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SECURITIES AND EXCHANGE COMMISSION
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
331 Kifissias Avenue, Erithrea 14561, Athens, Greece
Telephone: (011) (30) (210) 625 0001
Facsimile: (011) (30) (210) 625 0018
(Name, Address, Telephone Number and Facsimile Number of Company Contact Person)
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $0.01 per share | The Nasdaq Stock Market LLC |
None
PURSUANT TO SECTION 15(d) OF THE ACT:
Large accelerated filero | Accelerated filerþ | Non-accelerated filero |
U.S. GAAPþ | International Financial Reporting Standardso | Othero |
o Item 17 | o Item 18 |
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• | future operating or financial results; | ||
• | global and regional economic and political conditions; | ||
• | pending or recent acquisitions, business strategy and expected capital spending or operating expenses; | ||
• | competition in the marine transportation industry; | ||
• | shipping market trends, including charter rates, factors affecting supply and demand and world fleet composition; | ||
• | ability to employ our vessels profitably; | ||
• | performance by the counterparties to our charter agreements; | ||
• | future liquefied petroleum gas (“LPG”) and refined petroleum product prices and production; | ||
• | future supply and demand for refined petroleum products and natural gas of which LPG is a byproduct; | ||
• | our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities, the terms of such financing and our ability to comply with covenants set forth in our existing and future financing arrangements; and | ||
• | expectations regarding vessel acquisitions. |
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Year ended December 31, | ||||||||||||||||||||
INCOME STATEMENT DATA | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||||||||
Revenues: | ||||||||||||||||||||
Voyage revenues | ||||||||||||||||||||
Operating expenses: | $ | 36,644,591 | $ | 73,259,369 | $ | 89,995,123 | $ | 112,551,901 | $ | 113,045,961 | ||||||||||
Voyage expenses | 2,688,155 | 6,213,804 | 5,369,546 | 6,180,754 | 10,522,573 | |||||||||||||||
Vessels operating expenses | 9,095,576 | 19,474,344 | 25,435,578 | 32,178,385 | 38,001,481 | |||||||||||||||
Dry-docking costs | 470,384 | 2,243,395 | 314,181 | 1,112,992 | 1,266,455 | |||||||||||||||
Management fees | 1,473,080 | 3,068,609 | 4,126,610 | 4,618,025 | 5,230,990 | |||||||||||||||
General and administrative expenses | 779,539 | 3,457,688 | 5,024,912 | 4,772,615 | 3,546,779 | |||||||||||||||
Depreciation | 5,611,942 | 13,058,316 | 16,546,692 | 23,283,393 | 26,766,672 | |||||||||||||||
Impairment Loss | 9,867,777 | |||||||||||||||||||
Forfeiture of vessel deposit and contract termination fees | 16,5000,00 | |||||||||||||||||||
Charter termination fees | (753,000 | ) | ||||||||||||||||||
Net gain (loss) on sale of vessels | — | — | — | (1,673,321 | ) | 791,659 | ||||||||||||||
Total expenses | 20,118,676 | 47,516,156 | 56,817,519 | 70,472,843 | 111,759,386 | |||||||||||||||
Income from operations | 16,525,915 | 25,743,213 | 33,177,604 | 42,079,058 | 1,286,575 | |||||||||||||||
Interest and finance costs | (2,685,207 | ) | (7,705,602 | ) | (9,831,404 | ) | (9,962,504 | ) | (9,109,222 | ) | ||||||||||
Change in fair value of derivatives | (67,000 | ) | (192,664 | ) | (2,573,992 | ) | (2,713,055 | ) | (5,478,163 | ) | ||||||||||
Interest income | 780,434 | 735,090 | 1,888,070 | 743,193 | 250,326 | |||||||||||||||
Foreign exchange loss | (18,091 | ) | (87,528 | ) | (122,171 | ) | (159,208 | ) | (261,401 | ) | ||||||||||
Other expenses, net | (1,989,864 | ) | (7,250,704 | ) | (10,639,497 | ) | (12,091,574 | ) | (14,598,460 | ) | ||||||||||
Net income/(Loss) | 14,536,051 | 18,492,509 | 22,538,107 | 29,987,484 | (13,311,885 | ) | ||||||||||||||
Earnings/(Loss) per share, basic (retroactively adjusted for 60,000-to-1 stock split effected on August 26, 2005)** | $ | 1.84 | $ | 1.31 | $ | 1.25 | $ | 1.35 | $ | (0.60 | ) | |||||||||
Earnings/(Loss) per share, diluted (retroactively adjusted for 60,000-to-1 stock split effected on August 26, 2005) (1)** | $ | 1.84 | $ | 1.31 | $ | 1.25 | $ | 1.34 | $ | (0.60 | ) | |||||||||
Weighted (and diluted) average number of shares outstanding (retroactively adjusted for 60,000-to-1 stock split effected on August 26, 2005) | 7,906,849 | 14,161,096 | 17,943,346 | 22,182,118 | 22,219,442 | |||||||||||||||
Dividends declared per share, basic and diluted (retroactively adjusted for 60,000-to-1 stock split effected on August 26, 2005)* | $ | 1.67 | $ | 0.75 | $ | 0.75 | $ | 0.75 | $ | 0.1875 |
As of December 31, | ||||||||||||||||||||
BALANCE SHEET DATA | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||||||||
Current assets, including cash | $ | 26,016,248 | $ | 17,891,738 | $ | 69,497,341 | $ | 52,458,518 | $ | 69,031,753 | ||||||||||
Total assets | 256,978,768 | 319,605,321 | 477,593,326 | 634,347,123 | 692,497,010 | |||||||||||||||
Current liabilities | 20,725,441 | 28,628,998 | 37,372,666 | 40,774,931 | 69,023,455 | |||||||||||||||
Derivative liability | 67,000 | 35,902 | 3,288,989 | 12,762,979 | 10,327,792 | |||||||||||||||
Total long-term debt, including current portion | 97,706,000 | 140,948,240 | 145,758,529 | 283,693,873 | 345,822,070 | |||||||||||||||
Total stockholders’ equity | 151,107,327 | 163,802,228 | 303,030,788 | 317,847,325 | 300,801,931 | |||||||||||||||
Capital stock (retroactively adjusted for 60,000- to-1 stock split effected on August 26, 2005) | 140,000 | 144,000 | 222,841 | 223,101 | 223,101 | |||||||||||||||
Common shares outstanding (retroactively adjusted for 60,000-to-1 split effected on August 26, 2005) | 14,000,000 | 14,400,000 | 22,284,105 | 22,310,110 | 22,310,110 |
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Year ended December 31, | ||||||||||||||||||||
OTHER FINANCIAL DATA | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||||||||
Net cash provided by operating activities | $ | 24,414,729 | $ | 33,224,984 | $ | 47,704,497 | $ | 48,080,792 | $ | 48,347,343 | ||||||||||
Net cash used in investing activities | (197,780,709 | ) | (84,282,368 | ) | (149,636,615 | ) | (159,979,986 | ) | (101,563,715 | ) | ||||||||||
Net cash provided by financing activities | 196,576,223 | 38,994,012 | 123,900,119 | 120,632,381 | 55,444,652 | |||||||||||||||
FLEET DATA | ||||||||||||||||||||
Average number of vessels(1) | 11.9 | 25.9 | 32.8 | 38.6 | 42.0 | |||||||||||||||
Total voyage days for fleet(2) | 4,288 | 9,346 | 11,871 | 14,018 | 15,240 | |||||||||||||||
Total time and bareboat charter days for fleet(3) | 4,105 | 8,209 | 11,170 | 13,318 | 12,276 | |||||||||||||||
Total spot market days for fleet(4) | 183 | 1,137 | 701 | 700 | 2,964 | |||||||||||||||
Total calendar days for fleet(5) | 4,334 | 9,451 | 11,986 | 14,113 | 15,335 | |||||||||||||||
Fleet utilization(6) | 98.9 | % | 98.9 | % | 99.0 | % | 99.3 | % | 99.4 | % | ||||||||||
AVERAGE DAILY RESULTS | ||||||||||||||||||||
Time charter equivalent(7) | $ | 7,919 | $ | 7,174 | $ | 7,129 | $ | 7,588 | $ | 6,727 | ||||||||||
Vessel operating expenses(8) | 2,099 | 2,061 | 2,122 | 2,280 | 2,478 | |||||||||||||||
General and administrative expenses | 180 | 366 | 419 | 338 | 232 | |||||||||||||||
Management fees | 340 | 325 | 344 | 327 | 341 | |||||||||||||||
Total operating expenses(9) | 2,279 | 2,426 | 2,541 | 2,618 | 2,711 |
* | As a privately held company, we paid no dividends in 2004 and an aggregate dividend of $10.0 million in July 2005. We paid no dividends in 2005 after becoming a public company in October 2005. We paid our first quarterly dividend since becoming a public company, of $0.1875 per share, in January 2006. In the first quarter of 2009, our board of directors decided to suspend the payment of further cash dividends as a result of market conditions in the international shipping industry. Our payment of dividends is subject to the discretion of our Board of Directors. Our loan agreements and the provisions of Marshall Islands law also restrict our ability to pay dividends. See “Item 3. Risk Factors — Risks Related To Our Common Stock — Our Board of Directors has determined to suspend the payment of cash dividends as a result of market conditions in the international shipping industry, and until such market conditions improve, it is unlikely we will reinstate the payment of dividends” and “Item 8. Financial Information — Dividend Policy.” | |
** | On January 1, 2009, the Company adopted new guidance which clarified that unvested share-based payment awards that contain rights to receive non forfeitable dividends or dividend equivalents (whether paid or unpaid) are participating securities, and thus, should be included in the two-class method of computing earnings per share (EPS). This standard was applied retroactively to all periods presented, for the years ended December 31, 2005, 2006, and reduced basic EPS by $0.01 for the years ended December 31,2007 and 2008 respectively. | |
(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) | Our total voyage days for our fleet reflect the total days the vessels were in our possession for the relevant periods, net of off-hire days associated with major repairs, drydockings or special or intermediate surveys. | |
(3) | Total time and bareboat charter days for fleet are the number of voyage days the vessels in our fleet operated on time or bareboat charters for the relevant period. | |
(4) | 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. | |
(5) | 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. | |
(6) | 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. | |
(7) | Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) or time charter equivalent revenues or “TCE revenues” 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 revenues, a non-GAAP measure, provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. It is also 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. Reconciliation of TCE revenues as reflected in the consolidated statement of income and calculation of TCE rate follow: |
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Year ended December 31, | ||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
Voyage revenues | $ | 36,644,591 | $ | 73,259,369 | $ | 89,995,123 | $ | 112,551,901 | $ | 113,045,961 | ||||||||||
Voyage expenses | (2,688,155 | ) | (6,213,804 | ) | (5,369,546 | ) | (6,180,754 | ) | (10,522,573 | ) | ||||||||||
Time charter equivalent revenues | $ | 33,956,436 | $ | 67,045,565 | $ | 84,625,577 | $ | 106,371,147 | $ | 102,519,480 | ||||||||||
Total voyage days for fleet | 4,288 | 9,346 | 11,871 | 14,018 | 15,240 | |||||||||||||||
Time charter equivalent (TCE) rate | $ | 7,919 | $ | 7,174 | $ | 7,129 | $ | 7,588 | $ | 6,727 | ||||||||||
(8) | 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. | |
(9) | 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. |
As of December 31, 2009 | ||||||||
Actual | As Adjusted | |||||||
In thousands of U.S. Dollars | ||||||||
Long-term debt obligations (including current portion)* | $ | 345,822,070 | $ | 318,016,353 | ||||
Stockholders’ equity: | ||||||||
Common stock, $0.01 par value per share, 100,000,000 shares authorized, actual and as adjusted; 22,310,000 shares issued and outstanding, actual; 21,104,881 shares issued and 21,104,214 shares outstanding as adjusted (1)(2) | $ | 223,101 | $ | 211,042 | ||||
Additional paid-in capital | $ | 284,100,096 | $ | 277,819,769 | ||||
Retained earnings | $ | 16,478,374 | $ | 16,478,374 | ||||
Total stockholders’ equity | $ | 300,801,931 | $ | 294,509,545 | ||||
Total capitalization | $ | 646,624,001 | $ | 612,525,898 | ||||
* | All of our indebtedness is secured. | |
(1) | Includes 42,002 unvested restricted shares as of December 31, 2009, of which 6,501 shares vested on March 18, 2010 ,and 667 were forfeited upon the resignation of one of our directors on April 22, 2010. | |
(2) | The 1,205,229 shares repurchased in 2010 have been cancelled and the 667 forfeited restricted shares forfeited in 2010 were held as treasury stock as of June 15, 2010. |
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• | supply and demand for LPG products; | ||
• | global and regional economic conditions; | ||
• | the distance LPG products are to be moved by sea; | ||
• | availability of alternative transportation means; and |
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• | changes in seaborne and other transportation patterns. |
• | the number of newbuilding deliveries; | ||
• | the scrapping rate of older vessels; | ||
• | LPG carrier prices; | ||
• | changes in environmental and other regulations that may limit the useful lives of vessels; and | ||
• | the number of vessels that are out of service. |
• | adverse global or regional economic or political conditions, particularly in LPG consuming regions, which could reduce energy consumption; | ||
