Good day and welcome to the StealthGas Incorporated, first quarter 2009 financial results conference call. For your information, today’s conference is being recorded. At this time, I’d like to turn the call over to your host today, Mr. Harry Vafias, President and Chief Executive Officer. Please go ahead sir.

Thank you and good morning everyone. Welcome to our conference call and webcast to discuss the results for the first quarter ended March 31, ‘09. I’m Harry Vafias, the CEO of StealthGas and I would like to remind you please, that we will be discussing forward-looking statements in today’s conference call and presentation. Regarding the Safe Harbor language, I would like to refer you to slide one of this presentation, as well as to our press release and our first quarter ’09 results. With me today is Andrew Simmons, our CFO and if you need any further information on this conference call or presentation, please contact Andrew or myself. Starting from slide number two, we continue our business strategy despite the uncertainties presented by the world economy today and I would like to highlight how we continued with this implementation in the first quarter of ’09 and later to discuss the outlook for the remainder of this year and the decision we took today for the time being to spend the payment of our dividend. Our primary objective continues to run highly efficient in modern fleet; on secure deployment contracts with first class charters, that serves a very specific niche market that has no correlation whatsoever to most of our shipping segments, and are expensing significant downturns in both charter levels and vessel values. At the end of March ’09, our fleet numbered 41 vessels, 39 handysize LPG’s and two medium range product tankers. We’re also contracted to delivery two more product tankers, one in May and one in November of this year. Our second goal has been to maintain moderate leverage at all times, despite the new five fold increase, the size of the company since October ’05. After taking into consideration of the total fleet of 41 ships…

Thank you, Harry. Good morning everybody. Now with slide number five, we turn to the financial highlights for the first quarter of 2009. With an average of 40.8 vessels owned and operated in this quarter, we realized net income of $200,000 on voyage revenues of $29.2 million and produced an EBITDA of $8.6 million. For the first quarter of ’09, we reported a loss of $7.3 million on interest rate swap and currency hedging arrangements, which included an unrealized non-cash loss of approximately $6.2 million and a realized cash loss of approximately $1 million, plus a non-cash provision of approximately $200,000 for restricted stock portion of deferred stock based compensation. Excluding these non-cash items, net income would have been $6.6 million or $0.30 per share. Our earnings per share for the first quarter ’09 including non-cash items was $0.01 per share, calculated on $22.2 million average shares outstanding. Our net debt to capitalization stood at 42.3% at the end of Q1 ’09. We believe in maintaining our leverage of moderate levels that’s important, particularly in the challenging environment which we currently operating; plus by comparison it is moderate when we take into account our period employment coverage and in comparison generally to the majority of quoted shipping companies. It will also allow us to continue to prudently grow our fleet over the next four year period. We now turn to slide number six. This slide provides you with an overview of the development of our income statement for five consecutive quarters. In comparing our results from the first quarter of 2008 to the first quarter of 2009, revenues have increased by 8.1%. EBITDA has declined by 40.8% or otherwise reduced to 33.1%, if we exclude the one-off gain in Q1 of ’08, for the profit on the sale of three…

Moving onto slide 10; this slide shows the highly volatile freight markets for the very large gas carriers over the past seven years; plus the freight rate for the middle size and the large size gas ships. In comparison, the middle size and smaller semi or fully pressurized ships, our core sector, have experienced a much lower volatility and study growth in freight earnings from mid ’05 onwards. Although, over the past month since the economic crisis became a reality, there has been a lessening activity, particular in the longer time charter market, as we believe charters as we have already discussed, are holding back on fixed investments long term due to the global uncertainty. However, it’s clear from this data, that our type of ships which form the core of our business, that have probably moved from dry, wet or the containing markets have over the past seven years not experienced the wild fluctuation in rates that these other shipping segments have seen and we’re hoping that despite the world economic outlook, that this relatively non-volatile trading patter will continue to remain intact. We continue to expect that the supply of product will increase in the next two to three years, plus demand is expected to continue to be buoyant, particularly in the far east and developing world. Therefore we continue to believe that the outlook for our core sector is encouraging and thus we will continue with the development of our fleet, to take advantage of this expected outlook as it becomes a reality. Slide 11, this slide indicates the freight rate evolution for 12 month time charters for our market. The figures are based on independent estimates by Lorentzen & Stemoco. As you can see highlighted in yellow, the segment is characterized by relative stability and rates…

(Operator Instructions) Your first question comes from Natasha Boyden - Cantor Fitzgerald.

