Trailer Bridge, Inc. (NASDAQ Global Market: TRBR) today
announced unaudited financial results for its second quarter and
six months ended June 30, 2011 (see attached tables).
Operational Review
The Company's deployed vessel capacity utilization during the
second quarter was 91.2% southbound and 24.1% northbound, compared
to 100.1% and 29.5%, respectively, during the second quarter of
2010, and 88.8% and 22.6%, respectively, sequentially from the
first quarter of 2011.
Second Quarter Financial Review
- The Company had revenue of $29.0
million during the quarter, compared to $31.7 million in the prior
year period. Charter revenues declined to $0.6 million from $0.9
million in the prior year period, but rose by $0.5 million
sequentially from the first quarter of 2011.
- The Company reported an operating loss
of $1.1 million in the second quarter of 2011 compared to operating
income of $3.4 million in the prior year period and an operating
loss of $8.0 million in the first quarter of 2011.
- Net loss for the second quarter of 2011
was $3.6 million, or $0.30 per basic and diluted share, compared to
net income of $0.9 million, or $0.07 per basic and diluted share,
in the prior-year period. Increased fuel prices drove the net fuel
expense to $2.2 million, up $1.1 million over the prior-year
period. Adjusted EBITDA, as detailed in the accompanying table, was
$1.2 million in the second quarter of 2011.
Six Month Financial Review
- The Company had revenue of $53.8
million during the first six months of 2011, compared to $60.5
million in the prior year period. Charter revenues during the
period declined to $0.6 million from $2.2 million in the prior year
period.
- The Company reported an operating loss
of $9.1 million for the first six months of 2011 compared to
operating income of $5.6 million in the prior year period.
- Net loss for the first six months of
2011 was $14.0 million, or $1.17 per basic and diluted share,
compared to net income of $0.6 million, or $0.05 per basic and
diluted share, in the prior-year period. Adjusted EBITDA, as
detailed in the accompanying table, was $1.6 million in the six
months ended June 30, 2011.
- Each of the Company’s two roll-on,
roll-off vessels was sequentially out of service as work related to
five-year regulatory requirements was being performed. The Company
resumed its regular deployment in late April. One of the Company’s
Triplestack Box Carrier® vessels was dry-docked in the second
quarter of 2011. Trailer Bridge incurred a total of $6.9 million in
expense related to the dry-docking of these vessels, of this amount
$6.6 million was incurred in the first quarter of 2011 and the
remaining $0.3 million in the second quarter of 2011. There were no
dry-docking expenses in the prior year periods.
Refinancing Status
The Company’s refinancing efforts are ongoing. The Company
continues actively working with interested lenders and its advisors
to refinance the $82.5 million in public notes (“Notes”) due in
November 2011 and other indebtedness of the Company. The Company is
exploring a number of options, that might involve the private or
public lending market and may include an equity component, and that
might result in a change of control. The interest rate the Company
pays on its overall debt will likely be higher under such
refinancing than previously anticipated. In the event the Company
is not able to refinance the Notes, the Company’s finances and
ability to operate would be severely impaired and the Company could
be required to seek protection under federal bankruptcy laws.
Financial Position
At June 30, 2011, the Company had cash balances of $0.2 million
and working capital deficit of $88.6 million due to the $82.5
million in Notes due in November 2011 as well as the Company’s Term
Loan debt being classified as current liabilities. As of June 30,
2011, the Company had drawn approximately $5.0 million on its $10.0
million revolving credit facility, and, based upon eligible
receivables, had $1.8 million of unused availability left under
this facility. During the six months ended June 30, 2011, net cash
used in operating activities was $13.2 million.
About Trailer Bridge, Inc.
Trailer Bridge provides integrated trucking and marine freight
service to and from all points in the lower 48 states and Puerto
Rico and Dominican Republic, bringing efficiency, service, security
and environmental and safety benefits to domestic cargo in that
traffic lane. This total transportation system utilizes its own
trucks, drivers, trailers, containers and U.S. flag vessels to link
the mainland with Puerto Rico via marine facilities in
Jacksonville, San Juan and Puerto Plata. 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 and its asset utilization. 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 changes in
demand for transportation services offered by the Company, the
Company’s ability to successfully operate its business, the
Company’s ability to refinance its existing maturing debt,
maintenance of its revolving credit facility, changes in rate
levels for transportation services offered by the Company, changes
in the cost of fuel, unfavorable outcomes from the United States
Department of Justice (“DOJ”) investigation and related class or
individual actions, economic recessions, de-listing from the Nasdaq
stock exchange, equipment and driver condition and availability and
severe weather as well the ability to retain and/or attract the
necessary personnel and maintain necessary vendor
relationships.