• | a reduction in global or general industrial activity specifically in the plastics and chemical industry; | ||
• | increases in the cost of petroleum and natural gas from which LPG is derived; |
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• | decreases in the consumption of LPG or natural gas due to availability of new, alternative energy sources or increases in the price of LPG or natural gas relative to other energy sources or other factors making consumption of LPG or natural gas less attractive; and |
• | increases in pipelines for LPG, which are currently few in number, linking production areas and industrial and residential areas consuming LPG, or the conversion of existing non-petroleum gas pipelines to petroleum gas pipelines in those markets. |
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• | general economic and market conditions affecting the shipping industry; | ||
• | age, sophistication and condition of our vessels; | ||
• | types and sizes of vessels; | ||
• | availability of other modes of transportation; | ||
• | cost and delivery of schedules for newbuildings; | ||
• | governmental and other regulations; | ||
• | supply and demand for LPG products and, with respect to our product carriers, refined petroleum products; | ||
• | prevailing level of LPG charter rates and, with respect to our product carriers, the prevailing level of product carrier charter rates; and | ||
• | technological advances. |
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• | marine accident or disaster; | ||
• | piracy and terrorism; | ||
• | explosions; | ||
• | environmental accidents; | ||
• | pollution; | ||
• | loss of life; | ||
• | cargo and property losses or damage; and | ||
• | business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions. |
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• | incur additional indebtedness; |
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• | create liens on our assets; | ||
• | sell capital stock of our subsidiaries; | ||
• | make investments; | ||
• | engage in mergers or acquisitions; | ||
• | pay dividends; and | ||
• | make capital expenditures. |
• | maintain minimum cash balances in a pledged account with the lender at all times; | ||
• | ensure that our leverage, which is defined as total debt net of cash/total market adjusted assets, does not at any time exceed 80%; | ||
• | maintain a ratio of the aggregate market value of the vessels securing the loan to the principal amount outstanding under such loan at all times in excess of (i) 130% under our loan agreement with Fortis Bank-Athens Branch and NIBC Bank Netherlands and (ii) 125% under our loan agreements with Deutsche Bank, DnB NOR Bank ASA, DVB Bank S.E. Nordic Branch, EFG Eurobank Ergasias S.A., Emporiki Bank, National Bank of Greece and Scotiabank in regard to the portion of our facility secured by theGas Iconbut 100% for the portion of our facility secured by theNavig8 Fidelity; and | ||
• | ensure that our ratio of EBITDA to interest expense over the preceding twelve months is at all times more than 2.5 times. |
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• | our recognition and acceptance in the LPG carrier sector and, to a lesser extent, product carrier sector, including our ability to attract charterers; | ||
• | relations with charterers and charter brokers; | ||
• | operational expertise; and | ||
• | management experience. |
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• | work stoppages or other labor disturbances or other events that disrupt the operations of the shipyard building the vessels; | ||
• | quality or engineering problems; | ||
• | changes in governmental regulations or maritime self-regulatory organization standards; | ||
• | lack of raw materials; | ||
• | bankruptcy or other financial crisis of the shipyard building the vessel; | ||
• | our inability to obtain requisite financing or make timely payments; | ||
• | a backlog of orders at the shipyard building the vessel; | ||
• | hostilities, political or economic disturbances in the countries where the vessels are being built; | ||
• | weather interference or catastrophic event, such as a major earthquake or fire; | ||
• | our requests for changes to the original vessel specifications; | ||
• | requests from our customers, with which we have arranged charters for such vessels, to delay construction and delivery of such vessels due to weak economic conditions and shipping demand,; | ||
• | shortages of or delays in the receipt of necessary construction materials, such as steel; |
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• | our inability to obtain requisite permits or approvals; or | ||
• | a dispute with the shipyard building the vessel. |
• | locating and acquiring suitable vessels; | ||
• | identifying and completing acquisitions or joint ventures; | ||
• | integrating any acquired business successfully with our existing operations; | ||
• | expanding our customer base; | ||
• | managing our expansion; and | ||
• | obtaining required financing. |
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• | be costly; | ||
• | distract us from our core LPG carrier business; and | ||
• | divert management resources, |
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• | authorizing our Board of Directors to issue “blank check” preferred stock without stockholder approval; | ||
• | providing for a classified Board of Directors with staggered three-year terms; | ||
• | prohibiting cumulative voting in the election of directors; | ||
• | authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of 80% of the outstanding shares of our common stock entitled to vote for the directors; | ||
• | limiting the persons who may call special meetings of stockholders; | ||
• | establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and | ||
• | prohibiting certain transactions with interested stockholders. | ||
• | These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium. |
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Vessel | ||||||||||||
Year | Size | Vessel | Delivery | Employment | Expiration of | |||||||
Name | Built | (cbm) | Type | Date | Status | Charter(1) | ||||||
Gas Cathar | 2001 | 7,517 | fully-pressurized | October 2005 | Time Charter | May 2012 | ||||||
Gas Premiership | 2001 | 7,200 | fully-pressurized | March 2008 | Time Charter | March 2012 | ||||||
Gas Haralambos | 2007 | 7,000 | fully-pressurized | October 2007 | Spot | — | ||||||
Gas Marathon | 1995 | 6,572 | fully-pressurized | November 2005 | Time Charter | August 2010 | ||||||
Gas Chios | 1991 | 6,562 | fully-pressurized | October 2005 | Time Charter | April 2011 | ||||||
Gas Moxie | 1992 | 6,526 | fully-pressurized | May 2005 | Spot | — | ||||||
Gas Flawless | 2007 | 6,300 | fully-pressurized | February 2007 | Time Charter | February 2011 | ||||||
Gas Monarch | 1997 | 5,018 | fully-pressurized | December 2005 | Bareboat Charter | November 2010 | ||||||
Lyne | 1996 | 5,014 | fully-pressurized | May 2006 | Bareboat Charter | May 2011 | ||||||
Gas Emperor | 1995 | 5,013 | fully-pressurized | February 2005 | Bareboat Charter | August 2012 | ||||||
Catterick | 1995 | 5,001 | fully-pressurized | November 2005 | Time Charter | January 2012 | ||||||
Sir Ivor | 2003 | 5,000 | fully-pressurized | May 2006 | Bareboat Charter | May 2011 | ||||||
Gas Icon | 1994 | 5,000 | fully-pressurized | June 2007 | Time Charter | July 2010 | ||||||
Gas Kalogeros | 2007 | 5,000 | fully-pressurized | July 2007 | Time Charter | June 2011 | ||||||
Gas Defiance | 2008 | 5,000 | fully-pressurized | August 2008 | Time Charter | January 2011 | ||||||
Gas Shuriken | 2008 | 5,000 | fully-pressurized | October 2008 | Time Charter | October 2010 | ||||||
Gas Sincerity | 2000 | 4,123 | fully-pressurized | November 2005 | Time Charter | August 2010 | ||||||
Gas Spirit | 2001 | 4,112 | fully-pressurized | December 2005 | Time Charter | June 2010 | ||||||
Gas Zael | 2001 | 4,111 | fully-pressurized | December 2005 | Time Charter | January 2011 | ||||||
Gas Kaisen | 1991 | 4,109 | semi-refrigerated | November 2004 | Spot | — | ||||||
Gas Shanghai | 1999 | 3,526 | fully-pressurized | December 2004 | Time Charter | December 2010 | ||||||
Gas Nemesis | 1996 | 3,518 | fully-pressurized | May 2007 | Spot | — | ||||||
Gas Evoluzione | 1996 | 3,517 | fully-pressurized | July 2007 | Spot | — | ||||||
Gas Czar | 1995 | 3,510 | fully-pressurized | February 2006 | Spot | — | ||||||
Gas Astrid | 2009 | 3,500 | fully-pressurized | April 2009 | Time Charter | April 2011 | ||||||
Gas Legacy | 1998 | 3,500 | fully-pressurized | October 2005 | Time Charter | October 2010 |
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Vessel | ||||||||||||
Year | Size | Vessel | Delivery | Employment | Expiration of | |||||||
Name | Built | (cbm) | Type | Date | Status | Charter(1) | ||||||
Gas Sikousis | 2006 | 3,500 | fully-pressurized | August 2007 | Time Charter | May 2011 | ||||||
Gas Exelero | 2009 | 3,500 | fully-pressurized | June 2009 | Time Charter | June 2011 | ||||||
Gas Artic | 1992 | 3,434 | semi-refrigerated | April 2005 | Spot | — | ||||||
Gas Ice | 1991 | 3,434 | semi-refrigerated | April 2005 | Time Charter | July 2010 | ||||||
Chiltern | 1997 | 3,312 | fully-pressurized | June 2007 | Bareboat Charter | May 2013 | ||||||
Gas Pasha | 1995 | 3,244 | fully-pressurized | June 2006 | Time Charter | September 2011 | ||||||
Gas Crystal | 1990 | 3,211 | semi-refrigerated | November 2005 | Spot | — | ||||||
Gas Tiny | 1991 | 1,320 | semi-refrigerated | October 2004 | Time Charter | October 2010 | ||||||
Total: 34 vessels | 155,204 cbm |
Vessel | ||||||||||||||||
Year | Size | Vessel | Delivery | Employment | Expiration of | |||||||||||
Name | Built | (dwt) | Type | Date | Status | Charter(1) | ||||||||||
Navig8 Fidelity | 2008 | 47,000 | medium range product carrier | January 2008 | Bareboat Charter | January 2015 | ||||||||||
Navig8 Faith | 2008 | 47,000 | medium range product carrier | February 2008 | Bareboat Charter | February 2015 | ||||||||||
Alpine Endurance | 2009 | 46,000 | medium range product carrier | July 2009 | Bareboat Charter | July 2012 | ||||||||||
Spike(2) | 2010 | 115,804 | Aframax oil tanker | July 2010 | Bareboat Charter | July 2015 | ||||||||||
Total: 4 vessels | 255,804 dwt | |||||||||||||||
Total Current Fleet: | ||||||||||||||||
38 Vessels |
(1) | Earliest date charters could expire. Most charters include options to shorten or extend their term. | |
(2) | TheSpikeis scheduled to be delivered to us in July 2010, at which time it is scheduled to be deployed on a five year bareboat charter. |
Vessel | ||||||||||||||||
Year | Size | Vessel | Delivery | Employment | Expiration of | |||||||||||
Name | Built | (cbm) | Type | Date | Status | Charter | ||||||||||
TBN | 2010 | 5,000 | fully-pressurized | February 2011 | ||||||||||||
TBN | 2010 | 5,000 | fully-pressurized | March 2011 | ||||||||||||
TBN | 2011 | 5,000 | fully-pressurized | July 2011 | ||||||||||||
TBN | 2011 | 7,500 | fully-pressurized | November 2011 | ||||||||||||
TBN | 2012 | 7,500 | fully-pressurized | May 2012 | ||||||||||||
Total contracted | ||||||||||||||||
LPG carriers: | ||||||||||||||||
5 vessels | 30,000cbm |
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Year Ended | ||||
Customer | December 31, 2009 | |||
Shell | 17.0 | % | ||
Petredec | 15.0 | % | ||
Vitol | 13.0 | % | ||
Navig8 | 10.0 | % |
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• | natural resources damage and the costs of assessment thereof; |
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• | real and personal property damage; | ||
• | net loss of taxes, royalties, rents, fees and other lost revenues; | ||
• | lost profits or impairment of earning capacity due to property or natural resources damage; and | ||
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources. |
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• | on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications; | ||
• | on-board installation of ship security alert systems; | ||
• | the development of vessel security plans; and | ||
• | compliance with flag state security certification requirements. |
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• | Charters and revenues. Under a time charter, the charterer pays a fixed rate per day over the term of the charter; a time charter, including a short term time charter, may provide for rate adjustments and profit sharing. Under a bareboat charter, the charterer pays us a fixed rate for its use of our ship for the term of the charter. Under a voyage charter, we agree to transport a specified cargo from a loading port to a discharging port for a fixed amount. | ||
