TRAILER BRIDGE INC (TRBR)
Quarterly Report (SEC form 10-Q)

RESULTS OF OPERATIONS:
Three Months Ended June 30, 2000 and 1999

Total revenue for the three months ended June 30, 2000 was $23,764,889, an increase of $1,078,472, or 4.8%, compared to total revenue of $22,686,417 reported for the three months ended June 30, 1999. The increased revenue was due to increased shipping volume. The Company also reported significant increases in income for the three months ended June 30, 2000, highlighted by net income of $627,724, or $.06 per share, as compared to a net loss of $399,377, or $.04 per share, for the three months ended June 30, 1999. Net income for the three months ended June 30, 2000 included a benefit of $127,100 from the cumulative effect of a change in accounting principle related to periodic vessel dry-docking.

Operating income for the three months ended June 30, 2000, increased to $1,302,713, an improvement of $1,162,296, or 828.7%, from operating income of $140,417 for the three months ended June 30, 1999. Operating income was higher due to increased volume across most sectors, continuing improvement in costs and the absence of $709,335 of hurricane-related costs incurred last year related to the Company's operations in San Juan. Higher operating income resulted in an improved operating ratio of 94.5% for the three months ended June 30, 2000 compared to the 99.4% operating ratio for the three months ended June 30, 1999.

Income before income taxes for the three months ended June 30, 2000 was $824,551, an improvement of $1,451,963 from the three months ended June 30, 1999. Pre-tax income for the three months ended June 30, 2000, includes $45,717 in additional interest expense over the three months ended June 30, 1999 and $384,250 related to the sale of assets versus a gain of $48,866 in the three months ended June 30, 1999.

Total southbound Puerto Rico volume for the three months ended June 30, 2000, increased 10.1% and total northbound volume increased 22.7% compared to the three months ended June 30, 1999. Comparing total volume and total revenue by direction, Trailer Bridge's effective yield to and from Puerto Rico decreased 8.5% and 13.0%, respectively, compared to the three months ended June 30, 1999. The Company's Puerto Rico deployed vessel capacity utilization overall during the three months ended June 30, 2000, was 79.9% to Puerto Rico and 29.3% from Puerto Rico. These were below capacity utilization figures of 90.6% to Puerto Rico and 30.6% from Puerto Rico during the three months ended June 30, 1999, when Trailer Bridge had less effective capacity in the Puerto Rico lane prior to a change in itinerary involving the same number of overall deployed vessels. All of these capacity utilization figures are based upon vessels deployed in service and exclude the effect of two Triplestack Box Carriers(R) that are presently laid-up. Total net expenses related to these two vessels, consisting primarily of depreciation and interest, were $401,179 during the three months ended June 30, 2000. When deployed, these two vessels will increase Trailer Bridge's in service fleet capacity by approximately 31%.

The Company's business model involves a high degree of operating leverage with changes in volume having a disproportionate effect on overall yields. Based upon its cost structure and the fixed versus variable nature of those costs, the Company believes that its present incremental cost to handle additional volume within its system is lower than that of any of its competitors.

Six Months Ended June 30, 2000 and 1999

Total revenue for the six months ended June 30, 2000 was $45,098,294, a decrease of $338,727, or .7%, compared to total revenue of $45,437,021 reported for the six months ended June 30, 1999. The decreased revenue was due to lower effective yields for the six month period ending June 30, 2000 as compared to the six months ended June 30, 1999. The net loss improved by $1,559,853 to $523,203, or $.05 per share, for the six months ended June 30, 2000, compared to a net loss of $2,083,056, or $.21 per share for the six months ended June 30, 1999. Operating income improved $2,337,700 to $399,683 in the six month period ending June 30, 2000 as compared to an operating loss of $1,938,018 in the comparable period last year. The improvement in operating income was attributable to continuing improvement in costs and the absence of $3,092,244 of hurricane-related costs incurred last year related to the Company's operations in San Juan partially offset by the effect of increased fuel prices.

Total southbound Puerto Rico volume for the six months ended June 30, 2000, increased 4.9% and total northbound volume increased 17.7% compared to the six months ended June 30, 1999. Comparing total volume and total revenue by direction, Trailer Bridge's effective yield to and from Puerto Rico decreased 8.9% and 12.0%, respectively, compared to the six months ended June 30, 1999. The Company's Puerto Rico deployed vessel capacity utilization overall during the six months ended June 30, 2000, was 77.3% to Puerto Rico and 28.1% from Puerto Rico. These were below capacity utilization figures of 89.7% to Puerto Rico and 28.7% from Puerto Rico during the six months ended June 30, 1999, when Trailer Bridge had less effective capacity in the Puerto Rico lane prior to a change in itinerary involving the same number of overall deployed vessels. All of these capacity utilization figures are based upon vessels deployed in service and exclude the effect of two Triplestack Box Carriers(R) that are presently laid-up. Total net expenses related to these two vessels, consisting primarily of depreciation and interest, were $500,027 during the six months ended June 30, 2000 reduced by $259,090 of charter revenue from third parties.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2000, cash amounted to $3.3 million and stockholders equity was $28.7 million. Net cash used in operating activities for the six month period ending June 30, 2000 improved to $649,017 from $2,175,289 for the six month period ended June 30, 1999. For the six months ending June 30, 2000 net cash provided in investing activities was $962,572 and net cash provided by financing activities was $569,571. As a result of the above, cash increased in the period ending June 30, 2000 by $883,126 to $3,328,876.

The April 1, 2001 expiration date of the Company's revolving credit facility of $15.5 million results in the Company stating a negative working capital of $9.7 million at June 30, 2000. Upon the expiration date the $13.6 million outstanding balance will be due. The revolving credit facility is secured at June 30, 2000 by $27.3 million of equipment and eligible accounts receivable. The Company expects to have a new revolving credit facility or similar financing in place prior to its expiration date.

The Company continues to maintain adequate current assets to satisfy current liabilities when they are due and has sufficient liquidity and financial resources to manage its day-to-day cash needs. Management believes that cash flow from operations combined with equipment financings will be adequate to meet the Company's debt service requirements and to meet its working capital needs for the remainder of 2000.

FORWARD-LOOKING STATEMENTS

This report contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The matters discussed in this report include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to the future operating performance of the Company. Investors are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward looking statements as a result of various factors. Without limitation, these risks and uncertainties include the risks of weather, economic recessions, changes in demand for transportation services offered by the Company, and changes in rate levels for transportation services offered by the Company.

©1998 Trailer Bridge, Inc.