of shares outstanding for the twelve months ended December 31, 2017 and 2016 was 39.8 million. Loss per share for the twelve months ended December 31, 2017 amounted to $0.03, compared to loss per share of $0.20 for the same period of last year.
  • Adjusted net income was $5.4 million, or $0.14 per share, for the twelve months ended December 31, 2017 compared to adjusted net loss of $2.2 million, or $0.05 per share, for the same period of last year.
  • EBITDA for the twelve months ended December 31, 2017 amounted to $54.5 million. Reconciliations of Adjusted Net (Loss)/Income, EBITDA and Adjusted EBITDA to Net Loss are set forth below. An average of 52.6 vessels were owned by the Company during the twelve months ended December 31, 2017, compared to 53.4 vessels for the same period of 2016.
  • As of December 31, 2017, cash and cash equivalents amounted to $51.8 million and total debt amounted to $384.9 million. During the twelve months ended December 31, 2017 debt repayments amounted to $56.3 million.

Fleet Update Since Previous Announcement
The Company announced the following chartering arrangements:

  • A two year time charter for its 2018 built LPG carrier, the Eco Arctic, with a major trading house until February 2020.
  • A two year time charter for its 2018 built LPG carrier, the Eco Ice, with a major trading house until February 2020.
  • A three months’ time charter for its 2017 built LPG carrier, the Eco Frost, to an oil major until May 2018.
  • A two months’ time charter for its 2008 built LPG carrier, the Gas Imperiale, to an international trading house until April 2018.
  • A three months’ consecutive voyage charter for its 1995 built LPG carrier, the Gas Marathon, to an international petrochemical company until June 2018.
  • A six months’ consecutive voyage charter extension for its 2001 built chartered-in LPG carrier, the Gas Cathar, to an international petrochemical company until December 2018.
  • A three months’ consecutive voyage charter extension for its 2001 built chartered-in LPG carrier, the Gas Premiership, to an international petrochemical company until October 2018.
  • A six months’ consecutive voyage charter extension for its 2015 built LPG carrier, the Eco Galaxy, to an international petrochemical company until December 2018.

With these charters, the Company has contracted revenues of approximately $196 million. Total anticipated voyage days of our fleet are 65% covered for the remainder of 2018.

Board Chairman Michael Jolliffe Commented

The fourth quarter of 2017 was mixed. On the one hand we are pleased that our core market of small LPGs shows clear signs of improvement, which should continue to leverage our earnings. In this market we achieved an outstanding fleet operational utilization of 97.2%. On the other hand the sale of four of our older vessels and the weakening of the tanker market affected our revenue growth, somewhat obscuring the improved revenues for our core fleet. Nevertheless, excluding impairment charges, our annual results demonstrated clear improvements both in revenues and profitability. In addition with the delivery of our two 22K semi ref newbuildings in January 2018, our asset base increased to $ 1.1 billion.

We have numerous charters which commenced at the beginning of 2018, and several vessels yet to fix, all of these in a better market environment, reflecting the benefits of our chartering policy.

In terms of strategy, we intend, in the upcoming year, to take advantage of the positive market momentum of the small LPG market. We will focus our efforts on capitalizing our dynamic fleet of the past couple of years by placing strong emphasis on taking advantage of the unique and improving supply and demand fundamentals of our core segment. With assets currently $1.1 billion, low gearing and capex of around $31.2 million of which equity is only $1 million – we are looking forward to an exciting 2018.

Conference Call details:

On February 22, 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:
866-548-4713 (US Toll Free Dial In) or 0800 279 7204 (UK Toll Free Dial In).
Access Code: 5628899.

In case of any problems with the above numbers, please dial+1 323-794-2093 (US Toll Dial In), +44 (0)330 336 9105 (Standard International Dial In).
Access Code: 5628899

A telephonic replay of the conference call will be available until March 1, 2018 by dialing +1 719-457-0820 (US Local Dial In), +44 (0) 207 660 0134 (UK Local Dial In).
Access Code: 5628899

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 54 vessels. The fleet comprises of 50 LPG carriers, including two chartered in LPG vessels, with a total capacity of 302,492 cubic meters (cbm) and three M.R. product tankers and one Aframax oil tanker with a total capacity of 255,804 deadweight tons (dwt). The Company has agreed to acquire a further 1 LPG carrier with expected delivery in April 2018. Giving effect to the delivery of these acquisitions, StealthGas Inc.’s fleet will be composed of 51 operating LPG carriers with a total capacity of 324,492 cubic meters (cbm). 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 fourth quarters and twelve month periods ended December 31, 2016 and December 31, 2017.