• | Charters and expenses. Under a time charter, we are responsible for the vessel’s operating costs (crew, provisions, stores, lubricants, insurance, maintenance and repairs) incurred during the term of the charter, while the charterer pays voyage expenses (port, canal and fuel costs) that are unique to each particular voyage. Under a bareboat charter, the charterer is responsible for all vessel operating expenses and voyage expenses incurred during the term of the charter. Under a voyage or spot charter, we are responsible for both the vessel operating expenses and the voyage expenses incurred in performing the charter. |
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• | Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was in our possession including off-hire days associated with major repairs, drydockings or special or intermediate surveys. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenue and the amount of expense that we record during that period. | ||
• | Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with major repairs, drydockings or special or intermediate surveys. The shipping industry uses voyage days (also referred to as available days) to measure the number of days in a period during which vessels are available to generate revenues. | ||
• | Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our calendar days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades or drydockings and other surveys. | ||
• | Cyclicality. The international gas carrier market, including the transport of LPG, is cyclical with attendant volatility in profitability, charter rates and vessel values, resulting from changes in the supply of, and demand for, LPG carrier capacity. Due to the current downturn in market conditions, there has been a decrease in the number of vessels being contracted under time or bareboat charters as charterers seek to keep their commitments on a shorter term basis, and as of June 15, 2010, we had eight vessels trading in the spot market. However, in comparing the prevailing one year time charter rate at June 15, 2010 against the prevailing one year time charter rate at June 15, 2009, rates, as well as vessel values, continue to remain relatively stable in the LPG sector of the shipping industry. On a fleet wide basis, on June 15, 2010, we had 37 vessels in our fleet, 34 LPG carriers and three product carriers. Of these vessels, eight were employed on bareboat charter and 29 were employed either on time charter or in the spot market. On June 15 2009, we had 42 vessels in our fleet, 40 LPG carriers and two product carriers. Of these vessels, 13 were employed on bareboat charters and 29 were employed either on time charter or in the spot market. The average rate per day per vessel earned on June 15, 2010 was $6,843 compared to $7,242 on June 15, 2009. | ||
To the extent we have vessels in the spot market, we are exposed to changes in spot rates for LPG carriers and such changes affect our earnings and the value of our LPG carriers at any given time. When LPG vessel prices are considered to be low, companies not usually involved in shipping may make speculative vessel orders, thereby increasing the LPG shipping supply, satisfying demand sooner and potentially suppressing charter rates. Each of the three product carriers in our fleet as of June 15, 2010 are deployed on a fixed rate bareboat charter with two expiring in the first quarter of 2015 and the third in the third quarter of 2012, which will limit our exposure to fluctuations in charter rates in the product carrier sector. | |||
• | Seasonality. The LPG carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of propane and butane for heating during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues may be stronger in fiscal quarters ended December 31 and March 31 and relatively weaker during the fiscal quarters ended June 30 and September 30, as was the case in 2007, 2008 and 2009. We have limited exposure to seasonality with respect to our product carriers as the three product carriers in our current fleet are deployed on fixed rate bareboat charters, with two through the first quarter of 2015 and the third through the third quarter of 2012. |
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Remaining | ||||||||||
Available | Outstanding | Remaining | ||||||||
Principal | Principal | Repayment | ||||||||
Lender(1) | Amount | Amount | Interest Rate | Maturity | Installments | |||||
FORTIS BANK ATHENS BRANCH(1)(2) | — | $50.71 million | The interest rate margin over LIBOR varies with the ratio of the outstanding balance of the loan to the aggregate market value of the vessels mortgaged thereunder as follows: if the ratio is less than 67% the interest rate is 0.75% over LIBOR; if the ratio is more than 67% but less than 77% the interest rate is 0.80% over LIBOR and if the ratio exceeds 77% the interest rate is 0.90% over LIBOR. The facility bore an average interest rate, including margin, of 1.70% during 2009, which represented an average LIBOR rate of 0.95% plus the prevailing margin of 0.75%. | Due May 2016 | Twenty six quarterly installments of $1.44 million plus a balloon payment of $13.27 million payable together with the last installment. |
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Remaining | ||||||||||
Available | Outstanding | Remaining | ||||||||
Principal | Principal | Repayment | ||||||||
Lender(1) | Amount | Amount | Interest Rate | Maturity | Installments | |||||
DNB NOR BANK ASA(3) | — | $67.48 million | The interest rate margin over LIBOR varies with the ratio of the aggregate market value of the vessels mortgaged under the loan to the amount outstanding thereunder. If the ratio is equal to or lower than 130%, the interest rate will be 0.85% over LIBOR; if the ratio is between 130% and 150%, the interest rate is 0.75% over LIBOR and if the ratio is equal to or higher than 150%, the interest rate is 0.70% over LIBOR. The facility bore an average interest rate, including margin, of 2.63% during 2009, which represented an average LIBOR rate of 1.88% plus the prevailing margin of 0.75%. | Due March 2016 | One semi-annual payment of $8.19 million and eleven semi-annual payments of $3.37 million, plus a balloon payment of $22.22 million payable together with the final installment. | |||||
DNB NOR BANK ASA(4) | — | $4.13 million | The interest rate margin over LIBOR varies with the ratio of the aggregate market value of the vessel mortgaged under the loan to the amount outstanding thereunder. If the ratio is equal to or lower than 130%, the interest rate will be 0.85% over LIBOR; if the ratio is between 130% and 150%, the interest rate is 0.75% over LIBOR and if the ratio is equal to or higher than 150%, | Due June 2016 | Thirteen semi-annual installments of $0.24 million plus a balloon payment of $1.01 million payable together with the last installment. |
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Remaining | ||||||||||
Available | Outstanding | Remaining | ||||||||
Principal | Principal | Repayment | ||||||||
Lender(1) | Amount | Amount | Interest Rate | Maturity | Installments | |||||
the interest rate is 0.70% over LIBOR. The facility bore an average interest rate, including margin, of 1.83% during 2009, which represented an average LIBOR rate of 1.13% plus the prevailing margin of 0.70%. | ||||||||||
SCOTIABANK(5) | — | $42.11 million | LIBOR plus 0.70% | Due June 2015 Due December 2017 | $5.15 million is repayable in ten consecutive, semi-annual installments of $0.34 million each, plus a balloon payment of $1.75 million payable together with the last installment. $36.96 million is repayable, in fifteen consecutive semi-annual installments of $1.54 million each, plus a balloon payment of $13.86 million payable together with the last installment. | |||||
NATIONAL BANK OF GREECE(6) | — | $31.30 million | LIBOR plus 0.95% until the repayment of the third installment and LIBOR plus 0.80% thereafter. | Due Nov 2020 | Twenty-two consecutive semi-annual installments of $0.97 million each plus a balloon payment of $9.96 million payable together with the last installment. | |||||
DEUTSCHE BANK(7) | — | $35.88 million | LIBOR plus 0.70% up to October 21, 2009 and. LIBOR plus 2.00% thereafter. | Due Feb 2020 | Forty consecutive quarterly installments of $0.625 million and a balloon payment of $10.88 million. |
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Remaining | ||||||||||
Available | Outstanding | Remaining | ||||||||
Principal | Principal | Repayment | ||||||||
Lender(1) | Amount | Amount | Interest Rate | Maturity | Installments | |||||
EMPORIKI BANK(8) | — | $27.72 million | LIBOR plus 0.90%. | Due Oct 2020 | Twenty two semi-annual installments of $0.86 million, plus a balloon payment of $8.8 million, payable together with the last installment. | |||||
DVB BANK(9) | — | $31.16 million | LIBOR plus 2.85%. | Due Jul 2014 | $18.43 million is repayable in eighteen consecutive, quarterly installments of $0.41 million each, plus a balloon payment of $11.05 million payable together with the last installment. $12.73 million is repayable, in nineteen consecutive quarterly installments of $0.22 million each, plus a balloon payment of $8.55 million payable together with the last installment. | |||||
NIBC BANK(10) | — | $26.70 million | LIBOR plus 3.00%. | Due Jul 2014 | Five semi-annual installments of $1.64 million each and five semi-annual installments of $1.08 million and a balloon payment of $13.10 million. | |||||
EFG EUROBANK - ERGASIAS(11) | — | $28.65 million | LIBOR plus 2.50%. | Due Jul 2019 | Nine consecutive, quarterly installments of $0.60 million each, thirty consecutive, quarterly installments of $0.39 million and a balloon payment of $11.55 million. |
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(1) | Our credit facility with Fortis Bank Athens Branch was, as of December 31, 2009, collateralized by mortgages and other security relating to eleven LPG vessels, theSir Ivor, theLyne, theGas Prophet, theGas Tiny, theGas Courchevel, theGas Shanghai, theGas Emperor, theGas Ice, theGas Arctic, theGas Texianaand theGas Amazon. | |
(2) | Borrowings under our credit facility with Fortis Bank Athens Branch repaid the outstanding balance of our credit facility with Fortis Bank for up to $54.0 million, which was fully drawn in May 2005. | |
(3) | Our 2005 credit facility with DnB NOR Bank ASA was, as of December 31, 2009, collateralized by mortgages and other security relating to theGas Marathon, theGas Sincerity, theGas Cathar, theGas Legacy, theSweet Dream(renamed in February 2006 as theGas Monarch), theGas Czar, theGas Eternity, theGas Flawlessand theGas Premiership | |
(4) | Our 2006 credit facility with DnB NOR Bank ASA was, as of December 31, 2009, collateralized by mortgages and other security relating to theGas Pasha. | |
(5) | Our credit facility agreement is with the Scotiabank (Ireland) Limited, as lender, Scotiabank Europe plc, as security trustee, and The Bank of Nova Scotia, as swap bank. Our Scotiabank credit facility was, as of December 31, 2009, collateralized by mortgages and other security relating to the Gas Icon and theNavig8 Fidelity. | |
(6) | Our 2008 credit facility with National Bank of Greece was, as of December 31, 2009, collateralized by mortgages and other security relating to theGas Defianceand theGas Shuriken. | |
(7) | Our 2008 credit facility with Deutsche Bank was, as of December 31, 2009, collateralized by mortgages and other security relating to theNavig8 Faith. | |
(8) | Our 2008 credit facility with Emporiki Bank was, as of December 31, 2009, collateralized by mortgages and other security relating to theGas Sikousisand theGas Kalogeros. | |
(9) | Our 2009 credit facility with DVB Bank was, as of December 31, 2009, collateralized by mortgages and other security relating to theGas Astrid, theChilternand theGas Exelero. | |
(10) | Our 2009 credit facility with NIBC Bank was, as of December 31, 2009, collateralized by mortgages and other security relating to theGas Haralambos, theGas Spiritand theSea Bird II. | |
(11) | Our 2009 credit facility with EFG Eurobank — Ergasias S.A. was, as of December 31, 2009, collateralized by mortgages and other security relating to the Alpine Endurance. |
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• | ensure that our leverage, which is defined as total debt net of cash/total market adjusted assets, does not at any time exceed 80%; | ||
• | maintain a ratio of the aggregate market value of the vessels securing the loan to the principal amount outstanding under such loan (which we sometimes refer to as the value, maintenance clause) at all times in excess of (i) 130% under our loan agreement with Fortis Bank-Athens Branch and NIBC Bank N.V. (ii) 125% under our loan agreements with Deutsche Bank, DnB NOR Bank ASA, DVB Bank S.E., Nordic Branch, EFG Eurobank Ergasias S.A., Emporiki Bank, National Bank of Greece and Scotiabank; | ||
• | ensure that our ratio of EBITDA to interest expense over the preceding twelve months is at all times more than 2.5 times; and | ||
