JACKSONVILLE, Fla.--(BUSINESS WIRE)--May 1, 2002--Trailer Bridge, Inc. (NASDAQ National Market: TRBR - news)--
Operational Initiatives and Effective Leveraging of Assets
Produce Improved Operating Results as Market
Conditions are Poised for Improvement
Highlights
Trailer Bridge, Inc. (NASDAQ National Market: TRBR - news) today reported financial results for the first quarter ended March 31, 2002 (see attached table), highlighted by a significantly narrowed net loss, operating profits in the month of March and news of market consolidation in the Puerto Rico trade as a result of the discontinuance of operations by a competitor.
With the discontinuance of the Northeast service at the beginning of the quarter, Trailer Bridge had 21.5% less overall vessel capacity deployed in the Puerto Rico lane compared to the first quarter of 2001. Total revenue for the three months ended March 31, 2002 was $17,480,126, a decrease of $3,156,587, or 15.3% compared to the first quarter of 2001. The Company's total volume of freight moving to and from Puerto Rico decreased 17.6% compared to the year earlier period.
With the discontinuance of the Northeast service, the Company believes that volume and yield comparisons solely related to freight moving via Jacksonville are most relevant. For the three months ended March 31, 2002, total southbound volume over Jacksonville increased 6.3% compared to the year earlier period and 7.8% sequentially from the fourth quarter of 2001. Northbound, total volume over Jacksonville decreased 31.2% from the year ago period and 11.7% sequentially from the fourth quarter. The effective yield of all of the southbound cargo moving via Jacksonville represented a decrease of 2.7% from the year earlier period but an increase of 1.2% sequentially from the fourth quarter. In the other direction, the effective yield of all northbound cargo moving over Jacksonville increased 12.4% from the year ago period and 4.9% sequentially from the fourth quarter of 2001.
The Company's Puerto Rico deployed vessel capacity utilization overall during the first quarter was 76.3% to Puerto Rico and 18.3% from Puerto Rico compared to 70.7% and 22.0%, respectively, during the first quarter of 2001. The current first quarter capacity utilization figures represented improvement in both directions sequentially from the fourth quarter of 2001 when deployed vessels were utilized 66.0% southbound and 17.0% northbound. Trailer Bridge had an average of 178 tractor units operating on the mainland during the quarter, generating 9,076 miles per month of which 79.6% were loaded, an improvement in efficiency from the year earlier period (9,202 and 74.7%, respectively) as well as sequentially from the fourth quarter of 2001 (8,743 and 78.2%, respectively).
The operating loss for the first quarter ended March 31, 2002 was $519,025, as compared to an operating loss of $4,532,174 in the prior year period. Compared to the first quarter of 2001, operating income improved by $4,013,149 due to discontinuing the Northeast service, reductions in headcount and equipment, an array of other cost-cutting initiatives and the absence of the $877,865 dry-docking expense in the year ago quarter. As a result of the above, the operating ratio was 103.0% during the first quarter of 2002 compared to the 122.0% operating ratio during the year earlier period. Net interest expense of $723,147 was down $150,715 from the year earlier period due primarily to lower interest rates. The Company also realized a net loss of $68,362 from non-operating items during the quarter compared to a slight gain in the year earlier period.
The Company's loss before income taxes for the first quarter ended March 31, 2002 was $1,310,534, compared to a pre-tax loss of $5,374,154 in the year earlier period. After a full valuation allowance for income tax credits, the net loss for the first quarter remained at $1,310,534, or $.13 per share, as compared to a net loss of $5,374,154 or $.55 per share, for the year earlier period.
As previously disclosed, the Company has seen a significant reduction in
operating losses since early 2002 driven by the actions taken at the end of last
year. The Company has previously disclosed the overall operating results for the
two-month period ending February 2002 compared to similar earlier periods. The
sharp improvement in actual performance has extended into and accelerated in
March when the Company achieved both an operating and bottom-line profit. The
table below shows summary actual results for the first quarter of 2002 by month.
January February March 1Q2002 Revenue 5,426,297 5,828,465 6,225,364 17,480,126 Operating Expenses 5,717,362 6,095,313 6,186,477 17,999,151 Operating (Loss) Income (291,065) (266,848) 38,887 (519,025) Operating Ratio 105.4% 104.6% 99.4% 103.0% Net (Loss) Income (893,238) (523,100) 105,804 (1,310,534)
As the above table shows, the improvement has been significant and pronounced. While revenue has decreased with our reduction in capacity, the first actual results after implementing the various actions show operating expense reductions equivalent to more than twice the revenue reduction.
