1999 Third Quarter ResultsTrailer Bridge, Inc. Press Release Contact: Mark A. Tanner Trailer Bridge Reports Third Quarter Results JACKSONVILLE, Fla. -- Trailer Bridge, Inc. (TRBR) reported total revenue of $20,625,799 for the three months ended September 30, 1999, an increase of $1,773,822 or 9.4% compared to the third quarter of 1998. Trailer Bridge had 7.5% less overall vessel capacity deployed to Puerto Rico compared to the third quarter of 1998 primarily due to one less voyage of Trailer Bridge’s large roll-on, roll-off vessels during the period because of Hurricane Floyd. The tugboat that was towing Trailer Bridge’s vessel the week of the storm suffered a casualty and needed to be replaced. While neither Trailer Bridge’s vessel nor its cargo was damaged by this marine casualty, the time and recovery efforts of substituting a new tug caused a major schedule disruption that resulted in one less roll-on, roll-off voyage. Core trailer volume to Puerto Rico increased .5% compared to the year earlier period and total car and other vehicle volume was up 15.3% compared to the year earlier period. As a result, core trailer revenue to Puerto Rico increased $364,726 or 3.2% compared to the year earlier period and car and other vehicle revenue increased $281,185 or 8.7% compared to the year earlier period. Compared to the second quarter of 1999, core trailer volume to Puerto Rico decreased 11.4% and total car and other vehicle volume decreased 18.9%. Trailer Bridge had 5.1% less capacity deployed to Puerto Rico compared to the second quarter of 1999 due to the loss of a voyage referenced above. For the third quarter, revenue from shipper owned or leased equipment moving to Puerto Rico decreased $205,216 or 18.0% from the year earlier period. Volume from Puerto Rico increased 37.6% while related revenue increased $569,585 or 31.2% compared to the third quarter of 1998. Compared to the second quarter of 1999, volume from Puerto Rico increased 2.0%. Total non-Puerto Rico revenue of $1,893,661 represented an increase of 67.6% from the third quarter of 1998 and an increase of 43.6% from the second quarter of 1999. While non-Puerto Rico truckload revenue decreased 4.0% compared to the second quarter, coastwise revenue on the Atlantic Highway increased $146,694 or 32.4% from the second quarter of 1999. Third
quarter operating income was $1,464,174, an increase of $1,861,966 from
the $397,792 operating loss in the year earlier period and an increase of
$1,323,757 from the operating income in the second quarter of 1999.
Operating income during the period was significantly impacted by
two non-recurring events that were partially offsetting.
During the period Trailer Bridge recognized an insurance receivable
relating to a marine casualty of the ramp structure formerly used in
Jacksonville which had the effect of reducing operations and maintenance
costs by $3,710,000. During
the quarter, Trailer Bridge submitted this claim to its insurers for
payment based upon a constructive total loss by an insured peril.
Trailer Bridge has received no payment on this claim.
This non-recurring benefit was partially offset by the
non-recurring revenue effect of the lost voyage described above. Revenue
for the preceding roll-on, roll-off voyage was $1,108,660.
Continuing rate pressure in the Puerto Rico freight market further
offset the non-recurring insurance amount.
Compared to the second quarter of 1999, operating income was higher
primarily due to the insurance amount offset by the revenue effect of the
lost voyage described above and reduced utilization levels in the third
quarter as growth slowed in the Puerto Rico market.
As a result of the above, the operating ratio was 92.9% during the
third quarter of 1999 compared to the 102.1% operating ratio during the
year earlier period and the 99.4% during the second quarter of 1999.
Net interest expense of $889,423 was up $584,398 from the year
earlier period due to increased debt.
During the third quarter of 1999, Trailer Bridge also had a gain of
$4,008 related to the sale of older trailer equipment. Income
before income taxes for the third quarter was $578,759, an increase of
$1,219,976 from the year earlier period.
After income taxes, net income for the third quarter was $345,617
compared to net loss of $435,605 for the year earlier period.
Net income per share was $.04 for the third quarter compared to net
loss per share of $.04 for the year earlier period and net loss per share
of $.04 for the second quarter of 1999. At
September 30, 1999, cash amounted to $2.0 million and stockholders equity
was equal to $29.6 million. For
the third quarter of 1999, total volume to Puerto Rico including cars and
other vehicles decreased 1.7% compared to the same period last year, above
the 7.5% decrease in deployed southbound vessel capacity.
Total volumes from Puerto Rico grew 37.8% or well above the 2.7%
decrease in deployed northbound vessel capacity.