• | ensure that members of the Vafias family at all times own at least 15% of our outstanding capital stock. | ||
• | In addition, our loan agreement with Fortis Bank-Athens Branch requires us to maintain a minimum cash balance equivalent to six months interest in a pledged account with the lender at all times; our loan agreements with Scotiabank and Deutsche Bank each require us to maintain a cash balance equivalent of $200,000 for each vessel mortgaged to Scotiabank or Deutsche Bank, as applicable, at all times; our loan agreement with Emporiki Bank requires us to maintain an average cash balance equivalent of $800,000 with Emporiki Bank at all times our loan agreement with EFG Eurobank requires us to maintain an aggregate cash balance equivalent of $200,000 with EFG Eurobank at all times; our loan agreement with National Bank of Greece requires us to deposit on a monthly basis 1/6th of the relevant installment of principal and 1/6th of the relevant fraction of the next interest payment that are both due on a six monthly basis. Our loan agreements with DnB Nor Bank require us at all times to keep the equivalent of six months interest payable on deposit with the DnB Nor Bank at all times. |
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Payments due by period (in thousands) | ||||||||||||||||||||
More than | ||||||||||||||||||||
5 years | ||||||||||||||||||||
(After | ||||||||||||||||||||
Less than 1 | 1-3 years | 3-5 years | January 1, | |||||||||||||||||
Total | year (2010) | (2011-2012) | (2013-2014) | 2015) | ||||||||||||||||
Long-term debt obligations | $ | 345,822 | $ | 36,167 | $ | 60,718 | $ | 89,963 | $ | 158,975 | ||||||||||
Interest on principal amounts outstanding(1) | 60,048 | 7,248 | 16,908 | 15,748 | 20,144 | |||||||||||||||
Management fees(2) | 7,592 | 5,127 | 2,465 | — | — | |||||||||||||||
Office lease(3) | 120 | 60 | 60 | — | — | |||||||||||||||
Operating lease(4) | 90 | 49 | 41 | — | — | |||||||||||||||
Vessel purchase agreements(5) | 104,157 | 14,217 | 89,940 | — | — | |||||||||||||||
Total | $ | 517,832 | $ | 62,869 | $ | 170,133 | $ | 105,711 | $ | 179,119 | ||||||||||
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(1) | Based on assumed LIBOR rates of 0.75% for 2010, 1.50% for 2011-2012, 2.25% for 2013-2014 and 3.0% thereafter, and the effect of our interest rate swap arrangements. | |
(2) | Under our management agreement with Stealth Maritime, we pay it $125 per vessel per day for vessels on bareboat charter and $440 per vessel per day for vessels not on bareboat charter. Based on the payment of a management fee of $440 per vessel per day for vessels not on bareboat charter and $125 per day for vessels on bareboat charter and our currently contracted vessel acquisitions, we expect to pay at least $5.1 million per year to Stealth Maritime as management fees under the management agreement. We also will pay 1.25% of the gross freight, demurrage and charter hire collected from employment of our ships and 1% of the contract price of any vessels bought or sold on our behalf. In addition, we will reimburse Stealth Maritime for its payment of the compensation to our Chief Executive Officer and Chief Financial Officer. Such compensation was in the aggregate amount of €902,990 (US $1,267,981 based on the average exchange rate of €1.00: US $1.404 in effect throughout 2009). The initial term of our management agreement expires in June 2010 but extends on a year-to-year basis thereafter unless six-month written notice is provided prior to the expiration of the term. Such notice has not been given by either party. | |
(3) | We lease office space from the Vafias Group. This lease was renewed effective January 3, 2010 for two years at a rate of €42,000 per year. | |
(4) | In October 2005, we entered into a three year cancelable operating lease for a motor vehicle. The initial term of the lease terminated in October 2008. The lease was renewed effective October 2008 for a further three years. The cost is Euro 34,200 per year. | |
(5) | The $104.16 million set forth in the above table (converted from our contractual obligation for Yen 9,606,400,000 at the exchange rate on December 31, 2009), represents the remaining balance, as of December 31, 2009, for five newbuilding handy size LPG carriers which is due upon the respective delivery of these vessels to us scheduled from February 2011 and May 2012. On June 4, 2010, we agreed to acquire one crude oil tanker for $56.5 million, payable upon its delivery to us scheduled for July 2010, which amount is not reflected in the above table. |
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Item 6. | Directors, Senior Management and Employees |
Year | ||||||||||||||
Year | Director’s | |||||||||||||
Became | Current | |||||||||||||
Name | Age | Positions | Director | Term Expires | ||||||||||
Harry N. Vafias | 32 | President, Chief Executive Officer and Class III Director | 2004 | 2012 | ||||||||||
Andrew J. Simmons | 55 | Chief Financial Officer | — | — | ||||||||||
Michael G. Jolliffe | 60 | Chairman of the Board, Class II Director | 2004 | 2010 | ||||||||||
Lambros Babilis | 42 | Deputy Chairman and Class I Director | 2007 | 2011 | ||||||||||
Markos Drakos | 50 | Class III Director | 2006 | 2012 |
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• | a Code of Business Conduct and Ethics; | ||
• | a Nominating and Corporate Governance Committee Charter; | ||
• | a Compensation Committee Charter; and | ||
• | an Audit Committee Charter. |
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• | integrity of the Company’s financial statements, including its system of internal controls; | ||
• | the Company’s compliance with legal and regulatory requirements; | ||
• | the independent auditor’s qualifications and independence; and | ||
• | the performance of the Company’s independent audit function and independent auditors, |
• | reviewing the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary; | ||
• | identifying candidates for the approval of the Board to fill Board vacancies as and when they arise as well as developing plans for succession, in particular, of the chairman and executive officers; | ||
• | overseeing the Board’s annual evaluation of its own performance and the performance of other Board committees; and | ||
• | developing and recommending to the Board for adoption a set of Corporate Governance Guidelines applicable to the Company and to periodically review the same. |
• | establishing and periodically reviewing the Company’s compensation programs; | ||
• | reviewing the performance of directors, officers and employees of the Company who are eligible for awards and benefits under any plan or program and adjust compensation arrangements as appropriate based on performance; | ||
• | reviewing and monitoring management development and succession plans and activities; | ||
• | reporting on compensation arrangements and incentive grants to the Board; and |
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• | preparing a Compensation Committee report to be included in our annual proxy statement. |
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Item 7. | Major Shareholders and Related Party Transactions |
• | each person or entity that we know beneficially owns 5% or more of our shares of common stock; | ||
• | our chief executive officer and our other members of senior management; | ||
• | each of our directors; and | ||
• | all of our current directors and executive officers as a group. |
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Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
Principal Stockholders | ||||||||
Flawless Management Inc.(1) | 4,000,000 | 19.0 | % | |||||
331 Kifissias Avenue Erithrea 14561 Athens, Greece | ||||||||
The Bessemer Group, Incorporated(2) | 2,194,200 | 10.4 | % | |||||
100 Woodbridge Center Drive Woodbridge, New Jersey 07095-0980 | ||||||||
Castor Investment Company(3) | 2,000,000 | 9.5 | % | |||||
Trust Company Complex Ajeltake Road, Ajeltake Island Marshall Islands MH 96960 | ||||||||
Zesiger Capital Group LLC(4) | 1,919,250 | 9.1 | % | |||||
320 Park Avenue, 30th Floor New York, New York 10022 | ||||||||
Royce & Associates, LLC(5) | 1,137,339 | 5.4 | % | |||||
745 Park Avenue New York, New York 10021 | ||||||||
Executive Officers and Directors | ||||||||
Harry N. Vafias(6) | 4,200,000 | 19.9 | (1) | |||||
Andrew J. Simmons | — | — | ||||||
Michael G. Jolliffe(7) | 12,000 | * | ||||||
Lambros Babilis(8) | 9,396 | * | ||||||
Markos Drakos(9) | 8,000 | * | ||||||
Thanassis J. Martinos(10) | 403,333 | 1.9 | % | |||||
All executive officers and directors as a group (5 persons) | 4,229,396 | 20.1 | % | |||||
* | Less than 1%. | |
(1) | According to Amendment No. 2 to a Schedule 13G filed with the SEC on June 27, 2009 jointly filed by Flawless Management Inc. and Harry N. Vafias, Flawless Management Inc. beneficially owns 4,000,0000 shares of common stock and has sole voting power and sole dispositive power with respect to all such shares. Harry N. Vafias, our Chief Executive Officer, President and Director, is the sole stockholder of Flawless Management Inc. | |
(2) | According to a Schedule 13G filed with the SEC on February 16, 2010, The Bessemer Group, Incorporated (“BGI”), as a parent holding company, and Bessemer Trust Company, N.A. (“BTNA”), Bessemer Investment management LLC (“BIM”) and Old Westbury Real Return Fund (the “Old Westbury Fund”) beneficially own an aggregate of 2,194,200 shares of our common stock. The filing indicates that BTNA is wholly owned by BGI, BIM is a wholly owned subsidiary of BTNA and is the investment advisor to the Old Westbury Fund, BTNA is a trust company that manages accounts for the benefit of others and BIM is a registered investment advisor that furnishes investment advisory services to the Old Westbury Fund. The filing also indicates that the shares are held by the Old Westbury Fund and that BGI, BTNA, BIM and the Old Westbury Fund have shared voting and shared dispositive power with respect to the 2,194,200 shares. The address of BGI is 100 Woodbridge Center Drive, Woodbridge, NJ 07095-01980. The address of BTNA and BIM is 630 Fifth Avenue, New York, NY 10111. The address of Old Westbury Fund is 3435 Steltzer Road, Columbus, OH 43219. | |
(3) | With respect to the 2,000,000 shares owned by Castor Investment Company, Mr. Constantinos Tsaousoglou has sole voting and dispositive power. Castor Investment Company’s address is Trust Company Complex, Ajeltake Road, Ajeltake Island, Marshall Islands MH 96960 | |
(4) | According to Amendment No. 3 to Schedule 13G filed with the SEC on February 10, 2010, Zesiger Capital Group LLC beneficially owns 1,919,250 shares of common stock and has sole voting power with respect to 1,539,000 such shares and sole dispositive power with respect to all such shares. The shares of common stock are owned of record by clients of Zesiger Capital Group LLC, an investment advisor. | |
(5) | According to a Schedule 13G filed on February 9, 2010, Royce & Associates, LLC beneficially owns, and has sole voting and dispositive power with respect to 1,137,339 shares of common stock. Royce & Associates, LLC’s address is 745 Fifth Avenue, New York, NY 10151. | |
(6) | According to Amendment No. 2 to a Schedule 13G filed with the SEC on July 27, 2009 jointly filed by Flawless Management Inc. and Harry N. Vafias, Harry N. Vafias beneficially owns 4,200,000 shares of common stock, which includes (i) 4,200,000 shares of common stock, 4,175,000 of which by virtue of the shares owned indirectly through Flawless Management Inc., and (ii) 25,000 restricted shares which are scheduled to vest on October 31, 2010. Harry N. Vafias has sole voting power and sole dispositive power with respect to all such shares. |
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(7) | Mr. Michael G. Jolliffe beneficially owns (i) 10,000 shares of common stock and (ii) 2,000 restricted shares which are scheduled to vest on October 31, 2010. | |
(8) | Mr. Lambros Babilis beneficially owns (i) 7,047 shares of common stock and (ii) 2,349 restricted shares which are scheduled to vest on March 18, 2011. | |
(9) | Mr. Markos Drakos beneficially owns (i) 6,666 shares of common stock and (ii) 1,334 restricted shares which are scheduled to vest on October 31, 2010. | |
(10) | Mr. Thanassis Martinos beneficially owns 400,000 shares of common stock by virtue of shares owned indirectly through Nike Investments Corporation, the beneficial owner being Mr. Thanassis Martinos, a former director of the Company. The address of Nike Investments Corporation is 80 Broad Street, Monrovia, Liberia. In addition, Mr. Thanassis G. Martinos beneficially owns 3,333 shares of common stock. Mr. Martinos resigned from our Board of Directors, effective April 22, 2010. |
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Item 8. | Financial Information |
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Item 9. | The Offer and Listing |
