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

RESULTS OF OPERATIONS:

Three Months Ended March 31, 1998 and 1997

Operating revenues decreased $98,663, or 0.6%, to $16.3 million during the three months ended March 31, 1998 from $16.4 million during the year earlier period. This decrease was due to a $203,137 (1.3%) decrease in Puerto Rico revenue to $15.2 million, partially offset by a $104,747 (9.8%) increase in non-Puerto Rico revenue. Core trailer revenue to Puerto Rico increased $649,679 (8.6%) and revenue from shipper owned or leased equipment increased $369,707 (41.1%) compared to the year earlier period but was offset by a $859,856 (19.5%) decrease in car and other vehicle revenue and a decrease of $331,760 (13.9%) in trailer revenue from Puerto Rico compared to the year earlier period.

Core trailer volume to Puerto Rico increased by 16.7% while total car and other vehicle volume was down 20.9% compared to the year earlier period. The reduction in total car and other vehicle volume consisted of a 41.5% decrease in used car volume, partially offset by an increase of 10.6% in new car volume. Trailer volume from Puerto Rico increased by 6.5% from the year earlier period, however related revenue decreased due to continued rate pressure on the limited volumes moving inbound from Puerto Rico.

Operating expenses increased $1.4 million for the three months ended march 31, 1998, from the year earlier period primarily as a result of an increase in rent and purchased transportation of $890,533 and an increase of $489,175 in salaries, wages and benefits partially offset by a decrease in fuel costs of $218,721.

The Company's operating income decreased $1.5 million (83.6%) to $286,042 compared $1.7 million compared to the same period last year. This resulted from total revenue which was flat while incurring approximately $900,000 in fixed marine costs related to the operation of the first new Triplestack Box Carrier during most of the quarter. The continuing weakness in used car volume and increasing competitive pressures on overall freight rates were also contributing factors. The Company's operating ratio declined to 98.3% during the three months ended March 31, 1998 from 89.4% during the year earlier period.

Net interest expense decreased $77,819 (29.5%) compared to the year earlier period as a result of increased interest income from temporary investments. The Company recorded a $28,510 gain on sales of older trailer equipment.

Income before taxes for the three months ended March 31, 1998 decreased $1.4 million (91.3%) to $128,955 from the year earlier period. After income taxes net income was $69,156 or $.01 per share compared to pro forma net income of $909,263 or $.14 per share for the year earlier period.

LIQUIDITY AND CAPITAL RESOURCES.

At March 31, 1998 cash amounted to $6.6 million, working capital was $5.9 million, and stockholders' equity amounted to $33.9 million. Net cash provided by operating activities was $1.0 million in the three months ended March 31, 1998 compared to $2.9 million in the year earlier period. The Company's operating cash flow of $1.0 million in the three months ended March 31, 1998 reflects $734,321 of depreciation. Net cash used in investing activities of $8.5 million in three month period ending March 31, 1998 is primarily related to capital expenditures.

Net cash used by financing activities of $176,728 in the three months ended March 31, 1998 reflects $807,607 in principal payments on notes payable and $201,320 in debt issuance costs, partially offset by $841,745 in proceeds from notes payable.

©1998 Trailer Bridge, Inc.