TRAILER BRIDGE, INC.
CONDENSED STATEMENTS OF
OPERATIONS
(unaudited)
Three Months Ended
Six Months Ended June 30, June 30, 2011
2010 2011 2010 OPERATING REVENUES $ 29,000,936
$ 31,656,653 $ 53,814,883 $ 60,501,618 OPERATING EXPENSES:
Salaries, wages, and benefits 4,117,729 4,174,077 7,630,623
8,213,832 Purchased transportation and other rent 8,583,890
7,890,464 15,854,229 15,065,666 Fuel 5,652,241 4,406,820 10,730,160
8,700,474
Operating and maintenance (exclusive of
depreciation & dry-docking shown separately
below)
7,215,871 7,590,395 13,521,349 14,148,476 Dry-docking 290,031 -
6,900,293 - Taxes and licenses 112,431 136,645 250,730 315,469
Insurance and claims 769,363 797,625 1,537,677 1,569,557
Communications and utilities 202,004 177,754 387,574 349,543
Depreciation and amortization 1,589,805 1,552,360 3,152,830
3,093,103 (Gain) loss on sale of property and equipment (2,642 )
4,852 (3,420 ) 26,196 Other operating expenses 1,599,369
1,534,839 2,997,136
3,397,772 30,130,092 28,265,831
62,959,181 54,880,088 OPERATING (LOSS)
INCOME (1,129,156 ) 3,390,822 (9,144,298 ) 5,621,530
NONOPERATING (EXPENSE) INCOME: Interest expense (2,513,660 )
(2,490,697 ) (4,882,640 ) (5,025,888 ) Interest income 1,297
4,537 2,741 8,923
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES (3,641,519 )
904,662 (14,024,197 ) 604,565 PROVISION FOR INCOME TAXES
(7,200 ) (7,200 ) (14,400 ) (14,670 )
NET (LOSS) INCOME $ (3,648,719 ) $ 897,462 $ (14,038,597 ) $
589,895 PER SHARE AMOUNTS: NET (LOSS) INCOME
PER SHARE BASIC $ (0.30 ) $ 0.07 $ (1.17 ) $ 0.05 NET
(LOSS) INCOME PER SHARE DILUTED $ (0.30 ) $ 0.07 $ (1.17 ) $
0.05
TRAILER BRIDGE, INC.
CONDENSED BALANCE SHEETS
June 30,
December 31, 2011 2010 (unaudited) ASSETS Current Assets:
Cash and cash equivalents $ 173,164 $ 11,481,965 Trade receivables,
less allowance for doubtful accounts of $1,062,272 and $1,065,955
14,798,131 13,022,057 Prepaid and other current assets 2,656,900
2,397,948 Deferred income taxes, net 225,645
225,645 Total current assets 17,853,840 27,127,615
Property and equipment, net 81,229,126 82,631,050 Reserve fund for
long-term debt 4,640,742 4,638,215 Other assets 1,899,370
2,004,426 TOTAL ASSETS $ 105,623,078 $
116,401,306 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities: Accounts payable $ 7,306,084 $ 7,411,181
Accrued liabilities 3,840,335 4,725,030 Unearned revenue 1,621,478
1,410,963 Current portion of long-term debt 93,711,161
85,374,700 Total current liabilities
106,479,058 98,921,874 Long-term debt, less current portion
13,065,882 17,795,827 TOTAL LIABILITIES
119,544,940 116,717,701
Commitments and Contingencies Stockholders' Deficit:
Preferred stock, $.01 par value, 1,000,000, shares authorized; no
shares issued or outstanding - - Common stock, $.01 par value,
20,000,000 shares authorized; 12,102,587 shares issued; 12,016,681
shares outstanding at June 30, 2011 and December 31, 2010 121,026
121,026 Treasury stock, at cost, 85,906 shares at June 30, 2011 and
December 31, 2010 (318,140 ) (318,140 ) Additional paid-in capital
55,046,773 54,613,643 Capital deficit (68,771,521 )
(54,732,924 ) TOTAL STOCKHOLDERS' DEFICIT (13,921,862 )
(316,395 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $
105,623,078 $ 116,401,306
TRAILER BRIDGE, INC.