High | Low | |||||||
Year Ended December 31, 2005 (October 6, 2005 through December 31, 2005) | $ | 14.59 | $ | 10.80 | ||||
Year Ended December 31, 2006 | 14.79 | 10.90 | ||||||
Year Ended December 31, 2007 | 20.00 | 11.40 | ||||||
2008 | ||||||||
Year Ended December 31, 2008 | 17.91 | 2.51 | ||||||
First Quarter | 16.30 | 12.34 | ||||||
Second Quarter | 17.91 | 13.75 | ||||||
Third Quarter | 17.09 | 12.55 | ||||||
Fourth Quarter | 13.41 | 2.51 | ||||||
2009 | ||||||||
Year Ended December 31, 2009 | 17.91 | 2.51 | ||||||
First Quarter | 6.73 | 3.93 | ||||||
Second Quarter | 6.38 | 4.05 | ||||||
Third Quarter | 6.64 | 4.44 | ||||||
Fourth Quarter | 7.64 | 5.65 | ||||||
October 2009 | 7.64 | 6.03 | ||||||
November 2009 | 7.06 | 5.65 | ||||||
December 2009 | 6.60 | 5.95 |
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High | Low | |||||||
2010 | ||||||||
Year Ended December 31, 2010 (through June 18, 2010) | 6.45 | 4.42 | ||||||
First Quarter | 6.45 | 4.55 | ||||||
January 2010 | 6.45 | 4.69 | ||||||
February 2010 | 5.11 | 4.55 | ||||||
March 2010 | 5.50 | 4.56 | ||||||
Second Quarter (through June 18, 2010) | 5.98 | 4.42 | ||||||
April 2010 | 5.98 | 4.42 | ||||||
May 2010 | 5.63 | 4.78 | ||||||
June 2010 (through June 18, 2010) | 5.40 | 4.62 |
![(GRAPH)](https://capedge.com/proxy/20-F/0000950123-10-062346/y03665y0366506.gif)
Item 10. | Additional Information |
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• | persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and | ||
• | persons who are affiliates or associates of the corporation and who hold 15% or more of the corporation’s outstanding voting stock at any time within three years before the date on which the person’s status as an interested stockholder is determined. |
• | certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company; |
• | the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation; | ||
• | certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; | ||
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and | ||
• | any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
• | before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder; | ||
• | upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares; | ||
• | following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or | ||
• | a transaction with a stockholder that was or became an interested stockholder prior to the consummation of our initial public offering. |
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• | we or our subsidiaries have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and | ||
• | substantially all (at least 90%) of our United States-source shipping income, other than leasing income or that of a subsidiary, is attributable to regularly scheduled transportation, such as the operation of a vessel |
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that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
• | we or our subsidiaries have, or are considered to have a fixed place of business in the United States that is involved in the meaning of such leasing income; and | ||
• | substantially all (at least 90%) of our United States-source shipping income from leasing or that of a subsidiary is attributable to such fixed place of business. |
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• | at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or | ||
• | at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income. |
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• | the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common stock; | ||
• | the amount allocated to the current taxable year or to any portion of the United States Holder’s holding period prior to the first taxable year for which we were a PFIC would be taxed as ordinary income; and | ||
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
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• | the gain is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States. If the Non-United States Holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain generally is taxable only if it is attributable to a permanent establishment maintained by the Non-United States Holder in the United States; or |
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• | the Non-United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met. |
• | fails to provide an accurate taxpayer identification number; | ||
• | is notified by the Internal Revenue Service that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or | ||
• | in certain circumstances, fails to comply with applicable certification requirements. |
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Floating Rate | ||||||||||||||||||||
Notional Amount on | Fixed Rate | (StealthGas | Fair Value December | Fair Value December | Fair Value December | |||||||||||||||
Counterparty | Contract Trade Date | Effective Date | Termination Date | Effective Date | (StealthGas Pays) | Receives) | 31, 2007 | 31, 2008 | 31, 2009 | |||||||||||
FORTIS | March 31, 2005 | May 30, 2007 | May 30, 2016 | $22.5 million | 4.55 | %(1) | 3 month U.S. dollar LIBOR | $(0.3) million | $(1.0) million | $(1.0) million | ||||||||||
DNB NOR BANK ASA | January 23, 2006 | March 9, 2006 | March 9, 2016 | $22.5 million | 4.52 | %(2) | 6 month U.S. dollar LIBOR | $(0.3) million | $(1.7) million | $(1.3) million | ||||||||||
DNB NOR BANK ASA | May 22, 2006 | September 11, 2006 | September 11, 2011 | $25.0 million | 5.42 | % | 6 month U.S. dollar LIBOR | $(1.2) million | $(2.6) million | — | ||||||||||
DNB NOR BANK ASA | June 22, 2007 | September 11, 2007 | September 11, 2012 | $25.0 million | 5.58 | % | 6 month U.S. dollar LIBOR | $(1.5) million | $(3.5) million | — | ||||||||||
FORTIS | January 15, 2008 | January 17, 2008 | January 17, 2013 | $41.7 million | 3.66 | % | 3 month U.S. dollar LIBOR | — | $(2.4) million | $(1.8) million | ||||||||||
DEUTSCHE BANK | March 18, 2008 | March 20, 2008 | March 20, 2013 | $40.3 million | 3.09 | % | 6 month U.S. dollar LIBOR | — | $(1.5) million | $(1.1) million | ||||||||||
DNB NOR BANK ASA | July 16, 2009 | September 9, 2009 | March 9, 2016 | $53.3 million | 4.73 | % | 3 month U.S. dollar LIBOR | — | — | $(4.8) million | ||||||||||
NIBC BANK N.V. | July 16, 2009 | July 20, 2009 | July 2, 2014 | $23.9 million | 2.77 | % | 3 month U.S. dollar LIBOR | — | — | $(0.3) million |
(1) | If the United States dollar three month LIBOR is less than 7.5%, the fixed rate is 4.55%. If the United States dollar three month LIBOR is equal to or higher than 7.5%, then the fixed rate would be the United States dollar three month LIBOR. | |
(2) | If the United States dollar six month LIBOR is less than or equal to 5.75%, the fixed rate is 4.52%. If the United States dollar six month LIBOR is higher than 5.75%, then the fixed rate would be the United States dollar six month LIBOR less 123 basis points. |
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Athens, Greece
June 28, 2010
2009 | 2008 | |||||||
Audit fees | $ | 713 | $ | 661 | ||||
Further assurance/audit related fees | — | — | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
Total | $ | 713 | $ | 661 |
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Total Number | ||||||||||||||||
of Shares | Maximum | |||||||||||||||
Purchased as | Number of Shares | |||||||||||||||
Total | Average | Part of Publicly | that May Yet Be | |||||||||||||
Number of | Price | Announced | Purchased Under | |||||||||||||
Shares | Paid Per | Plans or | the Plans or | |||||||||||||
Purchased | Share | Programs | Programs | |||||||||||||
Period | (a) | (b) | (c) | (d) | ||||||||||||
April 22, to April 29, 2010 | 545,843 | $ | 5.40 | 545,843 | N/A | (1) | ||||||||||
May 6, to May 28, 2010 | 112,629 | $ | 5.05 | 658,472 | N/A | (1) | ||||||||||
June 2010 (through June 18, 2010) | 546,757 | $ | 5.06 | 1,205,229 | N/A | (1) |
(1) | Approximately $8.72 million remains unused under the approved stock repurchase program as of the date of this report. |
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Number | Description | |
1.1 | Amended and Restated Articles of Incorporation of the Company* | |
1.2 | Amended and Restated Bylaws of the Company* | |
4.1 | Amended and Restated Management Agreement between the Company and Stealth Maritime S.A., as amended*** | |
4.2 | Form of Right of First Refusal among the Company, Harry Vafias and Stealth Maritime S.A.* | |
4.3 | StealthGas Inc.’s 2005 Equity Compensation Plan, amended and restated***** | |
4.4 | Loan Agreement with Fortis Bank (Nederland) N.V. and Deed of Release of Security and Obligations* | |
4.5 | Loan Agreement, dated December 5, 2005 with DnB Nor Bank ASA** | |
4.6 | Supplemental Agreement, dated February 27, 2006, with DnB Nor Bank ASA** | |
4.7 | Loan Agreement, dated May 17, 2006, with Fortis Bank-Athens Branch*** | |
4.8 | Loan Agreement, dated June 28, 2006, with DnB Nor Bank ASA*** | |
4.9 | Letter Agreement, dated August 2, 2006, with Nike Investments Corporation, as amended*** | |
4.10 | Memorandum of Agreement, dated March 30, 2007, for theGas Kalogeros*** | |
4.11 | Memorandum of Agreement, dated March 30, 2007, for theGas Sikousis*** | |
4.12 | Promissory Note dated May 16, 2007 issued in favor of Brave Maritime Corp.*** | |
4.13 | Second Supplemental Agreement, between Empire Spirit Ltd., Independent Trader Ltd., Triathlon Inc., Soleil Trust Inc., Jungle Investment Limited and Northern Yield Shipping Limited and DnB NOR Bank ASA, dated January 30, 2007**** | |
4.14 | Loan Agreement, dated as of June 21, 2007, between StealthGas Inc., as borrower, Scotiabank (Ireland) Limited, as lender, Scotiabank Europe plc, as security trustee, and The Bank of Nova Scotia, as swap bank***** | |
4.15 | Supplemental Agreement, dated January 8, 2008, between StealthGas Inc., as borrower, Scotiabank (Ireland) Limited, as lender, Scotiabank Europe plc, as security trustee, and The Bank of Nova Scotia, as swap bank***** | |
4.16 | Memorandum of Agreement, dated February 29, 2008, for theGas Defiance***** | |
4.17 | Memorandum of Agreement, dated February 29, 2008, for theGas Shuriken***** | |
4.18 | Memorandum of Agreement, dated February 29, 2008, for theGas Astrid***** | |
4.19 | Memorandum of Agreement, dated February 29, 2008, for theGas Exelero***** | |
4.20 | Memorandum of Agreement, dated February 29, 2008, for theGas Natalie**** | |
4.21 | Loan Agreement, dated July 30, 2008, between StealthGas Inc., as borrower, and National Bank of Greece, as lender***** | |
4.22 | Loan Agreement, dated August 28, 2008, between StealthGas Inc., as borrower, and Emporiki Bank of Greece, S.A., as lender***** | |
4.23 | Third Supplemental Agreement, dated March 14, 2008, Empire Spirit Ltd., Independent Trader Ltd., Triathlon Inc., Soleil Trust Inc., Jungle Investment Limited and Northern Yield Shipping Limited, as joint and several borrowers, and DnB NOR Bank ASA, as lender***** | |
4.24 | Loan Agreement, dated January 30, 2009, between Casteli Castle Inc., as borrower, DnB NOR Bank ASA, as lender, DnB NOR Bank ASA, as Agent, Account Bank and Security Trustee, and DnB NOR Bank ASA as Swap Bank***** | |
4.25 | Loan Agreement, dated February 12, 2008, between StealthGas Inc., as borrower, and Deutsche Bank AG Filiale Deutschlandgeschaft, as lender***** | |
4.26 | Loan Agreement, dated February 19, 2009, between EFG Eurobank Ergasias S.A., as lender, and StealthGas Inc., as borrower***** | |
4.27 | Loan Agreement, dated February 18, 2009, between StealthGas Inc., as borrower, DVB Bank S.E., Nordic Branch, as lender, and DVB BANK S.E., Nordic Branch as Arranger, Agent, Security Trustee and Swap Bank***** | |
4.28 | Memorandum for Agreement, dated June 4, 2010, for the M/VSpike, and Addendum No. 1 thereto, date June 22, 2010 | |
4.29 | Amendment Letter, dated March 18, 2010, between StealthGas and Scotiabank (Ireland) Limited, in respect of Loan Agreement, dated June 21, 2007, as amended | |
4.30 | Supplemental Agreement, dated October 21, 2009, between StealthGas Inc., as borrower, and Deutsche Bank AG Filiale Deutschlandgeschaft | |
4.31 | Second Supplemental Agreement, dated April 27, 2010, between StealthGas Inc., as borrower, and |
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Number | Description | |
Deutsche Bank AG Filiale Deutschlandgeschaft in respect of loan agreement, dated February 12, 2008, as amended, as supplemented by a supplemental agreement dated October 21, 2009. | ||
8 | Subsidiaries | |
11.1 | Code of Business Conduct and Ethics*** | |
12.1 | Certification of the Chief Executive Officer | |
12.2 | Certification of the Chief Financial Officer | |
13.1 | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002 | |
13.2 | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002 | |
15.1 | Consent of Independent Registered Public Accounting Firm |
