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StealthGas Inc. (NASDAQ:GASS)

Q1 2010 Earnings Call Transcript

May 12, 2010 11:00 am ET

Executives

Andrew Simmons – CFO

Harry Vafias – President and CEO

Analysts

Natasha Boyden – Cantor Fitzgerald

Daniel Burke – Clarkson Johnson Rice

David Wiser [ph] – Mentor Partners [ph]

Operator

Good afternoon ladies and gentlemen, and welcome to the StealthGas Inc. first quarter 2010 results conference call. For your information, today's conference is been recorded. At this time, I would like to turn the conference over to Mr. Harry Vafias, President and Chief Executive Officer. Please go ahead, sir.

Harry Vafias

Thank you and good morning, everyone. Welcome to our conference call and web cast to discuss the results for the first quarter ended March 31st. I'm Harry Vafias, CEO of StealthGas, and I'd like to remind you please that we'll be discussing forward-looking statements in today's conference call and presentation. Regarding the Safe Harbor language, I would like to refer you to slide number one of this presentation as well as to our press release on our first quarter 2010 results. With me today is Andrew Simmons, our CFO. And if you need further info on the conference call or the presentation, please contact Andrew or myself.

Let us begin from slide number two, we would like to reiterate our stated business strategy, and later I would like to discuss the outlook for 2010 and beyond. Our primary objective is to continue to run a highly efficient and modern fleet on secure employment contracts with first-class charters that serve a very specific niche market. Our core LPG fleet has no correlation whatsoever to most of our shipping sectors, so it remains a surprise to us that our stock seems to continue to trade in tandem with the share movements of companies with vessels trading sectors completely unrelated to our core LPG market.

During the first quarter of 2010, we completed the sale of two of the five older LPG carriers in our fleet that we have contracted to sell by May of this year. I'm pleased to say that the majority of these vessels have been (inaudible) at prices very close to the vessel’s book values. These sales have not only boosted our liquidity and reduced our level of debt, but they have also in my view made our fleet more efficient in that several of these vessels will have operated for this year at least in what continues to be a relatively soft spot market.

Therefore removing them from the fleet will overtime, I believe improve the overall performance of the company and keep the average age of our fleet significantly below those of our competitors. We have no further scheduled deliveries of ships until the first quarter of ’11, and as we have previously highlighted, about $11 million of states' payments due during 2010, we expect to meet comfortably from our internally generated cash flows.

After taking into consideration the total fleet of 40 ships at the end of the first quarter 2010, our net debt to capitalization ratio stood at 43%, down from 46% in the prior quarter, which coupled with our employment charter profile and overall quality of our charters, should have to continue to underpin the underlying financial stability and strength of the company.

Our third objective has been to secure and maintain a visible revenue stream, with stable and predictable cash flows enabling us to continue to pursue a prudent growth strategy in the LPG segment or in other sectors. At the moment fixed employments for our fleet for 2010 stands at 60% of available days. We have about 24% already covered for next year. As we’ve announced during the first quarter last week, we have secured some attractive field of business for our fleet recently, all while we would like really to have more vessels fixed at attractive rates.

Also, as we are focusing on the (inaudible) we tightened in the latter part of this year, we would prefer to keep some of our vessels in the spot market, so we can take advantage of the improved period rates, which we might realize.

As you would have seen from our results for Q1, our time charter equivalent was $7,065 per vessel per day, compared to $7,344 a day in the corresponding quarter last year, which represents a decline of only 3.9%, but an improvement over Q4 ’09 when the daily TCE was $6, 727 per day per vessel. While this improvement was both welcome and encouraging, we continue to face challenges in the near term from the trading standpoint as we have a high number of vessels trading in the spot market that was the case, particularly between 2005 and 2008. We also have again included an adjusted time charter equivalent on a blended basis in our slide presentation for both the gas carriers and the product tankers, as none of our vessels were on bareboat charter.

This not only gives you more realistic figure in terms of the average time charter equivalent achieved in their fleet, but we have also adjusted the vessel operating expenses line later in the presentation as we (inaudible) to be responsible for the operating expenses of all the vessels in our fleet.

