JACKSONVILLE, Fla.--(BUSINESS WIRE)--Aug. 9, 2002--Trailer Bridge,
Inc. (NASDAQ National Market: TRBR
- News)
Highlights
Trailer Bridge, Inc. (NASDAQ National Market: TRBR - News) today reported financial results for the second quarter ended June 30, 2002 (see attached table) highlighted by a significantly reduced losses, profits in the months of May and June and the beginning effects from what is anticipated to be sharp and continuing improvements in market conditions in the Puerto Rico lane.
When the Company released its first quarter results, it disclosed a just announced transaction where a competitor with a 27% market share and operating under Chapter 11 of the bankruptcy code had sold its vessel assets to another competitor. Shortly after that transaction was finalized in mid-May, the purchaser began taking steps that effectively resulted in two-thirds of the capacity of the purchased vessels that were deployed being permanently removed from the Puerto Rico market. Trailer Bridge believes this action addresses some two-thirds of the excess capacity in the lane, which was previously approximately 30%. The Company believes that this previous level of excess capacity has been the root cause of the hyper-competitive conditions in the Puerto Rico market. With this change, Trailer Bridge believes it and the other remaining carriers in the lane will benefit from greater asset utilization and an unwinding of the unsustainable pricing characteristic of recent years. Trailer Bridge's own effective yield on core southbound loads is down approximately 25% from five years ago.
The discontinuance of the direct Northeast service at the end of last year, while significantly reducing costs, reduced revenues in Q2 2002 and led to an overall reduction in vessel capacity deployed of 26.3% this quarter when compared to the second quarter of 2001. Total revenue for the three months ended June 30, 2002 was $18,116,637, a decrease of $3,542,547 or 16.4% compared to the prior year period; revenues in the second quarter of 2001 included sales related to the now closed Northeast service. The Company's total volume of freight moving to and from Puerto Rico decreased 17.3% compared to the year earlier period.
Due to 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 June 30, 2002, total southbound volume over Jacksonville increased 3.0% compared to the year earlier period and 0.3% sequentially from the first quarter of 2002. Northbound, total volume through Jacksonville decreased 7.5% from the year ago period and increased 30.8% sequentially from the first quarter. The effective yield of all of the southbound freight moving via Jacksonville represented a decrease of 3.5% from the year earlier period and an increase of 2.1% sequentially from the first quarter. Northbound, the effective yield on all cargo moving via Jacksonville increased 8.4% from the year ago period and 0.3% sequentially from the first quarter of 2002.
Trailer Bridge's deployed vessel capacity utilization overall during the second quarter was 75.5% to Puerto Rico and 21.3% from Puerto Rico, compared to 65.6% and 19.5% overall, respectively, during the second quarter of 2001. Compared sequentially, the second quarter of 2002 capacity utilization figures represented a slight decline southbound and a meaningful increase northbound from the first quarter when deployed vessels were utilized 76.3% southbound and 18.3% northbound. The Company had an average of 179 tractor units operating on the mainland during the quarter, generating an average of 9,370 miles per month of which 81.4% were loaded, an improvement in both productivity and efficiency from the year earlier period (8,814 miles and 77.8% loaded, respectively) as well as sequentially from the first quarter of 2002 (9,076 miles and 79.2% loaded, respectively).
The Company's operating loss for the second quarter ended June 30, 2002 narrowed significantly to $461,949 from an operating loss of $4,131,848 in the year earlier period. This improvement was due to discontinuing the direct Northeast service, reductions in headcount and equipment, other cost-cutting initiatives and the absence of the $667,335 dry-docking charge that burdened the year earlier period. Compared sequentially to the first quarter, operating loss improved by $57,076. As a result of the above, Trailer Bridge had an operating ratio of 102.5% during the second quarter of 2002 compared to 119.1% during the year earlier period and 103.0% sequentially during the first quarter. Net interest expense of $806,489 was down slightly from the year earlier period. Trailer Bridge also realized a net gain of $133,867 from equipment sales during the quarter compared to a loss of $218,419 from equipment sales during the year earlier quarter.
For the second quarter ended June 30, 2002, Trailer Bridge's loss before income taxes was $1,130,298, an improvement of $4,030,647 compared to the $5,160,945 pre-tax loss in the second quarter of 2001. Sequentially compared to the first quarter, the pre-tax loss improved by $180,236. After a full valuation allowance for income tax credits, the net loss for the second quarter remained at $1,130,298, or $.12 per share, as compared to a net loss of $5,160,945, or $.53 per share for the year earlier period and a net loss of $1,310,534, or $.13 per share sequentially in the first quarter.
Trailer Bridge has experienced a significant reduction in operating losses since early 2002 driven by the previously disclosed actions taken at the end of last year. While no one month should be looked at in isolation, the intra-quarter trend in the second quarter was encouraging with both May and June showing profits.
The overall second quarter results build on the first quarter results, which themselves were encouraging given the market conditions at the time. Similar to the first quarter, the year-to-year comparisons for the second quarter show operating expense reductions from implementing various actions were more than twice the revenue reduction.