* | Previously filed as an exhibit to the Company’s Registration Statement on Form F-1 (File No. 333-127905) filed with the SEC and hereby incorporated by reference to such Registration Statement. | |
** | Previously filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2005 filed with the SEC on April 20, 2006. | |
*** | Previously filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2007 filed with the SEC on June 5, 2007. | |
**** | Previously filed as an exhibit to the Company’s Report on Form 6-K filed with the SEC on July 17, 2007. | |
***** | Previously filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2008 filed with the SEC on June 11, 2008. | |
***** | Previously filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2009 filed with the SEC on June 18, 2009. |
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By: | /s/ Harry N. Vafias | |||
Title: President and Chief Executive Officer |
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Consolidated Financial Statements
Pages | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 — F-37 |
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Athens, Greece
June 28, 2010
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Consolidated Balance Sheets
As of December 31, 2008 and 2009 (Expressed in United States Dollars, except for share data)
December 31, | ||||||||||||
Note | 2008 | 2009 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 41,848,059 | 44,076,339 | ||||||||||
Trade and other receivables | 2,325,438 | 1,685,558 | ||||||||||
Claims receivable | 607,306 | 493,852 | ||||||||||
Inventories | 4 | 1,254,142 | 2,146,919 | |||||||||
Advances and prepayments | 812,654 | 625,870 | ||||||||||
Restricted cash | 3,672,439 | 4,399,188 | ||||||||||
Vessels held for sale | 6 | — | 13,829,512 | |||||||||
Fair value of derivatives | 1,938,480 | 1,774,515 | ||||||||||
Total current assets | 52,458,518 | 69,031,753 | ||||||||||
Non current assets | ||||||||||||
Advances for vessels under construction and acquisitions | 5 | 23,009,597 | 23,485,905 | |||||||||
Vessels, net | 6 | 551,771,040 | 594,931,791 | |||||||||
Other receivables | 246,219 | 169,616 | ||||||||||
Restricted cash | 600,000 | 1,550,000 | ||||||||||
Deferred finance charges, net of accumulated amortization of $267,118 and $469,888 | 7 | 550,226 | 1,466,756 | |||||||||
Fair value of derivatives | 13 | 5,711,523 | 1,861,189 | |||||||||
Total non current assets | 581,888,605 | 623,465,257 | ||||||||||
Total assets | 634,347,123 | 692,497,010 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Payable to related party | 3 | 2,407,377 | 7,310,097 | |||||||||
Trade accounts payable | 3,256,175 | 4,223,548 | ||||||||||
Other accrued liabilities | 8 | 4,518,097 | 6,095,322 | |||||||||
Customer deposits | 11 | 1,436,369 | 3,522,287 | |||||||||
Deferred income | 10 | 4,776,359 | 3,643,963 | |||||||||
Other current liability | 5 | — | 8,061,250 | |||||||||
Current portion of long-term debt | 12 | 24,380,554 | 31,612,718 | |||||||||
Current portion of long-term debt associated with vessel held for sale | 6 | — | 4,554,270 | |||||||||
Total current liabilities | 40,774,931 | 69,023,455 | ||||||||||
Non current liabilities | ||||||||||||
Fair value of derivatives | 13 | 12,762,979 | 10,327,792 | |||||||||
Customer deposits | 11 | 3,467,017 | — | |||||||||
Fair value of below market acquired time charter | 9 | 181,552 | — | |||||||||
Other non current liability | 5 | — | 2,688,750 | |||||||||
Long-term debt | 12 | 259,313,319 | 309,655,082 | |||||||||
Total non current liabilities | 275,724,867 | 322,671,624 | ||||||||||
Total liabilities | 316,499,798 | 391,695,079 | ||||||||||
Commitments and contingencies | 21 | — | — | |||||||||
Stockholders’ equity | ||||||||||||
Capital stock | ||||||||||||
5,000,000 preferred shares authorized and zero outstanding with a par value of $0.01 per share | ||||||||||||
100,000,000 common shares authorized 22,310,110 and 22,310,110 shares issued and outstanding with a par value of $0.01 per share | 14 | 223,101 | 223,101 | |||||||||
Additional paid-in capital | 14 | 283,526,241 | 284,100,096 | |||||||||
Retained earnings | 34,910,189 | 17,415,158 | ||||||||||
Accumulated other comprehensive (loss) | (812,206 | ) | (936,424 | ) | ||||||||
Total stockholders’ equity | 317,847,325 | 300,801,931 | ||||||||||
Total liabilities and stockholders’ equity | 634,347,123 | 692,497,010 | ||||||||||
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Consolidated Statements of Operations
For the years ended December 31, 2007 2008 and 2009
(Expressed in United States Dollars, except for share data)
December 31, | ||||||||||||||||
Note | 2007 | 2008 | 2009 | |||||||||||||
Revenues | ||||||||||||||||
Voyage revenues | 89,995,123 | 112,551,901 | 113,045,961 | |||||||||||||
Expenses | ||||||||||||||||
Voyage expenses | 18 | 5,369,546 | 6,180,754 | 10,522,573 | ||||||||||||
Vessels’ operating expenses | 18 | 25,435,578 | 32,178,385 | 38,001,481 | ||||||||||||
Dry-docking costs | 314,181 | 1,112,992 | 1,266,455 | |||||||||||||
Management fees | 3 | 4,126,610 | 4,618,025 | 5,230,990 | ||||||||||||
General and administrative expenses | 5,024,912 | 4,772,615 | 3,564,779 | |||||||||||||
Depreciation | 6 | 16,546,692 | 23,283,393 | 26,766,672 | ||||||||||||
Impairment loss | — | — | 9,867,777 | |||||||||||||
Forfeiture of vessel deposit and contract termination fees | 16,500,000 | |||||||||||||||
Charter termination fees | — | — | (753,000 | ) | ||||||||||||
Net (gain)/loss on sale of vessels | — | (1,673,321 | ) | 791,659 | ||||||||||||
Total expenses | 56,817,519 | 70,472,843 | 111,759,386 | |||||||||||||
Income from operations | 33,177,604 | 42,079,058 | 1,286,575 | |||||||||||||
Other income and (expenses) | ||||||||||||||||
Interest and finance costs | (9,831,404 | ) | (9,962,504 | ) | (9,109,222 | ) | ||||||||||
Change in fair value of derivatives | (2,573,992 | ) | (2,713,055 | ) | (5,478,163 | ) | ||||||||||
Interest income | 1,888,070 | 743,193 | 250,326 | |||||||||||||
Foreign exchange loss | (122,171 | ) | (159,208 | ) | (261,401 | ) | ||||||||||
Other expenses, net | (10,639,497 | ) | (12,091,574 | ) | (14,598,460 | ) | ||||||||||
Net Income / (Loss) | 22,538,107 | 29,987,484 | (13,311,885 | ) | ||||||||||||
Earnings / (Loss) per share | ||||||||||||||||
— Basic | 1.25 | 1.35 | (0.60 | ) | ||||||||||||
— Diluted | 1.25 | 1.34 | (0.60 | ) | ||||||||||||
Weighted average number of shares | ||||||||||||||||
—Basic | 17,900,576 | 22,130,542 | 22,219,442 | |||||||||||||
—Diluted | 17,943,346 | 22,182,118 | 22,219,442 | |||||||||||||
Cash dividends declared per share | 0.75 | 0.75 | 0.1875 | |||||||||||||
F-4
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Consolidated Statement of Changes in Stockholders’ Equity
For the years ended December 31, 2007, 2008 and 2009
(Expressed in United States Dollars, except for share data)
Capital stock | Accumulated | |||||||||||||||||||||||||||
Number of | Additional | Other | ||||||||||||||||||||||||||
Comprehensive | Shares | Amount | Paid-in Capital | Retained | Comprehensive | |||||||||||||||||||||||
Income | (Note 14) | (Note 14) | (Note 14) | Earnings | Income/(Loss) | Total | ||||||||||||||||||||||
Balance as of January 1, 2007 | 14,000,000 | 144,000 | 150,607,621 | 12,826,845 | 223,762 | 163,802,228 | ||||||||||||||||||||||
Follow-on public offering net of issuance cost | 7,200,000 | 72,000 | 121,860,958 | — | — | 121,932,958 | ||||||||||||||||||||||
Underwriters’ over-allotment option exercised net of issuance cost | 460,105 | 4,601 | 7,821,785 | — | — | 7,826,386 | ||||||||||||||||||||||
Issuance of restricted shares and and related stock based compensation | 224,000 | 2,240 | 1,322,503 | 1,324,743 | ||||||||||||||||||||||||
Dividends paid ($0.75 per share per year) | — | — | — | (13,714,540 | ) | — | (13,714,540 | ) | ||||||||||||||||||||
Net income for the year | 22,538,107 | — | — | — | 22,538,107 | — | 22,538,107 | |||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||
— Cash flow hedges: | ||||||||||||||||||||||||||||
Swap contract | (628,334 | ) | (628,334 | ) | (628,334 | ) | ||||||||||||||||||||||
Reclassification adjustment | (50,760 | ) | (50,760 | ) | (50,760 | ) | ||||||||||||||||||||||
Comprehensive income | 21,859,013 | — | — | — | — | — | — | |||||||||||||||||||||
Balance, December 31, 2007 | 22,284,105 | 222,841 | 281,612,867 | 21,650,412 | (455,332 | ) | 303,030,788 | |||||||||||||||||||||
Issuance of restricted shares and and related stock based compensation | 26,005 | 260 | 1,913,374 | 1,913,634 | ||||||||||||||||||||||||
Dividends paid ($0.75 per share per year) | — | — | — | (16,727,707 | ) | — | (16,727,707 | ) | ||||||||||||||||||||
Net income for the year | 29,987,484 | — | — | — | 29,987,484 | — | 29,987,484 | |||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||
— Cash flow hedges: | ||||||||||||||||||||||||||||
Swap contract | (347,162 | ) | (347,162 | ) | (347,162 | ) | ||||||||||||||||||||||
Reclassification adjustment | (9,712 | ) | (9,712 | ) | (9,712 | ) | ||||||||||||||||||||||
Comprehensive income | 29,630,610 | — | — | — | — | — | ||||||||||||||||||||||
Balance, December 31, 2008 | 22,310,110 | 223,101 | 283,526,241 | 34,910,189 | (812,206 | ) | 317,847,325 | |||||||||||||||||||||
Stock based compensation | 573,855 | 573,855 | ||||||||||||||||||||||||||
Dividends paid ($0.1875 per share) | — | — | — | (4,183,146 | ) | — | (4,183,146 | ) | ||||||||||||||||||||
Loss for the year | (13,311,885 | ) | — | — | — | (13,311,885 | ) | — | (13,311,885 | ) | ||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||
— Cash flow hedges: | ||||||||||||||||||||||||||||
Swap contract | 168,825 | 168,825 | 168,825 | |||||||||||||||||||||||||
Reclassification adjustment | (293,043 | ) | (293,043 | ) | (293,043 | ) | ||||||||||||||||||||||
Comprehensive income | (13,436,103 | ) | — | — | — | — | — | |||||||||||||||||||||
Balance, December 31, 2009 | 22,310,110 | 223,101 | 284,100,096 | 17,415,158 | (936,424 | ) | 300,801,931 |
F-5
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Consolidated Statements of Cash Flows
For the years ended December 31, 2007 2008 and 2009
(Expressed in United States Dollars)
December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income / (loss) for the year | 22,538,107 | 29,987,484 | (13,311,885 | ) | ||||||||
Items included in net income not affecting cash flows: | ||||||||||||
Depreciation and amortization of deferred finance charges | 16,621,400 | 23,388,379 | 26,969,442 | |||||||||
Amortization of fair value of time charter | (1,377,146 | ) | (1,005,865 | ) | (181,552 | ) | ||||||
Forfeiture of vessel deposit and contract termination fees | — | — | 16,500,000 | |||||||||
Share based compensation | 1,324,743 | 1,913,634 | 573,855 | |||||||||
Change in fair value of derivatives | 2,573,992 | 1,467,113 | 1,454,894 | |||||||||
Impairment loss | — | — | 9,867,777 | |||||||||
(Gain)/loss on sale of vessels | (1,673,321 | ) | 791,659 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase)/decrease in | ||||||||||||
Trade and other receivables | (1,252,630 | ) | (222,382 | ) | 716,483 | |||||||
Claims receivable | (26,041 | ) | (561,236 | ) | (642,259 | ) | ||||||
Inventories | (89,491 | ) | (417,777 | ) | (892,777 | ) | ||||||
Advances and prepayments | 57,451 | (599,735 | ) | 186,784 | ||||||||
Increase/(decrease) in | ||||||||||||
Payable to related party | 5,648,235 | (5,439,314 | ) | 4,902,720 | ||||||||
Trade accounts payable | 1,356,965 | (150,246 | ) | 967,373 | ||||||||
Other accrued liabilities | (753,460 | ) | 590,069 | 1,577,225 | ||||||||
Deferred income | 1,082,372 | 803,989 | (1,132,396 | ) | ||||||||
Net cash provided by operating activities | 47,704,497 | 48,080,792 | 48,347,343 | |||||||||
Cash flows from investing activities | ||||||||||||
Insurance proceeds | 269,893 | — | 755,713 | |||||||||
Advances for vessel under construction and acquisitions | (12,450,000 | ) | (23,009,597 | ) | (11,976,308 | ) | ||||||
Proceeds from sale of vessels, net | — | 26,883,889 | 11,669,374 | |||||||||
Acquisition of vessels | (133,846,574 | ) | (167,509,111 | ) | (100,335,745 | ) | ||||||
Decrease/(increase) in restricted cash account | (3,609,934 | ) | 3,654,833 | (1,676,749 | ) | |||||||
Net cash used in investing activities | (149,636,615 | ) | (159,979,986 | ) | (101,563,715 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Capital stock | 76,601 | — | — | |||||||||
Follow-on offering | 129,528,000 | — | — | |||||||||
Underwriters’ over allotment option exercised | 8,277,289 | — | — | |||||||||
Stock Issuance costs | (8,122,546 | ) | — | — | ||||||||
Dividends paid | (13,714,540 | ) | (16,727,707 | ) | (4,183,146 | ) | ||||||
Deferred finance charges | (145,795 | ) | (304,549 | ) | (1,119,300 | ) | ||||||
Customer deposits | 3,190,821 | (270,707 | ) | (1,381,099 | ) | |||||||
Loan repayment | (48,757,211 | ) | (23,866,656 | ) | (26,021,803 | ) | ||||||