On this basis, the time charter equivalent was close to $8,000 in Q1 2010, against $8,821 at the same time last year, a reduction of $852 a day or 9.4%, again however there was an improvement over Q4 of ’09, where the equivalent rate stood at $7,712 per vessel per day, an increase of $277 per vessel per day or 3.6%.

Despite those lower income levels on a year-over-year basis, I’m very pleased to report that we continue to remain comfortably above our net income breakeven level and the company returned to profitability after the losses incurred in the last quarter of ’09, which were basically not sustained for our trading activities. We currently have seven of our LPG vessels and now have three tankers on bareboat charters, which are the most secure in terms of operational risk, plus we are protected from such expenses as bunkers and lubricants, crew and insurance costs, all these are for the bareboat charter's account.

Our fourth goal has been to own and operate a modern fleet of gas carriers. In this respect, our average age as of today is 11.7years, not including the tankers and the five brand new gas vessels, compared to the industry average of about 22 years.

We continue to believe that within our cost structure, this gives us a competitive advantage and that this factor will be important as we move forward into the latter part of 2010 and beyond. And I shall discuss later, there is an expected contraction in the overall size of the Handy Size fleet unlike any other active shipping sector, plus the prospects for a sustained economic recovery may well be firmer.

Our fifth objective has been to maintain close customer relations. The quality of our customer relationship is exemplified by continuing the consistently high fleet utilization and the quality of our charters, which also lowers our counterparty risk. I'm pleased to say that today we continue not to have any issue in terms of charter's performance.

Our sixth goal has been to maintain cost-efficient operations. I’m pleased to report yet another good performance in Q1 of 2010. Our net income breakeven level excluding losses on derivatives increased by just $151 per day to $5,523 per vessel per day, compared to $5,373 a day in the prior quarter. Also in a year-over-year basis, excluding losses on derivatives, our daily net income breakeven was virtually unchanged at $5,559 in Q1 ’09 compared to $5,523 in Q1 of this year.

We continue to (inaudible) heavily on managing our cost base, and this has gone some way to preserving the ability of the company at the time when we have seen not surprisingly income levels on our ships coming under pressure. This close and cost effective management of our vessel continues to be a vital important area of operation for our company, given the relatively narrow margins, which these vessels produce. And I believe we have demonstrated this throughout ’09, and we will continue to maintain this vigilance in 2010.

Finally, in regard to business strategy and following a full review of the company’s financial situation and the continued under-valuation, in our opinion, of the company, we decided at our Board meeting in March to instigate a buyback of the company’s stock at a maximum consideration of $50 million. I can report that as of close of business last night, the 11 of May, we have already purchased a total of about 6,000 shares.

Slide number three, this slide demonstrates the development of our fleet. By the end of the first quarter of ‘10, we had a fleet of 57 gas ships and 3 tankers. Thus, continuing our number one position in the Handy Size gas sector. Today we own 34 gas carriers and by the end of 2010, based on this structure we will own the existing ships plus the three tankers. I want to confirm again that apart from some $11 million of states payments during 2010 to our Japanese yard constructing the five LPG buildings, we have no capital commitments or need to raise new finance until the first quarter of ‘11 when they commence those deliveries.

We are continuing our discussion with several banks, who have expressed very serious interest in the potential financing of these vessels. And we intend to continue those discussions, refer to their financing during the second quarter of ‘10.

StealthGas continues to hold the number one ranking in the owned vessels in the 3,000 to 8,000 gas sector, upon which we are concentrating. We continue to focus primarily on this segment because of its strong fundamentals, coupled with a relatively stable rate as we will show later. But we continue to obtain, even in this very difficult period of time, and a favorable order book in fleet growth compared to the average size segments in the gas sector and many other sectors of shipping.

Slide number four, this shows the employment profile of the fleet, and shows you the earnings visibility for each of the 37 vessels. At the bottom of the employment profile chart, we have included the percentage of earnings [ph] days fixed. This then adds a certain stability and predictability of our earnings. As you can see, 60% of (inaudible) days are already fixed for this year and 24% for ’11.