You’ve mentioned in your release, asset values have held up better in the gas carrier market than other shipping sectors; can you perhaps provide some details, maybe in the percentage of how the assets values have declined in your sector, maybe vis-à-vis perhaps the other sectors? Then perhaps can you talk about, has SMP activity improved at all in the LPG carrier market or is it still pretty much sort of dead on arrival as you’ve mentioned in the past?

The price drops on the other segments; you know them a better than I do, so I will not comment on that. The price drops for our ships; I’ll give you an example. A resale 5,000 CBM Japanese vessel was $23 million to $23.5 million one and a half year ago and today is in the region of $20.5 million to $21 million. So, you can get an idea from that. What was the second part? No, they virtually non-existent, you can know the reasons again and the reason is, that excluding the big players on the gas arms of the big oil corporations, the smaller buyers, those ships do not have finance and thus they find it very difficult to pay up $10 million and $15 million and $20 million cash to buy one ship. So, this thing will change very soon, unless the banks start re-lending money, which everybody needs.

So, let’s look at perhaps then with the dividend suspension that you’ve done. It’s obviously going to give you an extra $16 million, $17 million in cash and you’ve obviously moved into buying product tankers and that perhaps may not the best sector now going forward, given the problems that the product tanker sector is having. So, what is your strategy going forward? Where do you think it’s the most attractive area for you to grow into right now or do you just think it’s prudent for you to kind of bring things in and sit on your cash and just sit there and wait for things to get faster? Can you just tell us, what is your strategy at this point?

We’ll take the interest charges that exist. Firstly, I don’t thing it’s the right time to buy anyway. So even if we have a bundle of money, we would still not buy, so that’s number one. Number two, anyway we will shift on the cash. Wait and see; I think there are going to be very interesting opportunities from September onwards. I don’t think there are going to be very interesting opportunities on the gas side for the reasons explained, because the freight rates have not collapsed and secondly, the values have not collapsed. So, when and if we think it’s the time to buy, we will probably not buy gas carriers and we will buy something else. Now what this is going to be depends on what will happen in the next six to nine months.

Can we assume that you’re probably not going to expand any further into the product sector; will that be a reasonable assumption?

No, I wouldn’t say that, because product tanker prices have dropped considerably and if you’re likely enough to find a relatively good charter, then it’s not too bad of an idea.

The order book doesn’t scare you there?

Yes, its scares you a bit, but if you think that if you succeed in having a three to five year charter, then the order book will reward you five years down the line and I don’t think we’ll be avoid too much five years down the line, because of a lot of order cancellations, because of a lot of order postponements and because of hopefully more scrapping on the tanker side.

Okay. Then moving on to a new bills, how are your new builds currently right now, tracked to be delivered on time?

Which new billings, the product tankers or the LPG’s? Product tankers, I think we’ve already discussed that. One will be delivered this month or the next and the other one is end of the year and LPG’s obviously is on time since we delayed anyway, so it’s already on time anyway.

Right, but the ones at the end of this year is scheduled to be coming in on time?

The product tanker you mean?

Yes

From what we know, yes. Now it’s time we have fill it, obviously we will discuss. I want stress that especially these products tankers which are expensive ships, have already been financed, so no worries about how we’re going to pay from them.

Your next question comes from Mike Drickamer - Morgan, Keegan

Andrew, can you remind me what your cash payments are for the reminder of the ships to be delivered, when they’re expected to be paid?

Yes. We have as Harry just said, the Stealth SV coming in May, which we owe around about $52 million on that ship, which is as Harry said, financed partly with the remainder in cash and partly by a committee facility from a Greek bank. Then we have $18.8 million to pay on the sister ship of the Gas Astrid in June, which again already has a committed financing on it and then the final product tanker in November of this year, where we’ll have the same amount to payout as the Stealth SV and again partly financed by cash and partly financed by a committee bank facility. Then we have no acquisitions at all in 2010 currently schedule and then the five handy LPG’s that we ordered, which now commence in February of 2011.

For the vessels for February 2011, is that a committed facility yet?

There is no facility on those vessels at the moment. It’s a bit far out, we have one or two people who have given us a sort of a very broad brushed indication, that I’d like to look at it, but you’re currently in the banking market; it’s difficult.

