Trailer Bridge Reports Third Quarter Results
9 November 1998
Trailer Bridge Reports Third Quarter Results
JACKSONVILLE, Fla., Nov. 6 -- Trailer Bridge, Inc.,
reported total revenue of $18,851,977 for the three months
ended September 30, 1998, an increase of $2,175,877 or 13.0% compared to the
third quarter of 1997. Based upon the deployment of two additional vessels
throughout the entire third quarter, Trailer Bridge had 54% more vessel
capacity compared to the third quarter of 1997. Core trailer volume to Puerto
Rico increased 27.0% compared to the year earlier period and total car and
other vehicle volume was up 37.9% compared to the year earlier period. As a
result, core trailer revenue to Puerto Rico increased $1,745,958 or 17.9%
compared to the year earlier period and car and other vehicle revenue
increased $667,951 or 26.0% compared to the year earlier period. Compared to
the second quarter of 1998, core trailer volume to Puerto Rico increased 29.0%
and total car and other vehicle volume decreased 11.9%. Revenue from shipper
owned or leased equipment moving to Puerto Rico increased $10,210 or 0.9%.
Trailer volume from Puerto Rico increased 9.4% while related revenue decreased
$31,530 or 1.8% compared to the year earlier period. Compared to the second
quarter of 1998, trailer volume from Puerto Rico decreased 14.1%. Non-Puerto
Rico revenue of $1,053,101 represented decreases of 13.4% and 2.5% from the
third quarter of 1997 and the second quarter of 1998, respectively.
Third quarter operating loss was $397,792, a decrease of $1,914,294 from
the $1,516,502 operating income in the year earlier period and a decrease of
$808,664 from the operating income in the second quarter of 1998. Operating
income was lower compared to the year earlier period due to both reduced rate
levels and reduced capacity utilization levels on the 54% higher vessel
capacity offered. Compared to the second quarter of 1998, operating income was
lower primarily due to continuing competitive pressures on overall freight
rates in the Puerto Rico market. As a result, Trailer Bridge's operating
ratio was 102.1% during the third quarter of 1998 compared to the 90.9%
operating ratio during the year earlier quarter and the 97.8% during the
second quarter of 1998. Net interest expense of $305,025 was up $236,956 from
the year earlier period that included significant interest income on short-
term investments. During the quarter, Trailer Bridge also had a gain of
$61,600 related to the sale of older trailer equipment.
Operating expenses for the third quarter were reduced by a $600,000
non-recurring forgiveness of barge charterhire from Kadampanattu Corp. to
Trailer Bridge in recognition of the impact of Hurricane Georges and in
consideration of the efforts of Trailer Bridge to recover and repair the San
Juan triple-deck ramp structure utilized by the two triple-deck barges. The
ramp structure is owned by Kadampanattu Corp. and, in conjunction with its
bareboat charter agreement relating to the two vessels, Trailer Bridge has
unlimited use of the ramp structure during the term of the charter agreement.
On September 21, the floating ramp structure became partially submerged due to
the storm. Following an initial period of disruption and delay, Trailer Bridge
developed alternative methods of discharging and re-loading the two roll-on,
roll-off vessels and those vessels are now back on their weekly schedule. The
$600,000 forgiveness of charterhire is slightly below the direct impact
Trailer Bridge estimates the loss of use of the ramp structure due to
Hurricane Georges had on its financial results during the third quarter. The
three 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. Efforts are continuing to refloat the ramp structure but
in the interim the cost related to discharging and re-loading the two roll-on,
roll-off vessels using the alternative methods will be increased. The terms
of the charter agreement did not obligate Kadampanattu Corp. to forgive the
charterhire and Trailer Bridge does not expect that similar action will be
taken in the future.
Loss before income taxes for the third quarter was $641,217, a decrease of
$2,006,073 from the year earlier period. After income taxes, net loss for the
third quarter was $435,605, which was significantly below proforma net income
of $2,445,963 after a nonrecurring tax credit for the year earlier period
during which Trailer Bridge operated as an S Corporation. Net loss per share
was $.04 for the third quarter compared to net income per share of $.28 for
the year earlier period and $.02 for the second quarter of 1998.
The Company's financial condition remained strong at the end of the
quarter. At September 30, 1998, available cash amounted to $3.9 million,
working capital was $6.1 million and stockholders equity was equal to
$33.6 million.
Total volume to and from Puerto Rico including cars and other vehicles
grew 23.2% compared to last year, roughly four-tenths of the 54% increase in
vessel capacity growth. Total Puerto Rico revenue only increased 15.1%,
implying a 6.6% 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. Compared to the second quarter of 1998, the
overall average yield on Trailer Bridge's Puerto Rico business declined 5.3%.
The Company's overall vessel capacity utilization during the third quarter was
51%, slightly above the second quarter level of 48% but well below the 62%
utilization during the third quarter of 1997 and the benchmark utilization of
74% achieved during all of 1995.
John D. McCown, Chairman and CEO, said: "In a flat market characterized by
ratecutting often inconsistent with carriers' underlying costs, we are
re-doubling our efforts to grow prudently. We have identified improved
processes and efficiencies designed to drive down the operating costs we
experienced during the third quarter by 2%. The flexibility and resiliency of
our transportation system allows us to move towards our long term objectives
in all market conditions.
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.
TRAILER BRIDGE, INC.
Summary Operating Statement for the
Three Months Ended September 30, 1998
(Unaudited)
Three Months 1998 1997
Revenues 18,851,977 16,676,100
Operating (loss) income (397,792) 1,516,502
Net (loss) income (435,605) 2,445,963
Average shares 9,777,500 8,713,641
Net (loss) income per share (0.04) 0.28