We are now turning to the financial highlights. So, I'll pass you on to our CFO, Andrew Simmons.

Andrew Simmons

Thank you, Harry, and good morning, everybody. With slide number five, we now turn to the financial highlights for the first quarter of 2010. With an average of 41 vessels owned and operated in the first quarter of 2010, we realized a net income of $1.6 million on voyage revenue of $28.8 million, and we produced an EBITDAR of $9.9 million.

For the first quarter of 2010, we reported a loss of $3.2 million on interest rates swaps and currency hedging arrangements, which included an unrealized non-cash loss of approximately $1.5 million and a realized cash loss of approximately $1.7 million, plus a non-cash impairment loss of $80,000 via the sale of the Gas Eternity and a $50,000 non-cash provision for restricted stock portion of deferred stock-based compensation.

Excluding these non-cash items, our net income was $3.2 million or $0.15 per share calculated on 22.3 million average shares outstanding, as our share buyback program had not commenced during the course of the first quarter of this year.

Our net debt to capitalization stood at 43% at the end of Q1 2010. We continue to believe that maintaining our leverage at moderate levels is important. As currently structured, no further debt will be incurred by the company until early 2011, and as outlined in our recent press release, we are currently reducing our overall level of indebtedness through the sale of some of our smaller and older LPG vessels.

We now turn please to slide number six. This slide provides you with an overview of the development of our income statement for five consecutive quarters. In comparing our results from the first quarter of 2009 to the first quarter of 2010, revenues decreased by 1.4%, EBITDA increased by 15.1%, and our EPS, excluding non-cash items and the $80,000 impairment loss was $15 per share.

Now turn to slide number seven please. These are our operating highlights for four prior quarters, Q1 of 2010, plus our full year figures for 2008 and 2009. In terms of fleet base in the fourth quarter of 2010, we owned and operated an average of 41 vessels. Total charter days for the fleet during the first quarter were 2,760 days. We also had 855 total spot market days. This compares to 501 spot days in the same quarter of last year.

In terms of average daily results per vessel for the first quarter of 2010, we achieved a time charter equivalent of $7,989 per day per vessel on the adjusted basis, compared to $7,324 per day per vessel in Q4 of ’09. Vessel operating expenses per day on the adjusted basis, i.e. no vessels on bareboat charter were $3,513 per day, compared to $3,473 in Q4 of ’09. And we continue as has been discussed earlier, to be relativity pleased with this performance on the day-to-day running expenses. The measures we instigated at the beginning of 2009, and we will continue in 2010 to have even more stringent management on costs due to continuation of the overall prevailing economic conditions that helped to defray to an extent the effects of a softer sport market and some commercial downtime.

We now turn to slide number eight. We turn to the financial highlight for the first three months of 2010. With an average of 41 vessels owned and operated in this period, we realized net income of $3.2 million or $0.15 per share net of the $80,000 impairment loss on the sale of the Gas Eternity, a $1 million non-cash loss due to derivatives -- the $1.5 million non-cash loss due to derivatives, and $50,000 from stock based compensation costs.

We now turn to slide number nine. As we have already discussed, we continue to run our fleet in a very cost effective manner, concentrating extremely hard on operating our ships efficiently and safely. We were so pleased that our vessel operating expenses, if we exclude the non-cash loss on derivates in Q1 of 2010 were just 2% higher than the same quarter of 2009. And while the availability of a well-qualified crew still remains a challenge, we are hopeful that the rate of increase in operating costs will continue to moderate in 2010.

So on a cash flow basis, our daily breakeven per vessel for the first quarter of 2010 was $5,739 per day. If we deduct the realized loss on derivatives, compared to $6,017 per day in Q4 of ’09. What is encouraging from a cost standpoint is if you turn back to slide number seven, is that our total vessel operating expenses per day for Q1 2010 were lower than the corresponding quarter last year, and for all of 2009.

On a net income basis, our daily breakeven per vessel net of realized cost on derivatives was $5,523 per day in Q1 of 2010, compared to $5,373 per day for the fourth quarter of 2009, an increase of $150 per day per vessel or just 2.8%, due primarily to an increase in depreciation expenses, which again underlies the intention of the management attaching to this area in terms of controllable expense.