Harry, you have the new slide in your presentation there on the evaluation. I have my own theory, but I’d love to hear your theory as to why you think the company is trading at such a steep discount to other shipping companies?

I didn’t get your comments.

I was just wondering, what your theory is as to why your company trades at such a steep discount to your other shipping companies?

Everybody knows that Mike. It’s very simple; it’s not my theory, its everyone’s theory. The theory is firstly, market comp; secondly, a very niche market that nobody cares about; thirdly, very little volume; fourth, very little fluctuation in day rates, so borrowing stock. I don’t know; probably that’s it.

So, then what are you doing to address the issue. Obviously you’re expanding outside of gas, which expands beyond the niche that nobody cares about. What else are you doing to address these issues?

I don’t think there’s many things we can do. We’ve been on the road shows; we’re trying to explain that we are not a dryable company, that’s partly why our sale price is trailing the BDI index. It’s very weird, but nobody appreciated up to yesterday our very, very good dividend that was yielding in the recent months 17%. Nobody appreciated as we grew five times the fleet, this result over blowing the best side of things. So, if nothing is appreciated, management has to see what it’s going to do to add value in other way. So this cash that was destined to be a dividend, now it will be destined to come back to the company, and we will use it accordingly.

Okay. So you don’t believe anybody appreciated the dividend and that’s why you’re no longer paying the dividend?

I’m very happy that the dividend guys left the stock. I’m very happy that our volume is close to $500,000 today in a few hours of trading. This is a stock for people that understand this business, who understand the fundamentals. It’s not a stock for people that just want 15% or 16% or 17% yield per annum, it’s not for them. So I’m happy that the stock is down and these people are out.

So you were basically a stable dividend with stable rates, a very conservative stable company and now you’re looking to possibly expand away from that, moving into product carriers or other shipping segments where perhaps there will be more growth, but there will be a lot more volatility in your earnings?

No, I never said that, I said that I will sit on my cash and if there are very attractive bargains and we have the cash to spend and we have finance and I have to tell you that we’re one of the few great companies that get finance today and we’re very proud of that, we will look to maximize the earnings and maximize this equity potential, and we will do it when it make sense. No, we will not be more, let’s say gamblers, because if we buy anything, again we will try to put it on long period as we did since day one with StealthGas.

Your next question comes from Doug Ruth - Lenox Financial Services.

What is the right level of leverage currently, do you think for the company?

I really don’t understand your question?

What amount of debt should be on the balance sheet? How should we look at debt-to-equity levels? What should be the right level of that?

In today’s environment, as you know very well, the lesser debt the better. So, I don’t think there’s a number that I can give you. Of course the lesser the debt in today’s environment, the better. Obviously I will repeat again; for a company that grew from nine ships to 50 in five years, I think that 40% debt-to-market values, I think personally is a very reasonable level. If you look at other companies, public companies obviously, they have negative equity; which means of that the debt is higher than the values of the ships. So I think that we’re in a very, very good position.

Could you explain how the company accounts for the employees? How come the employees aren’t considered employees of the company, the people that work on the crew?

As we’ve discussed many times and you’ll see it in all our prospectuses and filings, StealthGas has no employees. We are very lucky about that. The only StealthGas employees are myself; the CFO and the Board Members and one Internal Auditor to be exactly correct, and the rest of the staff are indirectly working for StealthGas. They are not paid by StealthGas, they are paid by the management company and we pay a fee per ship to the management company.

Do you feel like that’s the best way to handle that?

It cannot get any cheaper than that. If you look at other companies that are managing their ships themselves or having the employees themselves; we are definitely between 25% and 35% cheaper. Cheaper meaning we have less costs, meaning cheaper.

Okay and you continue to believe that focusing on the handy-size vessel is the right strategy, because there is less volatility?

As you can understand, to give you an example, very large gas carriers a new ship cost about $100 million and today it’s earning $6,000 a day. It has a non-inclusive breakeven of $55,000. So, if you have one of these ships, you’re losing about $24,000 to $25,000 per day. Our leaderships have running costs of $3,000. So even in today’s very bad market, when they’re earning $6.5 million, $7 million or $7.5 million, these little ships are making $3,500 to $4,000 profit per day. So I think that answers your question.

Yes and what is the trend with the wages? Is there are any relief on that?

You mean the crew wages?

Yes.

