1998 Fourth Quarter ResultsTrailer Bridge, Inc. Press Release Contact: Mark A. Tanner Trailer Bridge Reports Fourth Quarter Results JACKSONVILLE, Fla. -- Trailer Bridge,
Inc. (TRBR)
reported total revenue of $23,632,942 for the three months
ended December 31, 1998, an increase of $6,537,218 or 38.2% compared to the
fourth quarter of 1997. Based upon the deployment of additional vessels,
Trailer Bridge had 67% more overall vessel capacity deployed to Puerto Rico
compared to the fourth quarter of 1997. Core trailer volume to Puerto Rico
increased 73.0% compared to the year earlier period and total car and other
vehicle volume was up 48.1% compared to the year earlier period. As a result,
core trailer revenue to Puerto Rico increased $5,531,531 or 61.1% compared to
the year earlier period and car and other vehicle revenue increased $987,847
or 26.7% compared to the year earlier period. Compared to the third quarter
of 1998, core trailer volume to Puerto Rico increased 20.5% and total car and
other vehicle volume increased 65.1%. For the fourth quarter, revenue from
shipper owned or leased equipment moving to Puerto Rico increased $232,889 or
23.1% from the year earlier period. Volume from Puerto Rico increased 27.1%
while related revenue increased $290,859 or 15.4% compared to the fourth
quarter of 1997. Compared to the third quarter of 1998, volume from Puerto
Rico increased 18.6%. Non-Puerto Rico revenue of $940,193 represented
decreases of 34.8% and 16.8% from the fourth quarter of 1997 and the third
quarter of 1998, respectively.
Fourth quarter operating loss was $3,344,771, a decrease of $4,997,923
from the $1,653,152 operating income in the year earlier period and a decrease
of $2,946,979 from the operating income in the third quarter of 1998.
Operating income was lower compared to the year earlier period due to
approximately $3.4 million of additional costs related to the disruption
resulting from the loss of use of the San Juan ramp structure due to Hurricane
Georges, reduced rate levels, year-end reserve adjustments, the impact of the
commencement of the new coastwise service and reduced overall capacity
utilization levels. Compared to the third quarter of 1998, operating income
was lower primarily due to the loss of use of the San Juan ramp structure and
the commencement of the new coastwise service. As a result, Trailer Bridge's
operating ratio was 114.2% during the fourth quarter of 1998 compared to the
90.3% operating ratio during the year earlier period and the 102.1% during the
third quarter of 1998. Net interest expense of $342,047 was up $384,465 from
the year earlier period that included significant interest income on short-
term investments. During the fourth quarter of 1998, Trailer Bridge also had
a gain of $16,690 related to the sale of older trailer equipment.
The $3,361,083 of estimated additional costs related to the
hurricane situation included $1,622,613 in operating and maintenance costs
(comprised primarily of stevedoring and port related items), $1,450,427 in
rent and purchased transportation (comprised primarily of terminal equipment
rental, trucking expense in San Juan and the U.S. and revenue equipment
rental), $117,954 in salaries and wages, $102,374 in insurance and claims and
$67,715 in communications and other operating expenses.
The inability to utilize the San Juan ramp necessitated alternative
methods of discharging and re-loading the two roll-on, roll-off vessels.
Instead of typical cargo operations of 14 to 16 hours at the Company's San
Juan terminal, the two roll-on, roll-off vessels utilized other terminals
where total cargo operations required 48 to 50 hours. In addition, the middle
deck of the roll-on, roll-off vessels remained inaccessible to trailers and
could be used only for vehicles, which resulted in the sub-optimum
utilization of one-third of vessel space. The reduction in discharging and
re-loading efficiency in San Juan resulted in schedule tightness due to the
additional port time that required most cargo operations to be performed
during the weekend where higher overtime rates applied. While only one voyage
of a roll-on, roll-off vessel was actually lost during the quarter, the
schedule tightness and uncertainty exacerbated costs beyond those directly
related to San Juan cargo operations, including trucking costs on the
mainland. The Company's goal during this period of disruption, which has
lasted longer than expected, was to continue to provide a high level of
service to customers despite certain adverse cost consequences. The new
Triplestack Box Carriers(TM) now deployed in Puerto Rico do not utilize the
floating ramp structure and were not adversely affected by Hurricane Georges.
The ramp structure was re-floated on January 11, 1999. Repairs to the tanks
and the concrete structure will allow it to be utilized for partial cargo
operations on or about March 19, 1999. Final preparations, including filling
remaining tanks with permanent flotation foam and re-assembling a portion of
the top concrete deck that was removed to reduce weight to aid in the re-
floatation, are expected to be complete by late March.
Loss before income taxes for the fourth quarter was $3,670,128, a
decrease of $5,366,749 from the year earlier period. After income taxes, net
loss for the fourth quarter was $2,298,679, which was significantly below net
income of $1,103,016 for the year earlier period. Net loss per share was $.24
the fourth quarter compared to net income per share of $.11 for the year
earlier period and net loss per share of $.04 for the third quarter of 1998.
At December 31, 1998, available cash amounted to $5.6 million,
working capital was $4.0 million and stockholders equity was equal to $31.3
million. For the fourth quarter of 1998, total volume to and from Puerto Rico
including cars and other vehicles grew 55.3% compared to the same period last
year, roughly eight-tenths of the 67% increase in vessel capacity growth.
During that period, total Puerto Rico revenue only increased 45.0%, implying a
6.6% reduction in the overall average yield on Trailer Bridge's Puerto Rico
business compared to the same period last year. Compared to the third quarter
of 1998, the overall average yield on Trailer Bridge's Puerto Rico business
increased 5.9%. The Company's Puerto Rico vessel capacity utilization during
the fourth quarter was 57%, above the third quarter level of 51% but well
below the 61% utilization during the fourth quarter of 1997 and the benchmark
utilization of 74% achieved during all of 1995.
John D. McCown, Chairman and CEO, said: ``We experienced significant
operational trauma due to the inability to utilize the San Juan ramp
structure. We are, however, now approaching the end of this six-month
ordeal. Looking beyond the first quarter that will also be adversely
effected by these costs, although to a lesser degree, I expect profitable
operations to resume. That expectation is grounded in the encouraging levels
and trends regarding both volume and yield and cost-cutting measures going
well beyond those items directly related to the San Juan ramp structure.''
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.
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.
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