Now slide number 10 please. Using the input given on this slide, our shareholders can estimate our financial performance for 2010. This slide provides you with the revenues we already have secured as of today until the end of 2010 based on contracted revenues on the timing of bareboat charters.

Total contracted revenues to-date is $79.1 million, which is 70.2% of total 2009 revenues, plus we have the variable in-revenues we generated by those of our vessels with days and are not yet contracted for in the remainder of 2010. And we have provided you with that number of days $4,040 as the fleet stood as of the 1st of April, 2010. So you can input the rate you wish to assume our average vessel not yet chartered or loaned for the reminder of 2010, and you can calculate our projected performance for this year.

Thank you very much for your kind attention. I will now hand you back to Harry for some further comments. Thank you.

Harry Vafias

Slide 11 please. This slide shows you the volatile spread markets over the past six years for the medium-sized and large-sized gas ships. In comparison with mid-sized and smaller semi-refrigerated and fully pressurized vessel, our core sector, have experienced a much lower volatility, and until recently, steady growth in freight earnings from mid '05 onwards, and a mild recovery in one year charter rate in this sector is evident. It’s clear from this data that our type of ships, which form the core of our business and that are far removed from dry or wet container markets for over the past six years, not experienced a wild fluctuation in rates that these other shipping sectors have seen.

And we are hopeful that this relatively non-volatile trading pattern will continue to remain intact, as I believe we proved during a challenging 2009 and through our reported results for Q1 of ’10 that we are discussing today. That point is further emphasized by slide 12, which shows the one year time charter equivalent volatility since the year 2000 between the dry bulk and the crude tanker sectors, and the 3,500 fully pressurized, and 3,200 semi-ref vessels, which are typical of our fleet. As you can see, based on the mean average of these sectors over this quite extended period, the level of volatility is far higher in the dry and wet spaces running our core segment.

We continue to expect that the supply of products will increase during 2010 and beyond, plus demand is expected to continue to be steady, particularly in the Far East, and developing world. Therefore, we continue to believe that the outlook for our core market is encouraging. And therefore, we will continue with the contracted acquisition during ’11 and ’12 of five brand new gas carriers, while in the meantime as we have already commenced looking to reducing the number of some of the smaller and older vessels in the fleet.

This trimming will not only keep our fleet in terms of age at the forefront of the market, but the proceeds from these sales have already enhanced our already strong liquidity position and further reduce our debt level, which was already quite conservative. In addition, some of our increased liquidity has already been utilized to repurchase some of the company’s common stock and will also be utilized to selectively expand the company if attractive opportunities are found in any shipping segment.

Slide 15, this slide shows the fair trade evolution for 12 months time charters for our markets. The figures are based on independent estimates by Lorentzen & Stemoco. As you can see highlighted in yellow, this segment continues to be as we have just discussed, characterized by relative stability, and rates have been reasonably steady over the past two quarters and the independent forecast for the second quarter of ’10 is that rates will be similar to what is currently being obtained. These projected rates, which slowed down on what we were achieving early in the company’s history, while unwelcome did not in any way push the company towards a loss-making situation from a trading standpoint as we proved throughout ’09 and in the first quarter of this year.

Slide 14, we continue to believe that the forecast minimal fleet growth of the Handy gas sector in the year 2010 and the negative fleet growth in ’11 at the time when several natural gas projects are due to come on stream give us a defining positive outlook for our core sector. There is an expectation that the supply of gas products that must be shipped at this time will increase. We continue to believe that this supply-demand access is very encouraging for our company, and it's virtually a unique situation within the shipping industry, particularly given the order book conditions being faced by many of the other sectors of shipping today.

Slide 15, we have included this slide to reemphasize the point I have just made referring to the different order book outlook for the LPG sector as opposed to the more main stream sectors of shipping. I should add that the figures shown here in the graph are for all gas sizes and as we have just surpassed in our core Handy Size sector, it feels the book is much, much smaller.

Last, as we just discussed, the overall size of our specific fleet sector is projected to decline during this year and the next, which given our market leading position should be a positive factor for the company.