FLEET DATAQ4 2016 Q4 2017 12M 2016 12M 2017
Average number of vessels (1)53.7 50.9 53.4 52.6
Period end number of owned vessels in fleet53 50 53 50
Total calendar days for fleet (2)5,123 4,870 20,275 19,917
Total voyage days for fleet (3)5,078 4,822 19,999 19,717
Fleet utilization (4)99.1%99.0%98.6%99.0%
Total charter days for fleet (5)4,307 4,231 15,831 16,772
Total spot market days for fleet (6)771 591 4,168 2,945
Fleet operational utilization (7)94.2%97.2%91.1%96.2%

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 Income/(Loss), EBITDA, adjusted EBITDA and adjusted EPS:

Adjusted net income/(loss) represents net (loss)/income before loss on derivatives excluding net swap interest paid, share based compensation, impairment loss and (loss)/gain on sale of vessels. EBITDA represents net (loss)/income before interest and finance costs including net swap interest paid, interest income and other income/(expenses) and depreciation. Adjusted EBITDA represents EBITDA before share based compensation, loss on derivatives, excluding net swap interest paid, impairment loss and (loss)/gain on sale of vessels. EBITDA, adjusted EBITDA, adjusted net income/(loss) and adjusted EPS are not recognized measurements under U.S. GAAP. Our calculation of EBITDA, adjusted EBITDA, adjusted net income/(loss) and adjusted EPS may not be comparable to that reported by other companies in the shipping or other industries. In evaluating Adjusted EBITDA and Adjusted net income/(loss), 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/(loss) 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. We also believe that EBITDA represents useful information for investors regarding a company's ability to service and/or incur indebtedness.

(Expressed in United States Dollars,
except number of shares)
Fourth Quarter Ended
December 31st,
Twelve Months Period
Ended December 31st,
2016 2017 2016 2017
Net (Loss)/Income - Adjusted Net Income/(Loss)
Net (loss)/income(4,382,706)748,305 (7,798,300)(1,218,237)
Loss on derivatives156,149 98,332 767,196 403,943
Less swap interest paid(164,042)(101,922)(1,098,585)(431,315)
Loss/(gain) on sale of vessels, net175,364 4,521 (118,427)77,314
Impairment loss5,735,086 -- 5,735,086 6,461,273
Share based compensation67,202 20,344 340,377 129,245
Adjusted Net income/(loss)1,587,053 769,580 (2,172,653)5,422,223
Net (Loss)/Income – EBITDA
Net (loss)/income(4,382,706)748,305 (7,798,300)(1,218,237)
Plus interest and finance costs incl. swap interest paid3,895,049 4,588,248 15,366,733 17,092,779
Less interest income and other expenses(76,770)(88,189)(454,472)(322,868)
Plus depreciation9,881,333 9,661,797 39,096,589 38,921,672
EBITDA9,316,906 14,910,161 46,210,550 54,473,346
Net (Loss)/Income - Adjusted EBITDA
Net (loss)/income(4,382,706)748,305 (7,798,300)(1,218,237)
Loss on derivatives156,149 98,332 767,196 403,943
Loss/(gain) on sale of vessels, net175,364 4,521 (118,427)77,314
Impairment loss5,735,086 -- 5,735,086 6,461,273
Share based compensation67,202 20,344 340,377 129,245
Plus interest and finance costs3,731,007 4,486,326 14,268,148 16,661,464
Less interest income and other expenses(76,770)(88,189)(454,472)(322,868)
Plus depreciation9,881,333 9,661,797 39,096,589 38,921,672
Adjusted EBITDA15,286,665 14,931,436 51,836,197 61,113,806
EPS - Adjusted EPS
Net (loss)/income(4,382,706)748,305 (7,798,300)(1,218,237)
Adjusted net income/(loss)1,587,053 769,580 (2,172,653)5,422,223
Weighted average number of shares 39,770,911 39,828,589 39,824,038 39,809,364
EPS - Basic and Diluted(0.11)0.02 (0.20)(0.03)
Adjusted EPS0.04 0.02 (0.05)0.14


StealthGas Inc
Unaudited Consolidated Statements of Operations
(Expressed in United States Dollars, except number of shares)
Fourth Quarter Ended
December 31st,
Twelve Months Period
Ended December 31st,
2016 2017 2016 2017
Revenues
Revenues36,453,737 38,428,090 136,539,399 152,338,278
Revenues - related party1,019,509 -- 7,592,784 1,973,643
Total revenues37,473,246 38,428,090 144,132,183 154,311,921
Expenses
Voyage expenses3,249,859 3,444,751 13,618,025 13,804,032
Voyage expenses - related party457,125 474,805 1,772,240 1,912,505
Charter hire expenses967,942 886,988 4,054,387 3,524,770
Vessels' operating expenses14,115,701 15,003,464 55,680,993 58,618,526
Vessels' operating expenses - related party387,924 17,216 3,141,843 800,908
Drydocking costs445,001 989,258 3,613,230 3,529,047
Management fees - related party1,851,150 1,737,080 7,346,180 7,205,490
General and administrative expenses814,793 666,348 3,110,409 2,898,958
Depreciation9,881,333 9,661,797 39,096,589 38,921,672
Impairment loss5,735,086 -- 5,735,086 6,461,273
Net loss/(gain) on sale of vessels175,364 4,521 (118,427) 77,314
Other operating costs -- 275,000 -- 1,058,863
Total expenses38,081,278 33,161,228 137,050,555 138,813,358
(Loss)/Income from operations(608,032) 5,266,862 7,081,628 15,498,563
Other (expenses)/income
Interest and finance costs(3,731,007) (4,486,326) (14,268,148) (16,661,464)
Loss on derivatives(156,149) (98,332) (767,196) (403,943)
Interest income76,770 88,189 454,472 322,868
Foreign exchange gain/(loss)35,712 (22,088) (299,056) 25,739
Other expenses, net(3,774,674) (4,518,557) (14,879,928) (16,716,800)
Net (loss)/income(4,382,706) 748,305 (7,798,300) (1,218,237)
(Loss) / Earnings per share
- Basic and diluted(0.11) 0.02 (0.20) (0.03)
Weighted average number of shares
-Basic and diluted39,770,911 39,828,589 39,824,038 39,809,364


