2001 Second Quarter ResultsTrailer Bridge, Inc. Press Release Trailer Bridge Reports Second Quarter Results JACKSONVILLE, Fla. --
Trailer Bridge,
Inc. (TRBR)
today reported financial results for the second quarter ended June 30, 2001.
Total revenue for the three months ended June 30, 2001 was $21,659,184,
as compared to $23,764,889 for the second quarter of 2000. Compared
sequentially to the first quarter of 2001, total revenue increased
$1,022,471 or 5.0%. Trailer Bridge had 14.4% more overall vessel capacity
deployed between the mainland and Puerto Rico with weekly Northeast
sailings compared to bi-weekly sailings in the second quarter of 2000.
Compared sequentially to the first quarter, total deployed capacity was up
11.9% primarily due to missed sailings due to dry-docking in the first
quarter.
The operating loss for the second quarter ended June 30, 2001 was
$4,131,848, as compared to $1,302,714 operating income in the year earlier
period. However, this marks an improvement of $400,328 from the operating
loss in the first quarter of 2001. Operating income was lower compared to
the year earlier period due to lower yields, lower vessel and tractor
asset utilization and the effect of fully expensing a dry-docking charge
early in the quarter. As a result, Trailer Bridge's operating ratio was
119.1% during the second quarter of 2001 compared to the 94.5% operating
ratio during the year earlier period and the 122.0% during the first
quarter of 2001.
As previously disclosed, the second quarter results include an accrual
of more than $1.8 million of charter-hire to an affiliate, the payment of
which has been deferred to next year. In addition, an equivalent amount of
charter-hire that was accrued for in the first quarter results has been
forgiven. These large non-cash accruals, the effect of the non-recurring
dry-docking expenses in both the first and second quarter and the large
non-cash depreciation charges underscore the importance of various cash
flow measures as a further benchmark on the level and trend of Trailer
Bridge's results. For instance, during the second quarter, EBITDA adjusted
to exclude charter-hire, dry-docking and loss on sale of equipment
resulted in a reduced operating cash flow deficit of $614,783. Another
measure, the statement of cash flows as filed in Trailer Bridge's 10-Q
financial statements, shows that net cash used in operating activities
improved $1,272,663 in the second quarter compared sequentially to the
first quarter of 2001. The net cash used in operating activities includes
the effect of charter-hire that was deferred or forgiven, respectively, in
the second and first quarters, as well as non-recurring dry-docking
expenses. Excluding those amounts, adjusted net cash used in operating
activities was approximately $1.0 million in the second quarter, or about
one half of the $1.9 million adjusted net cash used in operating
activities in the first quarter.
For the second quarter ended June 30, 2001, net interest expense was
$810,678, down 1.7% from the year earlier period and down 7.2%
sequentially from the first quarter due primarily to debt reductions.
During the second quarter of 2001, Trailer Bridge also had a loss of
$218,419 related to the sale of excess 48' trailer equipment. Loss before
income taxes for the second quarter was $5,160,944, a decrease of
$5,661,569 from the year earlier period but an improvement of $213,210
sequentially from the first quarter of 2001. As previously disclosed,
income taxes will not be reflected until profitable operations resume. Net
loss per share was $.53 for the second quarter compared to net income per
share of $.06 for the year earlier period and net loss per share of $.55
for the first quarter of 2001.
At June 30, 2001, cash amounted to $747,317, working capital was $3.2
million and stockholders equity was equal to $10.1 million. Trailer Bridge
requested and received waivers for those financial covenants it was not in
compliance with at June 30, 2001 under its revolving credit/term loan and
the covenants have been reset at levels that Trailer Bridge anticipates it
will be able to comply with in the future.
Comparing Trailer Bridge's segments for the second quarter of 2001 to
the year earlier period, total southbound volume decreased 3.3% and total
northbound volume decreased 26.2%. Comparing total volume and total
revenue by direction, Trailer Bridge's effective yield to and from Puerto
Rico decreased 3.4% southbound and increased .2% northbound. The Company's
Puerto Rico deployed vessel capacity utilization was 65.6% southbound and
19.5% northbound, well below the 79.9% and 29.3%, respectively, during the
year earlier period when 12.6% less capacity was deployed. While core
southbound trailer volume increased 3.6%, all other segments showed volume
decreases, with new car volume down sharply at 25.8%. Trailer Bridge had
an average of 200 tractor units operating on the mainland during the
quarter, averaging 9,126 miles per month of which 77.8% were loaded.