Slide 16, we have included this slide now for the past first quarter results, taking a sample of different types of listed shipping companies and making a comparison of their price to NAV compared to ours. We have also included a comparison of price to earning ratios to further underline our point. As you can see from the slide, based upon data made available to us recently, we seem to continue to present a very attractive prospect to investors when benchmarked against these companies, who do not benefit from the sector’s fundamentals that we have been discussing.

In my view, on this basis at least, as was highlighted earlier, our comparatively low debt to market value level we continue to be valued inappropriately by the market. And so thus, in my view, continues to be an attractive company to invest in based upon those variations and the outline we have discussed here today.

To summarize, and the end of last year we took measures, some of which in the short term, were painful. However, I firmly believe that these measures are enhancing the already sound financial standing of the company. And we'll be in a good position to take advantage of improvements in our market and also opportunities if they present themselves going forward.

I would like to stress again that we have not needed to issue diluted equity during this challenging period, we have all experienced over the last two years or so, and that the company remains operationally profitable and able to comfortably meet its ongoing obligations.

Finally, as announced in March we have commenced our shared buyback program, which to date totals about 6,000 shares. We believe that the sale of several ships have brought us close to the book value, and investing some of these proceeds in our stock, which trades at about 60% discount to NAV. We will also prove over time to have been a sound deployment of our capital.

We have now reached the end of our presentation. We would like to open the floor for your questions. So operator, please open the floor. Thank you.

Question-and-Answer Session

Operator

(Operator instructions) Our first question comes from Natasha Boyden of Cantor Fitzgerald. Please go ahead.

Natasha Boyden - Cantor Fitzgerald

Hi, good morning everyone.

Harry Vafias

Hello Natasha.

Natasha Boyden - Cantor Fitzgerald

Hi, Harry you mentioned in your -- in the press release the asset values have held up better on the gas carrier market than the other shipping sectors, can you provide may be any details about how asset base has performed within the LPG sector, maybe a percentage versus maybe some of the other sectors. And then secondly, what kind of S&P activity are you seeing in the LPG carrier market at all. I mean, I know you have managed to sell a couple of your older ones. I really just want to get a feel of what is going on there?

Harry Vafias

Firstly on the asset prices, I don’t need to comment on the wet and dry container values, because you know better than me they have dropped significantly during ’09. Some of the segments have seen a recovery, not as it was before but a recovery of 10% or 20%. The drops were huge in some cases close to 60%, especially on the container sector as you know well.

In our segment, you’ve seen what we sold [ph]. You might remember, or might read our old announcements of what we had paid for these vessels. So you will see for modern vessels more than I mean five years or younger, you’ll see that the drop is no more than 5%. So basically I would say no drop at all actually. So that is fantastic having in mind that in ’07-’08 these vessels were making 11,000 to 12,000 a day, and now they are making 8000 and their values are still the same.

For all the vessels, of course there is a bigger drop. That I would say 10% to 15% subject of course to the age and size of the ship. Again we sold a lot of these kinds of ships. So again you can compare to what we paid for them. S&P activity, it’s a very small segment as you know, don’t allow no more than 300 vessels. So not too many vessels are being sold, but we have sold close to 10 vessels in the last two years. That has been another, I don’t remember off my head, but probably another 10 from different owners. So I would stick to my opinion that for older vessels, meaning older than 8 to 10 years, during this bad times the drop in values has been 10% to 15%.

Natasha Boyden - Cantor Fitzgerald

Okay, great. And actually that leads me to asking the next question, so you have obviously been selling a lot of your -- or some of your smaller older vessels, when you look at your fleet in total, are there other ships that you consider selling or do you think for the moment that you sold all the vessels that you would like to for the time being?

Harry Vafias

I would like to sell a minimum of another 4 “older vessels”.

Natasha Boyden - Cantor Fitzgerald

Okay, right. That’s helpful and then just moving to really the other side of the (inaudible), are they completely on track to be delivered on time, any possibility of early or delayed deliveries at all?