Up to last year before the crises we were quite stuck, because we had to increase wages on a regular basis, because there was a lot of competition for high spec crews. Now we still have the same problem, but I’m happy to say that it’s been relaxing a bit, because a lot of crews that were running from one ship to another are now jobless because of many idle ships and because of many cancellations of new buildings and scraping of older ships. So we feel we have this problem, but if the crisis continues, we hope that the problem is completely solved in the next one year.

Your next question comes from Ross DeMont - Midwood Capital.

A couple of quick question; Harry, is there a scenario under which the product tanker you’re expected to take delivery of at the end of this year, under which you might negotiated another solution and not necessary take delivery of that or even I suppose the Stealth S.V.?

Yes of course. As always we try to find the best solution for the company and our shareholders and definitely we have discussions with the sellers and the charters, but we have not reached an agreement yet. So, obviously we cannot disclose anything.

Okay and then just a modeling question on I think page nine, you gave us this financial estimator. What should we use as today’s spot rate for 40 to 50 CBM vessels?

40 to 50 is the average size. If you want to be on the safe side, use between seven and seven half.

Okay, so that comes down to about $75 million of EBITDA. Okay, and then can you just remind us on any other debt maturities or sort of financing needs other than the cash which has to be paid for the Stealth S.V., just for the Gas Astrid and if you take delivery for the final product tanker?

We need no other debt financing until 2011, unless of course we buy more ships.

Okay and for example, the $52 million you owe on the Stealth S.V., how much of that would be financed versus cash; would it be 70% financed?

It will be about 50% to 55%.

Your next question comes from Sean Moloney - Ship Management International.

Just really one question Harry. Looking at driving costs for the day, how do you feel you’re going to achieve this moving forward, given the high credit costs and I know you talk about leveling out of those, but they’re still very, very high, but also the late management fees? How are you going to control costs even more?

We have been successful in controlling costs, same as you have seen from our results, much better than our competitors. If you see our competitor releases in the last three years, you will see a very big steep increase on a per quarter basis. We were one out of the few companies that not only get the cost steady, but in many cases the cost fell on a per quarter basis and it’s very simple; one year or double things your hands-on. You don’t have too many third-party managers around the world. Obviously, you have a higher cost control and a much better cost control than as you understand having your vessel disbursed in three, four third-party managers around the world and this is what we’ve done. As you know, the fleet is grouped between three different separate groups. One group is managed by our in-house management company; the second group is split between two third-party managers and the third group is vessels on bareboat. Up to now this strategy has worked very well and I think it will continue to do so because we are on top of it and we spend a lot of time on costs, instead of only looking for future strategies and how to raise equity and those kinds of things. Now on the crew, just to answer that part of your question, we have been again, pioneers in using crew from different areas of the world, just to keep costs on bay, and because we have so many ships, the officers cannot blackmail us, because they know that if they don’t work for us, they have to go and work for much smaller gas companies. They want to work for a big listed company and therefore in some cases they will accept 5% or 10% less to work for us than to work for a much smaller company, but they want to know if it’s around in the next nine months to one and half year.

Okay, one last question, Harry. We’re starting to hear very, very quiet talk about the [Inaudible] the shipping market and certainly with China importing its largest ever amount of iron ore in the last three to four weeks and that’s having an impact on tank size rates. What are going to be the drivers do you think to move your sets out of doldrums and when will that happen? Also how concerned are you about the stability of your charters themselves going forward?

Number one, I don’t think we are near the end of the tunnel, so I wouldn’t open the champagne yet, number one. Number two, the crises started from the banks and will finish from the banks. China importing or not importing more dryable commodities doesn’t really affect my business; it doesn’t really affect the banks as you can understand, so it’s a seasonal thing. Lastly, as I told you before, our freight rates are relatively stable. A drop of 10% is nothing compared to the 80% and 90% drops. We’ve seen in containers and big bulkers. So, I don’t think my charters will have any problem, because if there are losses if any, they are going to be much, much smaller than if they have very big tankers, bulkers or containers chartered in.

Your next question comes from Steve Emerson - Emerson Investment Group.

For us who are not intimately familiar with shipping, when you take delivery of these two product tankers based on today’s spot rates or let’s say charter rates, what kind of loses would you be seeing per day?

We have the vessels fixed. So, you mean what kind of losses you’re talking…?

Okay, then my apologies from my ignorance. I didn’t realize you had chartered out these vessels.