Comparing segments sequentially to the first quarter, total southbound
volume increased 4.4% and total northbound volume decreased 1.4%. Trailer
Bridge's effective yield to and from Puerto Rico increased 2.2% and 1.6%,
respectively, in a sequential comparison. Deployed vessel capacity
utilization was down 5.0 percentage points southbound and 2.5 percentage
points northbound. Tractor performance in terms of loaded mile utilization
figures represented an increase of 3.1 percentage points sequentially from
the first quarter and a continuation of a favorable trend since the fourth
quarter that has extended into July.
While the aggregate quarterly results show some continued improvement,
they understate the acceleration of this improving trend that is evident
in the monthly results of the second quarter as well as post-second
quarter results and events. Approximately 107% of the overall operating
loss for the second quarter occurred in April and May and June itself
produced operating income. The following table highlights the actual
operating results for the quarter by month. Note that the second
dry-docking occurred in March and that no one month should be looked at in
isolation. The 4/4/5 week pattern in the second quarter tends to
understate the results of those months with four weeks of revenue (April
and May) and overstate the results of the month with five weeks of revenue
(June).
Subsequent to the second quarter, Trailer Bridge finalized contractual
operating agreements that result in cost reductions primarily effective
July 1, 2001. The combined annual direct cost reductions from these
contractual changes is expected to be over $2.2 million and those savings
will be begin to be reflected in third quarter results. In addition,
Trailer Bridge has finalized and implemented changes related to four tugs
that it believes will substantially improve on-time performance and
eliminate excess costs associated with schedule delays.
The trend in tractor utilization continues to be positive with
significant improvements evident that are continuing into the third
quarter. For all of July, Trailer Bridge's tractors operated at 80.2%
loaded mile utilization, the first month above 80% since 1999. These
favorable developments have resulted from both operational changes and the
better schedule integrity that has resulted from the previously discussed
tug changes. This continues a trend since the fourth quarter of last year
when we experienced very poor tractor utilization of 72.7%. Because our
tractors run, in total, some 2 million highway miles a month, each
additional 1% loaded mile utilization translates into elimination of
20,000 miles of purchased power we buy at over $1 per mile. Based on July
performance, the effective cost reductions compared to the fourth quarter
levels of 2000 translate into almost $2 million per year.
Volume and revenue levels for June and July were encouraging relative
to the first two months of the second quarter. For those two months,
overall southbound utilization was 71.0% and overall northbound
utilization was 20.4%. Based upon anticipated volume and revenue levels as
well as operating cost reductions, including the major cost reduction
items discussed above, Trailer Bridge anticipates that its third quarter
operating results will show a meaningful improvement over the second
quarter results even without major capacity reductions in the Puerto Rico
market.
John D. McCown, Chairman and CEO, said, "I can't tell you
precisely when these abysmal, hyper-extended market conditions will end
and sustainable reality will return to the Puerto Rico lane, but I can
tell you Trailer Bridge is prepared to take advantage of the turnaround
that will inevitably occur. We have a differentiated, relatively low-cost
freight system in a necessary freight market and remain confident in the
strength of the Company's assets."
Trailer Bridge will discuss second quarter results in a conference call
at 10:00 A.M. (Eastern Time) on Wednesday, August 15. The dial in number
is 1-212-346-0102. The call will simultaneously be broadcast over the
Internet. To listen to the live webcast, please go to
www.trailerbridge.com and click on the conference call link. The
conference call will be archived and accessible for approximately 90 days
if you are unable to listen to the live call.
Trailer Bridge provides integrated trucking and marine freight service
to and from all points in the lower 48 states and Puerto Rico, bringing
efficiency, environmental and safety benefits to domestic cargo in that
traffic lane. This total transportation system utilizes its own trucks,
drivers, trailers, containers, U.S. flag vessels and marine facilities in
Jacksonville, New York and San Juan. Additional information on Trailer
Bridge is available at the www.trailerbridge.com website.
This press release contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. The matters discussed in this press release 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 economic recessions, changes in demand for transportation
services offered by the Company, and changes in rate levels for
transportation services offered by the Company.
Contact Information: Contact: Trailer Bridge, Inc., Jacksonville
Ralph W. Heim, 800/554-1589
or
(TRBR INVESTOR RELATIONS COUNSEL)
The Equity Group Inc., New York
Devin Sullivan, 212/836-9608
Adam Prior, 212/836-9606
www.theequitygroup.com
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