At June 30, 2002, Trailer Bridge had total cash of $2,143,679 and current assets of $14,271,126, slightly below current liabilities of $14,489,570. Compared sequentially to March 31, 2002, that represents an increase of $1,986,872 in cash and $4,766,811 in working capital. Trailer Bridge's working capital has improved even more dramatically since the beginning of the year. The Company believes its liquidity is more than sufficient to meet all of its obligations, including all scheduled long-term principal payments. Trailer Bridge has received a formal waiver of all past financial covenant violations through the end of 2001 from its senior lender, has remained in compliance with the new, reset financial covenants during the first and second quarter of 2002 and believes it will maintain compliance going forward.
Related to the previously disclosed appeal by the Company of the Nasdaq staff notification regarding the delisting of the Company's common stock from the Nasdaq National Stock Market, on June 27, 2002 the Company had a hearing before the listing qualification panel, where it proposed a course of action to attain full compliance with the applicable maintenance standard. The Company proposed to issue $20.3 million of non-convertible preferred stock in payment of an equal face amount of the Company's debt to its affiliate Kadampanattu Corp. This transaction has been approved by both the Company and Kadampanattu Corp. and will be consummated immediately upon a decision of the listing qualification panel that such transaction cures the Company's non-compliance with NASDAQ maintenance standards thereby permitting the Company's continued listing on the NASDAQ National Stock Market. The Company has not yet received the decision of the listing qualification panel.
John D. McCown, Chairman & CEO, said, "We are pleased with the continuing improved results from the array of initiatives management has implemented and grateful for the tireless efforts of the entire Trailer Bridge team. Importantly, the market conditions for increasingly profitable operations are now at hand. We see it in the trends of our various indicators. The bubble that characterized a unique and specific business cycle is dissipating and I believe that will lead to sequential improvement in our actual results for many quarters to come."
Trailer Bridge will discuss second quarter results in a conference call at 11:00 A.M. (Eastern Time) on Monday, August 12th. The dial in number is 800-863-1575. 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 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, severe weather, changes
in demand for transportation services offered by the Company, capacity
conditions in the Puerto Rico lane and changes in rate levels for transportation
services offered by the Company.
TRAILER BRIDGE, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months
Ended June 30,
--------------------------------
2002 2001
--------------- --------------
OPERATING REVENUES $ 18,116,637 $ 21,659,184
OPERATING EXPENSES:
Salaries wages,
and benefits 3,541,216 4,355,301
Rent and purchased
transportation:
Related Party 1,829,100 1,829,100
Other 4,813,000 6,773,095
Fuel 1,867,839 2,949,903
Operating and maintenance
(exclusive of depreciation
shown separately below) 3,618,777 6,356,696
Taxes and licenses 96,462 236,668
Insurance and claims 838,624 621,217
Communications and utilities 166,009 157,714
Depreciation and amortization 825,676 1,224,208
Other operating expenses 981,883 1,287,130
--------------- --------------
18,578,586 25,791,032
--------------- --------------
OPERATING LOSS (461,949) (4,131,848)
NONOPERATING INCOME (EXPENSE):
Interest expense, net (806,489) (810,678)
Gain on sale and other, net 138,140 (218,419)
--------------- --------------
(668,349) (1,029,097)
--------------- --------------
LOSS BEFORE BENEFIT
FOR INCOME TAXES (1,130,298) (5,160,945)
BENEFIT FOR INCOME TAXES - -
--------------- --------------
NET LOSS $ (1,130,298) $ (5,160,945)
=============== ==============
NET LOSS PER
SHARE $ (0.12) $ (0.53)
=============== ==============
WEIGHTED AVERAGE
SHARES OUTSTANDING 9,777,500 9,777,500
=============== ==============
Six Months
Ended June 30,
-----------------------------------
2002 2001
--------------- -----------------
OPERATING REVENUES $35,596,763 $ 42,295,897
OPERATING EXPENSES:
Salaries wages,
and benefits 7,514,580 8,814,694
Rent and purchased
transportation:
Related Party 3,638,100 3,638,100
Other 9,207,201 13,614,201
Fuel 3,484,162 5,800,790
Operating and maintenance
(exclusive of depreciation
shown separately below) 7,635,504 12,404,450
Taxes and licenses 276,847 418,636
Insurance and claims 1,464,395 1,257,289
Communications and utilities 324,723 327,753
Depreciation and amortization 1,746,266 2,522,410
Other operating expenses 1,285,959 2,161,596
--------------- -----------------
36,577,737 50,959,919
--------------- -----------------
OPERATING LOSS (980,974) (8,664,022)
NONOPERATING INCOME (EXPENSE):
Interest expense, net (1,529,636) (1,684,540)
Gain on sale and other, net 69,778 (186,536)
--------------- -----------------
(1,459,858) (1,871,076)
--------------- -----------------
LOSS BEFORE BENEFIT
FOR INCOME TAXES (2,440,832) (10,535,098)
BENEFIT FOR INCOME TAXES - -
--------------- -----------------
NET LOSS $ (2,440,832) $ (10,535,098)
=============== =================
NET LOSS PER
SHARE $ (0.25) $ (1.08)
=============== =================
WEIGHTED AVERAGE
SHARES OUTSTANDING 9,777,500 9,777,500
=============== =================
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