All our vessels, especially the expensive ones are charted out. If the vessels were not chartered, then we will definitely pay the penalty and cancel the deal.

Okay. What are the penalties to cancel?

There is no penalty to cancel, because the vessels are fixed, therefore we are not trying to cancel the ships.

Okay got it. I’ve been reading that China, due to the decline in ship orders and cancellations is going to be financing, call it speculative ship building to keep their yards full. In lieu of the fact that your sector is doing so well, have you been hearing about major builds coming in your sector?

Chinese shipyards do not build gas carriers, so I think that covers you.

I’m sorry, I didn’t catch that.

Chinese shipyards have not built gas carriers.

That’s a very good answer. Now what are the limitations or when might you be making a decision on buying back your stock in lieu of the table you gave us, where your company is far cheaper than the assets?

I don’t think we will be buying the stock back very soon, because number one, we don’t think that this is not the lowest price of our stock, number one. Number two, as I told you, we think there’s going to be very interesting opportunities as I said before. At the end of year in our segments, not LPG, and thus we’ll keep the cost and we’ll see we’re going to do with it.

Okay, but however it looks like now your segment, based on your stock is so cheap that it’s a compelling value or are you going to wait till September, end of year to make that decision. If it’s cheaper to buy your stock, do you have the capability or the legal; are you allowed to very significant amounts of your own stock in the company?

Of course, we’re allowed. We’re allowed to do whatever we like, but if you think it’s so cheap, why don’t you buy?

I have.

Good for you then. Then today you can buy some more, because it’s even cheaper.

Your next question comes from Mike Trainer - Milwaukee Private Wealth Management.

This is actually Jeff Geygan. On our last call, when I asked you the question about to suspending your dividend, you were very hesitant to do that for fear that you would encourage a third party to come in and make a hustle off of your company, do you recall that?

That’s true.

Okay, but today you have cut your dividend, so what has changed or do you anticipate that this action will in fact stimulate a third party offer?

I’m not a prophet, I don’t know if somebody will come. If somebody will come, we’ll sit and discuss. As you can understand from our slide number 13, as I will repeat again, we’re one of the cheapest healthy stocks out there. So if somebody thinks we’re indeed cheap and wants to discuss something, our doors are always open. I have said always when we were discussing the dividend and review and with other investors I always said that we will be patient, but after a certain time limit. We’ve been patient for many, many, many quarters, despite the fact that except from two quarters the company’s stock was always trading below and heavy; always, always under performing despite the fact that we kept all our promises and despite the fact that the profit and the income of the ships was always very stable. So since as I said before, nobody appreciates this very good dividend and since I was the biggest beneficiary of the dividend, I decided to sacrifice it and use the cash for a better reason, which we’re going to see in the next as I said, six to nine months; what that goal will be, I don’t know.

Well Harry, I appreciate that you may be the biggest beneficiary of the dividend, but you do have a fiduciary responsibility to the rest of us. So I trust that you will make decisions that are not only in your interest, but the interest of all shareholders and if in fact you’re stock is so cheap, maybe what’s in the interest of all shareholders’ is to buy it back.

A very good comment Jeff, but what happens if the crisis doesn’t finish and the charters of the product tankers go bankrupt for example, what happens then?

Well I’m not a prophet either.

Good. So as you can understand, because I’ve been in this business that’s 14 years old, I can tell you, we’re better to have the cash in the draw in this very, very challenging times, than immediately go and backbite your stock and have only $3 million, $4 million in the draw, because you never know what happens the next day.

That’s true. You said you’ve been in the business since you’re 14, but I should just clarify how old are you now, because the delta between 14 and today?

A very good comment, I’m 31

Yes, so you’ve been at 17 years right?

Correct.

Yes, okay. Well we continue to hold the stock. As shareholders we’re a little bit concerned. We want to make sure that your use of that cash is prudent and that if the best prudence costs for buying in your own shares that you don’t eliminate that, for some reason it may not be obvious to us?

I have not eliminated anything, but we’re not going to do anything with the cash for the time being as discussed.

Thank you. As we have no further questions, I’d like to turn the call back over to you gentlemen for any additional or closing remarks.

We would like to thank everyone for joining us at our conference call today and for your interest and trust in our company. We look forward to having you with us again for the next conference call, for our second quarter and half year ’09 results. Thank you very much everyone.

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