Proceeds from short-term bridge facility | 26,500,000 | — | — | |||||||||
Proceeds from long-term debt | 27,067,500 | 161,802,000 | 88,150,000 | |||||||||
Net cash provided by financing activities | 123,900,119 | 120,632,381 | 55,444,652 | |||||||||
Net increase in cash and cash equivalents | 21,968,001 | 8,733,187 | 2,228,280 | |||||||||
Cash and cash equivalents at beginning of year | 11,146,871 | 33,114,872 | 41,848,059 | |||||||||
Cash and cash equivalents at end of year | 33,114,872 | 41,848,059 | 44,076,339 | |||||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the year for interest, net of amounts capitalized | 9,329,123 | 10,743,998 | 8,716,032 | |||||||||
Non cash items: | ||||||||||||
Fair value of below market acquired time charter | 1,572,000 | — | — | |||||||||
F-6
Table of Contents
(Expressed in United States Dollars)
Acquisition / | ||||||||||
Name of Company | Vessel Name | Disposition Date | cbm | |||||||
1. | VCM Trading Ltd. | Ming Long | October 12, 2004 | 3,515.55 | ||||||
2. | Gaz De Brazil Inc. | Gas Prodigy | October 15, 2004 | 3,014.59 | ||||||
3. | LPGONE Ltd. | Gas Tiny | October 29, 2004 | 1,319.96 | ||||||
4. | Geneve Butane Inc. | Gas Courchevel | November 24, 2004 | 4,102.00 | ||||||
5. | Matrix Gas Trading Ltd. | Gas Shanghai | December 7, 2004 | 3,525.92 | ||||||
6. | Pacific Gases Ltd. | Gas Emperor | February 2, 2005 | 5,009.07 | ||||||
7. | Semichlaus Exports Ltd. | Gas Ice | April 7, 2005 | 3,434.08 | ||||||
8. | Ventspils Gases Ltd. | Gas Arctic | April 7, 2005 | 3,434.08 | ||||||
9. | Industrial Materials Inc. | Gas Texiana | April 11, 2005 | 5,013.33 | ||||||
Independent Trader Ltd. | Gas Oracle | April 26, 2005 | 3,014.59 | |||||||
(sold on January 28, 2008) | ||||||||||
10. | Aracruz Trading Ltd. | Gas Amazon | May 19, 2005 | 6,562.41 | ||||||
11. | Continent Gas Inc. | Gas Chios | May 20, 2005 | 6,562.09 | ||||||
12. | Empire Spirit Ltd. | Gas Monarch | May 31, 2005 | 5,018.35 | ||||||
13. | Jungle Investment Limited | Gas Cathar | July 27, 2005 | 7,517.18 | ||||||
14. | Northern Yield Shipping Ltd. | Gas Legacy | October 27, 2005 | 3,500.00 | ||||||
15. | Triathlon Inc. | Gas Marathon | November 2, 2005 | 6,572.20 | ||||||
16. | Iceland Ltd. | Gas Crystal | November 11, 2005 | 3,211.04 | ||||||
17. | Soleil Trust Inc. | Gas Sincerity | November 14, 2005 | 4,128.98 | ||||||
18. | East Propane Inc. | Catterick | November 24, 2005 | 5,001.41 | ||||||
19. | Petchem Trading Inc. | Gas Spirit | December 16, 2005 | 4,112.18 | ||||||
Malibu Gas Inc. | Feisty Gas* | December 16, 2005 | 4,111.24 | |||||||
20. | Balkan Holding Inc. | Gas Czar | February 14, 2006 | 3,509.65 | ||||||
Transgalaxy Inc. | Gas Fortune | February 24, 2006 | 3,512.78 | |||||||
(sold on December 9, 2009) | ||||||||||
21. | International Gases Inc | Gas Zael* | April 03, 2006 | 4,111.24 | ||||||
22. | Balkan Profit Ltd | Gas Eternity | March 09, 2006 | 3,528.21 | ||||||
23. | Oxfordgas Inc. | Lyne | May 19, 2006 | 5,013.90 | ||||||
24. | Energetic Peninsula Limited | Sir Ivor | May 26, 2006 | 5,000.00 | ||||||
Ocean Blue Limited | Gas Nemesis | June 15, 2006 | 5,016.05 | |||||||
(sold on January 29, 2008) | ||||||||||
25. | Baroness Holdings Inc. | Gas Pasha | June 30, 2006 | 3,244.04 | ||||||
26. | Evolution Crude Inc. | Gas Flawless | February 1, 2007 | 6,300.00 | ||||||
27. | Aura Gas Inc. | Sea Bird II | May 18, 2007 | 3,518.00 | ||||||
European Energy Inc. | Gas Renovatio | May 29, 2007 | 3,312.50 | |||||||
(sold on March 19, 2008) | ||||||||||
28. | Fighter Gas Inc. | Gas Icon | June 27, 2007 | 5,000.00 | ||||||
29. | Luckyboy Inc. | Chiltern | June 28, 2007 | 3,312.00 |
F-7
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
1. | Basis of Presentation and General Information — Continued |
Acquisition / | ||||||||||
Name of Company | Vessel Name | Disposition Date | cbm | |||||||
30. | Italia Trades Inc. | Gas Evoluzione | July 23, 2007 | 3,517.00 | ||||||
31. | Studio City Inc. | Gas Kalogeros | July 27, 2007 | 5,000.00 | ||||||
32. | Gastech Inc. | Gas Sikousis | August 03, 2007 | 3,500.00 | ||||||
Espace Inc. | Gas Sophie | October 15, 2007 | 3,500.00 | |||||||
(sold on June 10, 2009) | ||||||||||
33. | Cannes View Inc. | Gas Haralambos | October 30, 2007 | 7,000.00 | ||||||
34. | Ecstasea Inc. | Gas Premiership | March 19, 2008 | 7,200.00 | ||||||
35. | Spacegas Inc. | Gas Defiance | August 1, 2008 | 5,000.00 | ||||||
36. | Financial Power Inc. | Gas Shuriken | November 3, 2008 | 5,000.00 | ||||||
37. | Tankpunk Inc. | Gas Natalie | January 22, 2009 | 3,213.92 | ||||||
38. | Sound Effex Inc. | Gas Astrid | April 16, 2009 | 3,500.00 | ||||||
39. | Revolution Inc. | Gas Exelero | June 30, 2009 | 3,500.00 | ||||||
Name of Company | Vessel Name | To be delivered on | cbm | |||||||
Pelorus Inc. | Hull K 421 | July 2011 | 5,000.00 | |||||||
Rising Sun Inc. | Hull K 422 | February 2011 | 5,000.00 | |||||||
Carinthia Inc. | Hull K 423 | March 2011 | 5,000.00 | |||||||
Tatoosh Beauty Inc. | Hull K 424 | May 2012 | 7,500.00 | |||||||
Octopus Gas Inc. | Hull K 425 | November 2011 | 7,500.00 | |||||||
M.R. type product carriers | ||||||||||
Name of Company | Vessel Name | Acquisition Date | dwt | |||||||
40. | Clean Power Inc. | Navig8 Fidelity | January 9, 2008 | 46,754.29 | ||||||
41. | MR Roi Inc. | Navig8 Faith | February 27, 2008 | 46,754.29 | ||||||
42. | King of Hearts Inc. | Alpine Endurance | July 14, 2009 | 47,000.00 | ||||||
Name of Company | Vessel Name | Cancelled on | dwt | |||||||
Castell Castle Inc. | Stealth Argentina | December 18, 2009 | 50,500.00 |
* | On April 3, 2006, the “Feisty Gas” was delivered to International Gases Inc., subsidiary of StealthGas Inc., and renamed to “Gas Zael”. |
Year ended December 31, | ||||||||||||
Charterer | 2007 | 2008 | 2009 | |||||||||
A | 27 | % | 22 | % | 17 | % | ||||||
B | 21 | % | 21 | % | 15 | % | ||||||
C | 20 | % | 20 | % | 13 | % | ||||||
D | — | — | 10 | % |
F-8
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-9
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-10
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-11
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-12
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-13
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-14
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-15
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
December 31, | ||||||||
2008 | 2009 | |||||||
Bunkers | 384,481 | 956,903 | ||||||
Lubricants | 869,661 | 1,190,016 | ||||||
Total | 1,254,142 | 2,146,919 | ||||||
Balance, December 31, 2007 | 12,450,000 | |||
Advances for vessels acquisitions | 11,500,000 | |||
Advances for vessels under construction | 11,120,002 | |||
Capitalized interest | 389,595 | |||
Vessels delivered | (12,450,000 | ) | ||
Balance, December 31, 2008 | 23,009,597 | |||
Advances for vessels under construction | 11,375,989 | |||
Capitalized interest | 600,319 | |||
Vessel delivered | (5,750,000 | ) | ||
Forfeiture of vessel deposit | (5,750,000 | ) | ||
Balance, December 31, 2009 | 23,485,905 | |||
F-16
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Accumulated | ||||||||||||
Vessel cost | Depreciation | Net Book Value | ||||||||||
Balance, December 31, 2007 | 428,842,324 | (33,747,002 | ) | 395,095,322 | ||||||||
Acquisitions | 179,959,111 | — | 179,959,111 | |||||||||
Depreciation for the year | — | (23,283,393 | ) | (23,283,393 | ) | |||||||
Balance, December 31, 2008 | 608,801,435 | (57,030,395 | ) | 551,771,040 | ||||||||
Acquisitions | 106,085,745 | — | 106,085,745 | |||||||||
Held for sale | (16,271,256 | ) | 2,441,744 | (13,829,512 | ) | |||||||
Disposals | (14,741,063 | ) | 2,280,030 | (12,461,033 | ) | |||||||
Impairment loss | (9,867,777 | ) | — | (9,867,777 | ) | |||||||
Depreciation for the year | — | (26,766,672 | ) | (26,766,672 | ) | |||||||
Balance, December 31, 2009 | 674,007,084 | (79,075,293 | ) | 594,931,791 | ||||||||
F-17
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
December 31, | ||||||||
2008 | 2009 | |||||||
Interest on long-term debt | 1,875,515 | 1,358,831 | ||||||
Administrating expenses | 202,904 | 377,588 | ||||||
Vessels’ operating and voyage expenses | 2,439,678 | 4,358,903 | ||||||
Total | 4,518,097 | 6,095,322 | ||||||
F-18
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Amortization | Amortization | |||||||||||||||||||||||||||||||||||
Fair | Unamortized | Unamortized | for the year | Unamortized | for the year | Unamortized | ||||||||||||||||||||||||||||||
value of Acquired | balance as at | Amortization for | balance as at | ended | balance as at | Ended | balance as at | |||||||||||||||||||||||||||||
End of Time | Time | December | the year ended | December | December | December | December | December | ||||||||||||||||||||||||||||
Vessel | Charter | Charter | 31, 2006 | December 31, 2007 | 31, 2007 | 31, 2008 | 31, 2008 | 31, 2009 | 31, 2009 | |||||||||||||||||||||||||||
Fair value of acquired time charter — Asset | ||||||||||||||||||||||||||||||||||||
Catterick | January 2007 | (421,000 | ) | 397,282 | 23,718 | — | — | — | — | — | ||||||||||||||||||||||||||
Total | (421,000 | ) | 397,282 | 23,718 | — | — | — | — | — | |||||||||||||||||||||||||||
Fair value of acquired time charter — Liability | ||||||||||||||||||||||||||||||||||||
Sir Ivor | April 2009 | 479,000 | (98,406 | ) | (164,010 | ) | 216,584 | (164,459 | ) | 52,125 | (52,125 | ) | — | |||||||||||||||||||||||
Lyne | April 2009 | 483,000 | (101,732 | ) | (164,303 | ) | 216,965 | (164,751 | ) | 52,214 | (52,214 | ) | — | |||||||||||||||||||||||
Gas Pasha | June 2008 | 340,000 | (85,581 | ) | (169,767 | ) | 84,652 | (84,652 | ) | — | — | — | ||||||||||||||||||||||||
Sea Bird II | May 2009 | 409,000 | (127,008 | ) | 281,992 | (204,779 | ) | 77,213 | (77,213 | ) | — | |||||||||||||||||||||||||
Gas Renovatio | January 2008 | 310,000 | (271,093 | ) | 38,907 | (38,907 | ) | — | — | — | ||||||||||||||||||||||||||
Chiltern | March 2008 | 300,000 | (201,444 | ) | 98,556 | (98,556 | ) | — | — | — | ||||||||||||||||||||||||||
Gas Kalogeros | May 2008 | 411,000 | (231,280 | ) | 179,720 | (179,720 | ) | — | — | — | ||||||||||||||||||||||||||
Gas Sikousis | May 2008 | 142,000 | (71,959 | ) | 70,041 | (70,041 | ) | — | — | — | ||||||||||||||||||||||||||
Total | 2,874,000 | (285,719 | ) | (1,400,864 | ) | 1,187,417 | (1,005,865 | ) | 181,552 | (181,552 | ) | — | ||||||||||||||||||||||||
2,453,000 | 111,563 | (1,377,146 | ) | 1,187,417 | (1,005,865 | ) | 181,552 | (181,552 | ) | — | ||||||||||||||||||||||||||
F-19
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
December 31, | Movement in 2009 | December 31, | ||||||||||||||
2008 | Additions | Repayments | 2009 | |||||||||||||
Fortis Bank | 56,635,280 | — | (5,921,680 | ) | 50,713,600 | |||||||||||
DnB Nor Bank | 80,139,579 | — | (8,547,208 | ) | 71,592,371 | |||||||||||
Scotia Bank | 45,867,014 | — | (3,755,500 | ) | 42,111,514 | |||||||||||
Deutsche Bank | 38,375,000 | — | (2,500,000 | ) | 35,875,000 | |||||||||||
National Bank of Greece | 33,240,000 | — | (1,939,000 | ) | 31,301,000 | |||||||||||
Emporiki Bank | 29,437,000 | — | (1,717,166 | ) | 27,719,834 | |||||||||||
DVB Bank | — | 32,200,000 | (1,041,249 | ) | 31,158,751 | |||||||||||
NIBC | — | 26,700,000 | — | 26,700,000 | ||||||||||||
EFG Eurobank | — | 29,250,000 | (600,000 | ) | 28,650,000 | |||||||||||
Total | 283,693,873 | 88,150,000 | (26,021,803 | ) | 345,822,070 | |||||||||||
F-20
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-21
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-22
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-23
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-24
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-25
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
December 31, | Amount | |||
2010 | 36,166,988 | |||
2011 | 30,822,022 | |||
2012 | 29,895,588 | |||
2013 | 29,125,588 | |||
2014 | 60,837,179 | |||
Thereafter | 158,974,705 | |||
Total | 345,822,070 | |||
F-26
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
December 31, 2008 | December 31, 2009 | |||||||||||||||||||
Derivatives not designated as hedging | Asset | Liability | Asset | Liability | ||||||||||||||||
instruments | Balance Sheet Location | Derivatives | Derivatives | Derivatives | Derivatives | |||||||||||||||
Foreign Currency Contract | Current assets - Fair value of derivatives | 1,938,480 | — | 1,774,515 | — | |||||||||||||||
Foreign Currency Contract | Non current assets - Fair value of derivatives | 5,711,523 | — | 1,861,189 | — | |||||||||||||||
Interest Rate Swap Agreements | Non current liabilities - Fair value of derivatives | — | 12,762,979 | — | 10,327,792 | |||||||||||||||
Total derivatives not designated as hedging instruments | 7,650,003 | 12,762,979 | 3,635,704 | 10,327,792 | ||||||||||||||||
Total derivatives | 7,650,003 | 12,762,979 | 3,635,704 | 10,327,792 | ||||||||||||||||
F-27
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