Harry Vafias

The Japanese are famous for their delivery on time. I cannot guarantee their performance obviously, but we are always trying to find excuses to lower the price. We are trying to do that as we speak. So we have not reached an agreement yet with the builders. If we do, of course we’ll announce it.

Natasha Boyden - Cantor Fitzgerald

And if you can just remind us, perhaps Harry or Andrew, what your remaining Capex plan is for this year and next year, and whether or not you have the financing in place.

Harry Vafias

The total amount for all these vessels is 120. We’ve already paid 20% of that. So you can do the math and see how much we have to pay, remaining to pay. Obviously, as you can understand this, if we don’t buy back more stock or we don’t buy anymore vessels, then obviously we don’t need to, we don’t need to even raise finance. We can take delivery of the billings [ph] with our own money actually.

Natasha Boyden - Cantor Fitzgerald

Okay, and then just lastly actually you touched on the stock repurchase program. Obviously, is this still at present your number one use of cash for you?

Harry Vafias

Of course, when you are trading at such a big discount and the vessel values, as we have discussed, has not dropped as much as we wanted. You have two choices, one is buy back stock, and then is to look for cheaper pro rata assets and this is what we’re doing.

Natasha Boyden - Cantor Fitzgerald

All right. Thank you very much gentlemen.

Harry Vafias

Thank you.

Operator

Thank you. Our next question comes from Daniel Burke of Clarkson Johnson Rice. Please go ahead.

Daniel Burke - Clarkson Johnson Rice

Good afternoon guys.

Harry Vafias

Hi Daniel.

Daniel Burke - Clarkson Johnson Rice

Hi Harry, kind of just pulling off of where we just left of there in the questioning. Can you kind of -- can you talk about the, you know, the other sectors where you see opportunities that might be attractive and sort of you know, in view of the fact that it sounds like you plan to continue some buyback activity for potentially could continue some buyback activity, you know, what’s the relative trade-off between buying back shares, and you believe they are pretty heavily discounted against NAV versus moving forward with acquiring additional assets.

Harry Vafias

We will do both if we have the financial strength to do it. So, I personally believe that tankers is the best medium term segment, having in mind its fundamentals and its outlook for ’11 and onwards. The other sectors are too dangerous at least for my belief. We will continue to buy back stock because indeed it is very cheap. Obviously, if the stock price goes up, we’ll have to reduce this buying back activity, but at these levels it is extremely cheap and we’ll continue to buy back stock.

Daniel Burke - Clarkson Johnson Rice

I do think it’s encouraging to see that buyback you know, being physically implemented. I wanted to refer back to a comment you made earlier. I thought you said you’d like to sell another four vessels that just seemed kind of specific. I assume you’re just looking at the -- the oldest couple on the list, and those are kind of the logical target that just seemed like a kind of specific figure to throw out for.

Harry Vafias

No, it’s not a specific figure. I can sell five or I can sell two. It’s only a matter of the price I get, but I said four because it’s you know, an average number of ships that I feel comfortable with selling and I’m sure that if we indeed sell these vessels that are older, smaller, and don’t have a lot of debt on them, it will be good for our cash flow or increase liquidity, which means that we continue to buy more shares on the $50 million mark, but we are also filling [ph], and probably buy ships, if we find attractive opportunities, especially in the tanker segment.

Daniel Burke - Clarkson Johnson Rice

Okay, and then I guess the last one from me. In terms of the banks and their role in financing the new bills, certainly moving forward to buy back is another indication of your confidence that your relationships with the banks are pretty healthy, but when would we expect to hear from you all that you’ve, you know, gone ahead and secured you know, some financing arrangements for those new bills?

Harry Vafias

We have, unless another Lehman Brothers happen, we have zero doubt that we will finance the vessels with the best possible terms, because the banks trust 100%, not only StealthGas, but the family growth, which is one of the healthiest shipping groups in the country.

Daniel Burke - Clarkson Johnson Rice

And any thoughts on when we…

Harry Vafias

It depends when the yard agrees to our pressure. I don’t know. I cannot answer that. I don’t know.

Daniel Burke - Clarkson Johnson Rice

And when you see that yard agrees to your pressure, are you accepting to do a little rework on the schedule or the pricing?