StealthGas Inc.
Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars)
December 31,
2016 2017
Assets
Current assets
Cash and cash equivalents 64,993,923 51,754,131
Receivables from related party 115,599 --
Trade and other receivables 3,918,031 3,853,992
Claims receivable -- 15,951
Inventories 2,809,123 2,762,299
Advances and prepayments 1,278,357 1,221,029
Restricted cash 3,363,012 3,231,323
Total current assets 76,478,045 62,838,725
Non-current assets
Advances for vessels under construction and acquisitions55,785,801 61,577,818
Vessels, net 863,699,739 862,061,906
Other receivables -- 243,075
Restricted cash 5,174,710 7,917,738
Deferred finance charges540,414 941,760
Fair value of derivatives 263,635 645,169
Total non-current assets 925,464,299 933,387,466
Total assets 1,001,942,344 996,226,191
Liabilities and Stockholders' Equity
Current liabilities
Payable to related party 7,890,933 14,209,624
Trade accounts payable 8,728,267 10,509,465
Accrued and other liabilities 5,299,479 5,880,479
Customer deposits -- 1,820,700
Deferred income 4,621,438 4,362,056
Deferred income - related party 232,774 --
Current portion of long-term debt 54,593,715 41,966,607
Total current liabilities 81,366,606 78,748,931
Non-current liabilities
Fair value of derivatives 364,823 126,525
Customer deposits 2,556,700 736,000
Deferred gain on sale and leaseback of vessels385,127 190,087
Deferred income1,910 4,035
Long-term debt 343,291,874 342,941,841
Total non-current liabilities 346,600,434 343,998,488
Total liabilities 427,967,040 422,747,419
Commitments and contingencies
Stockholders' equity
Capital stock442,850 442,850
Treasury stock (22,523,528) (22,523,528)
Additional paid-in capital 501,342,523 501,471,768
Retained earnings 94,688,024 93,469,787
Accumulated other comprehensive income25,435 617,895
Total stockholders' equity 573,975,304 573,478,772
Total liabilities and stockholders' equity1,001,942,344 996,226,191


StealthGas Inc.
Unaudited Consolidated Statements of Cash Flows
(Expressed in United States Dollars)
December 31st,
2016 2017
Cash flows from operating activities
Net loss for the year (7,798,300) (1,218,237)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 39,096,589 38,921,672
Amortization of deferred finance charges 715,587 690,842
Amortization of deferred gain on sale and leaseback of vessels (195,574) (195,040)
Share based compensation 340,377 129,245
Change in fair value of derivatives (331,387) (27,372)
Impairment loss 5,735,086 6,461,273
(Gain)/loss on sale of vessels (118,427) 77,314
Changes in operating assets and liabilities:
(Increase)/decrease in
Trade and other receivables 825,838 (179,036)
Claims receivable (610,810) (235,705)
Inventories 117,744 46,824
Advances and prepayments (28,955) 57,328
Increase/(decrease) in
Balances with related parties (1,185,024) 6,434,290
Trade accounts payable 462,215 1,299,686
Accrued liabilities (303,460) 581,000
Deferred income (567,411) (490,031)
Net cash provided by operating activities 36,154,088 52,354,053
Cash flows from investing activities
Insurance proceeds 610,810 219,754
Vessels’ acquisitions and advances for vessels under construction (56,215,758) (60,612,867)
Proceeds from sale of vessels, net 1,530,177 11,479,936
Net cash used in investing activities (54,074,771) (48,913,177)
Cash flows from financing activities
Stock repurchase (2,070,306) --
Deferred finance charges paid (712,614) (815,256)
Loan repayments (55,630,352) (56,254,073)
Proceeds from long-term debt 31,200,000 43,000,000
Net cash used in financing activities (27,213,272) (14,069,329)
Net decrease in cash, cash equivalents and restricted cash (45,133,955) (10,628,453)
Cash, cash equivalents and restricted cash at beginning of year 118,665,600 73,531,645
Cash, cash equivalents and restricted cash at end of year 73,531,645 62,903,192
Cash breakdown
Cash and cash equivalents64,993,923 51,754,131
Restricted cash, current3,363,012 3,231,323
Restricted cash, non-current5,174,710 7,917,738
Total cash, cash equivalents and restricted cash
shown in the statements of cash flows
73,531,645 62,903,192

Source:STEALTHGAS INC.