December 31, 2008 | December 31, 2009 | |||||||
Derivatives designated as hedging instruments | Amount of Gain / (Loss) Recognized in OCL on Derivative (Effective Portion) | |||||||
Interest Rate Swap Agreement | (356,874 | ) | (124,218 | ) | ||||
Derivatives designated as hedging instruments | December 31, 2008 | December 31, 2009 | ||||||||||
Location of Gain / (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) | Amount of Gain / (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) | |||||||||||
Interest Rate Swap Agreement | Change in fair value of derivatives | 203,699 | 484,369 | |||||||||
Location of Gain / (Loss) Recognized in Income on Derivative (Ineffective Portion) | Amount of Gain / (Loss) Recognized in Income on Derivative (Ineffective Portion) | |||||||||||
Interest Rate Swap Agreement | Change in fair value of derivatives | (193,987 | ) | (191,325 | ) | |||||||
Derivatives not designated as hedging instruments | Location of Gain / (Loss) Recognized | |||||||||||
Interest Rate Swap - - Fair Value | Change in fair value of derivatives | (9,126,828 | ) | 2,266,362 | ||||||||
Interest Rate Swap - - Realized loss | Change in fair value of derivatives | (1,245,942 | ) | (4,023,270 | ) | |||||||
Foreign Currency Contract — Fair Value | Change in fair value of derivatives | 7,650,003 | (4,014,299 | ) | ||||||||
Total loss on derivatives not designated as hedging instruments | (2,722,767 | ) | (5,771,207 | ) | ||||||||
Total loss on derivatives | (2,713,055 | ) | (5,478,163 | ) | ||||||||
F-28
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Fair Value as of | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||
Description | December 31, 2009 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets/(Liabilities): | ||||||||||||||||
Foreign Currency Contract | 3,635,704 | — | 1,774,515 | 1,861,189 | ||||||||||||
Interest Rate Swap Agreements | (10,327,792 | ) | — | (10,327,792 | ) | — | ||||||||||
Total | (6,692,088 | ) | — | (8,553,277 | ) | 1,861,189 | ||||||||||
F-29
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Fair Value Measurements Using Significant Unobservable Inputs | ||||
(Level 3) | ||||
Foreign Currency Contract | ||||
Balance, January 1, 2009 | 6,514,523 | |||
Total unrealized (losses) | ||||
Included in earnings | (4,653,334 | ) | ||
Balance, December 31, 2009 | 1,861,189 | |||
The amount of total (losses) for the period included in earnings attributable to the change in unrealized (losses) relating to assets still held at the reporting date | (4,653,334 | ) | ||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | ||||||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||||||
Fair Value as of | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||||||
Description | December 31, 2009 | (Level 1) | (Level 2) | (Level 3) | (Losses) | |||||||||||||||
Vessels and vessels held for sale | 25,728,913 | — | 25,728,913 | (9,867,777 | ) | |||||||||||||||
Total | 25,728,913 | — | 25,728,913 | — | (9,867,777 | ) | ||||||||||||||
F-30
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
F-31
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Weighted average | ||||||||
grant date fair | ||||||||
Number of | value per | |||||||
restricted shares | non-vested share | |||||||
Non-vested, January 1, 2009 | 113,005 | 15.69 | ||||||
Granted | — | — | ||||||
Vested | (71,003 | ) | 15.98 | |||||
Forfeited | — | — | ||||||
Non-vested, December 31, 2009 | 42,002 | 15.20 | ||||||
F-32
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Year ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Numerator | ||||||||||||
Net income/(loss) | 22,538,107 | 29,987,484 | (13,311,885 | ) | ||||||||
Less: Dividends declared and undistributed Earnings allocated to non-vested shares | (114,899 | ) | (217,727 | ) | — | |||||||
Net income/(loss) attributable to common shareholders, basic | 22,423,208 | 29,769,757 | (13,311,885 | ) | ||||||||
Denominator | ||||||||||||
Basic Weighted average shares — outstanding | 17,900,576 | 22,130,542 | 22,219,442 | |||||||||
Effect on dilutive securities: | ||||||||||||
Non-vested restricted shares | 42,770 | 51,576 | — | |||||||||
Diluted Weighted average shares — outstanding | 17,943,346 | 22,182,118 | 22,219,442 | |||||||||
Basic earnings /(loss) per share | 1.25 | 1.35 | (0.60 | ) | ||||||||
Diluted earnings /(loss) per share | 1.25 | 1.34 | (0.60 | ) | ||||||||
F-33
Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Year ended December 31, | ||||||||||||
Voyage Expenses | 2007 | 2008 | 2009 | |||||||||
Port expenses | 1,227,235 | 773,058 | 2,015,814 | |||||||||
Bunkers | 1,546,050 | 2,265,062 | 5,065,204 | |||||||||
Commissions charged by third parties | 1,397,945 | 1,598,447 | 1,731,276 | |||||||||
Commissions charged by related party | 1,096,426 | 1,385,767 | 1,418,024 | |||||||||
Other voyage expenses | 101,890 | 158,420 | 292,255 | |||||||||
Total | 5,369,546 | 6,180,754 | 10,522,573 | |||||||||
Year ended December 31, | ||||||||||||
Vessels’ Operating Expenses | 2007 | 2008 | 2009 | |||||||||
Crew wages and related costs | 14,009,471 | 19,227,571 | 23,706,087 | |||||||||
Insurance | 1,561,173 | 1,497,568 | 1,696,571 | |||||||||
Repairs and maintenance | 3,386,081 | 4,104,822 | 4,574,386 | |||||||||
Spares and consumable stores | 4,185,461 | 4,967,128 | 5,641,944 | |||||||||
Miscellaneous expenses | 2,293,392 | 2,381,296 | 2,382,493 | |||||||||
Total | 25,435,578 | 32,178,385 | 38,001,481 | |||||||||
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Notes to the consolidated financial statements
(Expressed in United States Dollars)
• | From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any such claims or contingent liabilities which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. |
• | In January 2005, the Company entered into a three-year cancelable operating lease for its office facilities that terminated in January 2008. In January 2008, the Company entered into a new two-year cancelable operating lease for its office facilities that terminated in January 2010. In January 2010, the Company entered into a new two-year cancelable operating lease for its office facilities that terminates in January 2012. Rental expense for the years ended December 31, 2007, 2008 and 2009 was $33,388, $48,201 and $45,102, respectively. In October 2005, the Company entered into a three-year cancelable operating lease for an armored car that terminated in October 2008. In October 2008 the Company entered into a new three-year cancelable operating lease for an armored car that terminates in October 2011. Rental expense for the years ended December 31, 2007, 2008 and 2009 was $46,642, $50,016 and $47,955 and are recorded in the consolidated statements of operations under the caption “General and administrative expenses”. | ||
Future rental commitments were payable as follows: |
December 31, | Office Lease | Car Rent | Total | |||||||||||
2010 | 60,488 | 49,255 | 109,743 | |||||||||||
2011 | 60,488 | 41,046 | 101,534 | |||||||||||
120,976 | 90,301 | 211,277 | ||||||||||||
• | As described in Note 5, as of December 31, 2009 the Company has long-term outstandings commitments for installment payments for five vessels under construction, as follows: |
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Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
Year ended | Shipbuilding Contracts | |||
2010 | 14,216,631 | |||
2011 | 68,734,683 | |||
2012 | 21,205,681 | |||
Total | 104,156,995 | |||
As of December 31, 2009, the Company’s long term obligations due under the shipbuilding contracts with Mitsubishi Corporation of Japan totaled to JPY9,606,400,000 were converted to US Dollars based upon the foreign currency forward contracts entered into by the Company and the prevailing USD/JPY exchange rate as at December 31, 2009. The total obligation under these contracts was $104,156,995. |
Based upon the above the prevailing USD/JPY exchange rate used for the calculation of the total obligation was 92.23 JPY to $1. |
• | Future minimum contractual charter revenue, based on vessels committed to noncancelable, long-term time and bareboat charter contracts as of December 31, 2009, will be $62,575,271 during 2010, $28,045,200 during 2011, $17,278,684 during 2012, $11,678,200 during 2013 and $11,198,200 during 2014. These amounts do not include any assumed off-hire. |
(a) | On January 15, 2010, the Company sold the vessel “Gas Natalie”. The Company had previously recorded an impairment charge of $3,616,878 to write down the carrying amount of this vessel to fair market value less costs to sell and this was included in the Company’s consolidated statement of operations in the fourth quarter of 2009. |
(b) | On January 26, 2010, the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Prophet” to an unaffiliated third party for $6,800,000. The vessel was delivered to her new owners on March 16, 2010 and the Company realized a gain from the sale of this vessel of $11,118 which was included in the Company’s consolidated statement of income in the first quarter of 2010. The Company had previously recorded an impairment charge of $160,237 to write down the carrying amount of the vessel to fair market value less costs to sell and was included in the Company’s consolidated statement of operations in the fourth quarter of 2009. |
(c) | On February 18, 2010, the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Texiana” to an unaffiliated third party for $11,180,000. The vessel was delivered to her new owners on April 6, 2010 and the Company realized a gain from the sale of this vessel of $1,048,415 which will be included in the Company’s consolidated statement of income in the second quarter of 2010. |
(d) | On February 26, 2010, before the delivery of “Gas Prophet” to her new owners, the Company prepaid $3,756,563 of the then outstanding amount of the Fortis-Athens loan. |
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Table of Contents
Notes to the consolidated financial statements
(Expressed in United States Dollars)
(e) | On March 3, 2010, before the delivery of “Gas Texiana” to her new owners, the Company prepaid $6,091,665 of the then outstanding amount of the Fortis-Athens loan. |
(f) | On March 9, 2010, before the delivery of “Gas Eternity” to her new owners, the Company prepaid $4,554,270 of the then outstanding amount of the DnB loan. |
(g) | On March 22, 2010, the Company’s Board of Directors adopted a new stock repurchase plan for up to $15,000,000 to be used for repurchasing the Company’s common shares. All repurchased common shares shall be cancelled and removed from the Company’s capital stock. As of June 18, 2010, the Company had completed the repurchase of 1,205,229 shares. |
(h) | On March 26, 2010, the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Prodigy” to an unaffiliated third party for $6,050,000. The vessel was delivered to her new owners on April 9, 2010. The Company had previously recorded an impairment charge of $83,852 to write down the carrying amount of the vessel to fair market value less costs to sell which was included in the Company’s consolidated statement of income in the first quarter of 2010. |
(i) | On June 4, 2010, the Company entered into a memorandum of agreement to acquire from an affiliated entity an under construction Aframax crude oil tanker named “Spike” (formerly “Hull No 1757”) which is scheduled to be delivered in the third quarter of 2010. The purchase price of this vessel is $56,500,000. As provided by the relate memorandum of agreement, no advance payment will be given. |
(j) | On June 8, 2010, the Company signed a commitment letter with the DnB NOR Bank to partially finance the acquisition of an under construction Aframax tanker named “Spike” (formerly “Hull No 1757”), by one of the Company’s wholly owned subsidiary and secured by the Gas Zael, a vessel already owned by a Company’s wholly owned subsidiary. The senior secured term loan facility comprised of two tranches aggregating up to $45,000,000. The one tranche will be the lesser of the amount of $40,000,000 or 70% of the under construction tanker market value at the time of delivery and the second tranche will be the lesser of the amount of $5,000,000 or 50% of Gas Zael’s market value at the same time. The senior secured term loan will be fully drawn down in a single tranche no later than September 15, 2010 and will be repayable in twenty four consecutive quarterly installments of $850,000 each plus a balloon payment of $24,600,000 payable together with the last installment. The term loan charges interest at LIBOR plus 2.40% and is secured by a first priority mortgage over the vessels involved and cross-collateralized with security vessels under the “DnB Loan” plus the assignment of the vessel’s insurances, earnings and the vessel’s operating and retention account, and the guarantee of StealthGas Inc. |
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