Harry Vafias

Yes. I discussed that on the previous question if you heard me. I’m trying to push them to get better pricing. I don’t know if I will succeed because the Japanese are very, very firm on these things, but we lose nothing in trying.

Daniel Burke - Clarkson Johnson Rice

Great. Thanks for the comments.

Harry Vafias

Thank you.

Operator

Thank you. We will move to David Wiser [ph] of Mentor Partners [ph]. Please go ahead.

David Wiser - Mentor Partners

All right. Thanks for taking my question. This is more of a nitpicky question, but during the quarter you sold, I guess, I was just trying to reconcile the cash flow statement. You sold, just reshipped the Natalie to profit (inaudible) and those all closed during the first quarter. Is that correct?

Harry Vafias

Yes.

David Wiser - Mentor Partners

And then after the quarter, I guess was what should have closed would be (inaudible)?

Harry Vafias

Yes.

David Wiser - Mentor Partners

Is there anything I’m missing there?

Harry Vafias

No.

David Wiser - Mentor Partners

Okay, so then my question is maybe you can show it to me, just based on your announcements for the sale of Texiana, I thought you said sale prices could be about $17.7 million.

Harry Vafias

Yes.

David Wiser - Mentor Partners

So on the cash flow statement you are showing $13.1 million net from the sale of vessels, is that because -- why was the big difference there? Is that because there was debt on the vessels or --

Harry Vafias

There is debt on some of the vessels, not all of them of course. Andrew is looking at the chart as we speak and shall return to you, I don’t know by heart those things.

David Wiser - Mentor Partners

Okay, all right. Thank you.

Andrew Simmons

Yes, we’ll come back to you on that.

David Wiser - Mentor Partners

Okay, thank you. Appreciate that.

Operator

(Operator instructions) We will now take a follow-up question from Daniel Burke of Clarkson Johnson Rice. Please go ahead.

Daniel Burke - Clarkson Johnson Rice

Andrew, I’m just trying to fill some space here to give you sometime if you can pick up that answer, maybe you didn’t want to say, but any case I had another one, but frankly kind of goes back to you as well, but Harry, I thought the quarter looked pretty healthy, you know, particularly given the amount of dry-dock activity you guys did have it going on. Did you also have available may be what that dry-dock schedule looks like on a per quarter basis, just an update for the remainder of this year?

Harry Vafias

Yes. How many ships is there?

Andrew Simmons

(inaudible) we have five more for this year.

Harry Vafias

Five more for the whole of the year?

Andrew Simmons

740,000 in Q2, 400,000 in Q3, and about 800,000 in Q4.

Daniel Burke - Clarkson Johnson Rice

I heard 800,000 in Q4 and 400,000 in Q3. I did not hear the Q2 figure.

Andrew Simmons

740,000 in Q2.

Daniel Burke - Clarkson Johnson Rice

Okay, great.

Harry Vafias

Basically from the summer onwards every quarter should be better than what we faced during ‘09 and this first quarter. That is my again personal opinion.

Daniel Burke - Clarkson Johnson Rice

And Harry, it is not early to look ahead, just qualitatively is next year is higher or lower than, is the ’11 higher or lower than the dry-dock budget for ’10?

Andrew Simmons

Higher.

Harry Vafias

Higher.

Daniel Burke - Clarkson Johnson Rice

Okay.

Harry Vafias

But we expect the market to be higher as well. So, let us see what happens.

Daniel Burke - Clarkson Johnson Rice

Okay, great. Alright, thanks guys.

Harry Vafias

Thank you.

Operator

(Operator instructions) It appears we have no further questions at this time. I would like to turn the call back over to you for any additional or closing remarks.

Harry Vafias

Okay. We’d like to thank everyone for joining us at our conference call today, and for your interest and trust in our company. We look forward to having you with us again at our next conference call for second quarter in six months 2010 results. Thank you.

Operator

Thank you ladies and gentlemen. That will conclude today’s conference call. Thank you for your participation. You may now disconnect.

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Source: StealthGas Inc. Q1 2010 Earnings Call Transcript
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