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

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

Operating revenue was $23,151,664 for the three months ended September 30, 2000 an increase of $2,525,865, or 12.2%, compared to the three months ended September 30, 1999. Core trailer volume to Puerto Rico rose 32.5% compared to the three months ended September 30, 1999, resulting in a $3,101,794, or 26.1%, increase in core trailer revenue to Puerto Rico versus the three months ended September 30, 1999. This improvement was achieved despite a 3.2% decrease in total car and other vehicle volume, which produced a $132,210, or 3.6%, decrease in car and other vehicle revenue for the three months ended September 30, 2000. Revenue from shipper owned or leased equipment moving to Puerto Rico for the three months ended September 30, 2000, decreased by $29,341, or 3.1%, from the three months ended September 30, 1999. Trailer volume from Puerto Rico for the three months ended September 30, 2000, increased 3.7%, while related revenue decreased by $184,628, or 8.2%, compared to the three months ended September 30, 1999. Total domestic and other revenue for the three months ended September 30, 2000, of $1,663,911 represented a decrease of $229,751, or 12.1%, from the three months ended September 30, 1999.

Operating income for the three months ended September 30, 2000 was $340,337, an increase of $2,586,163 from an operating loss of $2,245,826 for the three months ended September 30, 1999. Operating income for the three months ended September 30, 2000 included a non-recurring expense recovery from an affiliate of $907,439 for marine related expenses and additional expenses of $651,195 related to correcting schedule variances caused by a tug malfunction during the period. Trailer Bridge's operating ratio (operating expenses/ operating revenues) during the three months ended September 30, 2000, improved to 98.5% from 110.9% for the three months ended September 30, 1999. Net interest expense for the three months ended September 30, 2000, declined to $820,317 from $889,423 incurred during the three months ended September 30, 1999. During the three months ended September 30, 2000, Trailer Bridge also realized a gain of $39,380 related to the sale of older trailer equipment.

The loss before income taxes for the three months ended September 30, 2000 was $440,600, an improvement of $2,690,641 from a pre-tax loss of $3,131,241 incurred in the three months ended September 30, 1999. The net loss for the three months ended September 30, 2000, narrowed substantially to $210,257, or $.02 per share, compared to net loss of $1,954,583, or $.20 per share, for the three months ended September 30, 1999.

Total volume to Puerto Rico for the three months ended September 30, 2000, including cars and other vehicles, increased 24.8% compared to the three months ended September 30, 1999. Total volume from Puerto Rico for the three months ended September 30, 2000, increased 4.1% compared to the three months ended September 30, 1999. During the three months ended September 30, 2000, the average revenue per core southbound trailer load declined 4.8% compared to the three months ended September 30, 1999. The average revenue per northbound trailer load, during the three months ended September 30, 2000 decreased 10.2% compared to the three months ended September 30, 1999. Trailer Bridge had an average of 233 tractor units operating on the mainland during the three months ended September 30, 2000, generating 8,782 miles per month, of which 69.7% were loaded miles. The Company's Puerto Rico deployed vessel capacity utilization during the three months ended September 30, 2000, was 80.7% to Puerto Rico and 26.1% from Puerto Rico. These capacity utilization figures are based upon vessels deployed in service and exclude the effect of two Triplestack Box Carriers(TM) that were laid-up for much of the quarter. In late August, a short-term charter of one of these vessels to a third party commenced and in early October the other vessel was deployed in service to augment the Northeast Puerto Rico service. The total costs associated with the two laid-up vessels during the three months ended September 30, 2000, net of charter income, were $262,849.

Beginning in early October, Trailer Bridge proceeded with its previously announced plan to expand to a weekly direct service between Port Newark and San Juan from the previous bi-weekly service. To date in the fourth quarter, the capacity utilization that Trailer Bridge has experienced each week on the weekly service exceeds the capacity utilization experienced on the previous bi-weekly service.

Nine Months Ended September 30, 2000 and 1999 -

Total revenue for the nine months ended September 30, 2000 was $68,249,958, an increase of $2,187,138, or 3.3%, compared to total revenue of $66,062,820 reported for the nine months ended September 30, 1999. The increase in revenue was due to higher volume to and from Puerto Rico. The net loss improved by $3,304,179 to $733,460, or $.08 per share, for the nine months ended September 30, 2000, compared to a net loss of $4,037,639, or $.41 per share for the nine months ended September 30, 1999. Operating income for the nine months ended September 30, 2000, improved $4,923,863 to $740,020 compared to an operating loss of $4,138,844 in the nine months ended September 30, 1999. 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. Net income for the nine months ended September 30, 2000 included a benefit of $127,100 from the cumulative effect of a change in accounting principle related to periodic vessel dry-docking.

Total southbound Puerto Rico volume for the nine months ended September 30, 2000 increased 14.2% and total northbound volume increased 12.9% compared to the nine months ended September 30, 1999. During portions of the period, two Triplestack Box Carriers(R) were laid-up. Total net expenses related to these two vessels, consisting primarily of depreciation and interest, were $752,783 during the nine months ended September 30, 2000 reduced by $331,096 of charter revenue from third parties. Presently one of these vessels is in scheduled service between Newark, New Jersey and San Juan, Puerto Rico and the other is being chartered on a short term charter.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2000, cash amounted to $3.6 million and stockholders' equity was $28.5 million. Net cash used in operating activities for the nine months ended September 30, 2000 improved to $180,191 from $1,513,474, for the nine month period ended September 30, 1999. For the nine months ending September 30, 2000 net cash provided by investing activities was $847,109 and net cash provided by financing activities was $482,738 consisting of $5.0 million in borrowing from an affiliate less $4.5 million in principal repayments. As a result of the above, cash increased in the period ending September 30, 2000 by $1,149,656 to $3,595,406.

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 $12.8 million at September 30, 2000. Upon the expiration date the $13.6 million outstanding balance will be due. The revolving credit facility is secured at September 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.

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.