During that period, total revenue to and from Puerto Rico increased
2.8% and 31.2%, respectively, implying an increase of 4.6% and a decrease
of 4.8%, respectively, in the overall average yield on Trailer Bridge’s
Puerto Rico business compared to the same period last year.
Compared to the second quarter of 1999, the overall average yield
on Trailer Bridge’s business to Puerto Rico was unchanged and the
overall average yield on business from Puerto Rico decreased 6.3%.
The Company’s Puerto Rico deployed vessel capacity utilization
during the third quarter was 82.7% to Puerto Rico and 32.8% from Puerto
Rico. These were above
comparable figures of 77.8% to Puerto Rico and 23.2% from Puerto Rico
during the third quarter of 1998. However,
compared to second quarter capacity utilization of 90.6% to Puerto Rico
and 30.6% from Puerto Rico, the third quarter represented a meaningful
decline in the heavier southbound lane and a slight increase northbound. The third quarter capacity utilization levels continue to be
below the benchmark utilization of 96.0% and 51.6% to and from Puerto Rico
achieved during all of 1995. During the third quarter of 1999, total volume on
the Atlantic Highway leg increased 54.6% and 65.4% southbound and
northbound, respectively, compared to the second quarter.
Overall vessel capacity utilization on the Atlantic Highway segment
was 35.2% and 18.5% southbound and northbound, respectively, in the third
quarter compared to 19.2% and 10.3% in the second quarter.
Total capacity deployed on the Atlantic Highway segment was 11.5%
less in the third quarter than the second quarter as a result of several
cancelled sailings due to the strong hurricane activity along the eastern
seaboard in September. The
volume increase from the second quarter to the third quarter was below
internal requirements, partly due to the weather disruption in September.
This, and the ability to take advantage of the seasonally stronger
Puerto Rico market in the fourth quarter, led to a decision to re-align
the deployment of the one vessel that was effectively dedicated to the
Atlantic Highway. Beginning
in early October, this vessel sailed directly from New York to San Juan,
in part carrying cargo that previously moved on the Atlantic Highway
segment as well as additional Puerto Rico cargo.
The capacity utilization of this vessel in this re-aligned
deployment has exceeded its previous utilization and Trailer Bridge has
presently ceased offering Atlantic Highway service. Trailer Bridge will
continue to evaluate its deployments in light of market and seasonal
conditions.
John D. McCown, Chairman and CEO, said: “We are
disappointed and unhappy with these results.
The market conditions in Puerto Rico are turbulent but I believe
this is a transitory problem that will be corrected.
During this period, we will continue to take actions to lower our
operating costs per unit to improve upon our sound business model.”
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, New York and San Juan.
Trailer Bridge’s founder and majority stockholder is Malcom P.
McLean, the transportation pioneer who invented containerization forty
years ago. 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, changes in demand for transportation services offered by the Company, and changes in rate levels for transportation services offered by the Company.
TRAILER BRIDGE, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Ended September 30,
1999 1998
OPERATING REVENUES.................... $20,625,799 $18,851,977
OPERATING EXPENSES:
Salaries, wages, and benefits........ 4,109,261 4,149,018
Rent and purchased transportation:
Related Party....................... 1,849,200 1,249,200
Other............................... 6,276,954 5,121,110
Fuel................................. 1,776,631 1,361,319
Operating and maintenance
(exclusive of depreciation shown
separately below).................. 2,214,603 4,400,266
Taxes and licenses................... 161,548 94,486
Insurance and claims................. 231,355 490,345
Communications and utilities......... 262,607 210,467
Depreciation and amortization........ 1,214,478 933,162
Other operating expenses............. 1,064,988 1,240,396
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19,161,625 19,249,769
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OPERATING (LOSS) INCOME............... 1,464,174 (397,792)
NON OPERATING INCOME (EXPENSE):
Interest expense, net (889,423) (305,025)
Gain on sale of equipment, net 4,008 61,600
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(885,415) (243,425)
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(LOSS) INCOME BEFORE BENEFIT
(PROVISION) FOR INCOME TAXES 578,759 (641,217)
BENEFIT (PROVISION) FOR INCOME TAXES (233,142) 205,612
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NET (LOSS) INCOME 345,617 (435,605)
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NET (LOSS) INCOME PER SHARE........... $ 0.04 $ (0.04)
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WEIGHTED AVERAGE SHARES OUTSTANDING... 9,777,500 9,777,500
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