The previously announced financial support from an affiliate in the amount of $4 million has been received by Trailer Bridge. With that funding, the Company believes its liquidity is more than sufficient to meet all of its obligations, including all scheduled principal payments, through at least the end of 2002 even without a reduction in market capacity in the Puerto Rico lane. Trailer Bridge expects to receive a formal waiver of all past financial covenant violations from its senior lender and new financial covenants reset at levels at which the Company believes it will maintain compliance.
On April 26, a competitor with a 27% market share discontinued operations and sold its vessel assets to another competitor. The excess capacity in the Puerto Rico market prior to this announcement was approximately 30% and we believe this consolidation will meaningfully address the imbalance. All carriers in the trade should benefit from the greater asset utilization of presently deployed vessels and sustainable pricing, reversing the significant rate declines in recent years. Trailer Bridge's own effective yield on southbound 53' loads is down approximately 25% from five years ago. In April, another major competitor announced a general rate increase of 10% effective June 15 on its tariff rate between the mainland and Puerto Rico.
John D. McCown, Chairman and CEO, said, "We are lean and liquid and are looking forward to participating and thriving in what will be a dramatically different Puerto Rico lane going forward. The correction in excess capacity that is now unfolding will lead to pronounced and lasting market changes that will, I believe, move Trailer Bridge into a profit margin range shared by few transportation companies. We have said, and I re-affirm now, that the assets and people that comprise our freight system can, in more normalized market conditions in the Puerto Rico lane, deliver earnings of more than $3 per share per year. Fundamental analysis indicates, and I strongly believe, that TRBR stock represents an extraordinary investment opportunity due to the staggering future potential of a lean, cost-efficient model in this and other necessary markets."
Trailer Bridge will discuss first quarter results in a conference call at 11:00 A.M. (Eastern Time) on Thursday, May 2nd. The dial in number is 800-863-1575. The call will also be simultaneously 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 and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville 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 the company maintaining sufficient liquidity to operate its business, continued support of its lenders, vendors and employees, economic recessions, severe weather, changes in demand for transportation services offered by the Company, capacity conditions in the Puerto Rico trade lane and changes in rate levels for transportation services offered by the Company.
TRAILER BRIDGE, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months
Ended March 31,
-------------------------------
2002 2001
------------ ------------
OPERATING REVENUES $ 17,480,126 $ 20,636,713
OPERATING EXPENSES:
Salaries wages, and benefits 3,973,364 4,435,428
Rent and purchased transportation:
Related Party 1,809,000 1,809,000
Other 4,394,201 6,865,071
Fuel 1,616,323 2,850,887
Operating and maintenance
(exclusive of depreciation shown
separately below) 4,016,727 6,047,753
Taxes and licenses 180,385 181,968
Insurance and claims 625,771 636,072
Communications and utilities 158,714 170,040
Depreciation and amortization 920,590 1,298,202
Other operating expenses 304,076 874,466
------------ ------------
17,999,151 25,168,887
------------ ------------
OPERATING (LOSS) INCOME (519,025) (4,532,174)
NONOPERATING INCOME (EXPENSE):
Interest expense, net
(723,147) (873,862)
Gain on sale and other, net (68,362) 31,883
------------ ------------
(791,509) (841,980)
------------ ------------
(LOSS) INCOME BEFORE BENEFIT
(PROVISION) FOR INCOME TAXES (1,310,534) (5,374,154)
BENEFIT (PROVISION) FOR INCOME TAXES - -
------------ ------------
Income Before Cumulative Effect of
Accounting Changes (1,310,534) (5,374,154)
Cumulative Effect of Accounting
Changes
(Net of Income Taxes) - -
------------ ------------
NET (LOSS) INCOME $ (1,310,534) $ (5,374,154)
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NET (LOSS) INCOME PER SHARE $ (0.13) $ (0.55)
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WEIGHTED AVERAGE SHARES OUTSTANDING 9,777,500 9,777,500
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Trailer Bridge, Inc.
John D. McCown, 800/554-1589
-OR-
TRBR INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Devin Sullivan, 212/836-9608
Adam Prior, 212/836-9606
www.theequitygroup.com