1998 Second Quarter ResultsTrailer Bridge, Inc. Press Release Contact: Mark A. Tanner Trailer Bridge Reports Second Quarter Results JACKSONVILLE, Fla. -- Trailer Bridge, Inc. (TRBR) reported total revenue of $18,408,322 for the three months ended June 30, 1998, an increase of $2,237,635 or 13.8% compared to the second quarter of 1997. Core trailer volume to Puerto Rico increased 29.2% compared to the year earlier period and total car and other vehicle volume was up 21.6% compared to the year earlier period. As a result, core trailer revenue to Puerto Rico increased $1,559,341 or 19.5% compared to the year earlier period and car and other vehicle revenue increased $692,766 or 20.8% compared to the year earlier period. Compared to the first quarter of 1998, core trailer volume to Puerto Rico and total car and other vehicle volume increased 16.0% and 13.5%, respectively. Revenue from shipper owned or leased equipment moving to Puerto Rico increased $183,380 or 17.0% primarily due to an increase in flatbed volume. While trailer volume from Puerto Rico increased 22.1%, related revenue increased only $170,120 or 7.8% compared to the year earlier period due to continued rate pressure on the limited volumes moving inbound from Puerto Rico. Non-Puerto Rico revenue of $1,080,454 represented a decrease of 24.2% as available tractor capacity was utilized more in Puerto Rico traffic lanes. Second quarter operating income was $410,872, a decrease of $1,384,368 or 77.1% from the $1,795,240 operating income before a non-recurring charge in the year earlier period. Operating income was lower primarily because, while total revenue was up 13.8%, Trailer Bridge incurred additional costs related to the operation of 54% more vessel capacity during most of the quarter. In addition, the continuing competitive pressures on overall freight rates mitigated the favorable effect that would have otherwise resulted from the 32.2% and 22.1% increases in total trailer volume to and from Puerto Rico. As a result, Trailer Bridge's operating ratio was 97.8% during the second quarter of 1998 compared to the 88.9% operating ratio during the year earlier quarter, exclusive of the non-recurring charge. Net interest expense of $203,100 was down $56,465 or 21.8% as a result of an increase in earnings from temporary investments and the capitalization of interest related to the construction of five new vessels. During the quarter, Trailer Bridge also had a gain of $100,455 related to the sale of older trailer equipment. Income before income taxes for the second quarter was $308,227, a decrease of $1,229,124 or 80.0% from the year earlier period, exclusive of the non- recurring charge. After income taxes, net income for the second quarter was $149,098, or 84.0% below proforma net income of $933,785, for the year earlier period, exclusive of the non-recurring charge, during which Trailer Bridge operated as an S Corporation. Net income per share was $.02 for the second quarter compared to $.14 for the year earlier period, exclusive of the non- recurring charge. The Company's financial condition remained strong at the end of the quarter. At June 30, 1998, available cash amounted to $4.2 million, working capital was $4.7 million and stockholders equity was equal to $34.1 million. On July 21, 1998, BankBoston approved a $25 million revolving credit/term loan facility that can be utilized for general corporate purposes. Total volume to and from Puerto Rico including cars and other vehicles grew 27.1% compared to last year, roughly one-half the 54% increase in vessel capacity growth. Total Puerto Rico revenue only increased 17.8% over prior years second quarter, implying a 7.5% reduction in the overall average yield on Trailer Bridge's Puerto Rico business compared to the same period last year due to heightened rate activity in all segments. The Company's overall vessel capacity utilization during the quarter was 48%, below the first quarter level of 52% and well below the benchmark 74% capacity utilization achieved in 1995. John D. McCown, Chairman and CEO, said: "Puerto Rico freight market conditions are adverse, both in terms of flat overall volume southbound and intense price activity in both directions. Our own 7.5% decrease in average revenue per core load moving to Puerto Rico understates the actual rate compression as a larger percentage of our loads were 53' units and our average inland miles declined. It is, however, in market conditions and transition phases such as this that I believe our superior transportation system proves its effectiveness. We now have two Triplestack Box Carriers(TM) -- the CHICAGO BRIDGE and CHARLOTTE BRIDGE -- fully deployed in Puerto Rico. As we continue to build volume and deploy the ATLANTA BRIDGE, MEMPHIS BRIDGE and BROOKLYN BRIDGE, all now under construction, we will build upon and further improve our low-cost and high-value transportation system. Our focus will continue to be on the long term sustainable benefits our innovative transportation system offers to customers, both in the near term and well into the next century." Trailer Bridge provides truckload service to and from all points in the lower 48 states and Puerto Rico. This total transportation system utilizes its own trucks, drivers, trailers, containers, vessels and marine facilities in Jacksonville and San Juan. Trailer Bridge's founder and majority stockholder is Malcom P. McLean, the transportation pioneer who invented containerization forty years ago.
(a) Net of non-recurring charge.
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