CONDENSED STATEMENTS OF CASH
FLOWS
SIX MONTHS ENDED JUNE 30,
2011
2010 (unaudited) (unaudited) Operating activities: Net (loss)
income $ (14,038,597 ) $ 589,895
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating
activities:
Depreciation and amortization 3,152,830 3,093,103 Amortization of
loan costs 474,461 456,794 Non-cash stock compensation expense
433,128 452,143 Provision for doubtful accounts 451,388 347,325
(Gain) loss on sale of property and equipment (3,420 ) 26,196
(Increase) decrease in: Trade receivables (2,227,462 ) (2,899,760 )
Prepaid and other current assets (258,952 ) 755,827 Other assets
(384,004 ) 5,375 (Decrease) increase in: Accounts payable (105,097
) 3,411,814 Accrued liabilities (884,692 ) (1,487,655 ) Unearned
revenue 210,516 272,987 Net cash (used in) provided
by operating activities (13,179,901 ) 5,024,044
Investing activities: Purchases of property and
equipment (1,795,330 ) (1,024,661 ) Proceeds from sale of property
and equipment 59,917 48,038 Additions to other assets -
(385,999 ) Net cash used in investing activities
(1,735,413 ) (1,362,622 ) Financing
activities: Proceeds from revolving line of credit 20,248,603 -
Payments on revolving line of credit (15,204,737 ) Exercise of
stock options - (5,562 ) Principal payments on notes payable
(1,437,353 ) (2,453,795 ) Purchase of treasury stock -
(106,699 ) Net cash provided by (used in) financing
activities 3,606,513 (2,566,056 ) Net
(decrease) increase in cash and cash equivalents (11,308,801 )
1,095,366 Cash and cash equivalents, beginning of the period
11,481,965 10,987,379 Cash and cash
equivalents, end of period $ 173,164 $ 12,082,745
Supplemental cash flow information: Cash paid for interest $
4,912,064 $ 5,081,979
TRAILER BRIDGE, INC.
RECONCILIATION OF GAAP NET (LOSS)
INCOME, TO EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION & AMORTIZATION; AND
ADJUSTED EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION & AMORTIZATION
(1)
(UNAUDITED)
Three months ended Three
months ended Six months ended Six months ended
June 30,
2011 June 30, 2010 June 30, 2011
June 30, 2010 GAAP, Net (loss) income $
(3,648,719 ) $ 897,462 $ (14,038,597 ) $ 589,895 Net interest
expense 2,512,363 2,486,160 4,879,899 5,016,965 Provision for
income taxes 7,200 7,200 14,400 14,670 Depreciation and
amortization 1,589,805 1,552,360
3,152,830 3,093,103 Non-GAAP, EBITDA $ 460,649
$ 4,943,182 $ (5,991,468 ) $ 8,714,633
Adjustments: Dry-docking 290,031 - 6,900,293 - Severance, including
officers 213,046 - 213,046 - Stock compensation 208,123 226,071
433,130 452,143 Anti-trust related legal expense 9,370 145,529
34,630 525,431 (Gain) loss on asset sales (2,642 )
4,852 (3,420 ) 26,196 Total Adjustments
717,928 376,452 7,577,679
1,003,770 Non-GAAP, Adjusted EBITDA $ 1,178,577
$ 5,319,634 $ 1,586,211 $ 9,718,403
Other financial measures: EBITDA margin 1.6 % 15.6 % (11.1
)% 14.4 % Adjusted EBITDA margin 4.1 % 16.8 % 2.9 % 16.1 % Net debt
to adjusted EBITDA 12.8x 3.9x 12.8x 3.9x Adjusted EBITDA to
interest expense 0.5x 2.1x 0.3x 1.9x
Use of Non-GAAP measures
(1) The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). The Company
also believes that the presentation of certain non-GAAP measures,
i.e., results excluding certain costs and expenses, provides useful
information for the understanding of its ongoing operations and
enables investors to focus on comparisons of operating performance
from period to period without the impact of significant special
items. Non-GAAP measures are reconciled in the accompanying
financial table. The Company cautions that non-GAAP measures should
be considered in addition to, but not as a substitute for the
Company’s reported GAAP results.
Adjusted EBITDA is calculated by adding back legal expenses
associated with dry-docking, non-recurring severance charges,
non-cash compensation charges, the anti-trust litigation, and
loss/gain on asset sales. Adjusted EBITDA was calculated on a
twelve month trailing rate for purposes of calculating net debt to
adjusted EBITDA. Adjusted EBITDA for the twelve months trailing
June 30, 2011 and 2010 was $7,978,127 and $22,792,857,
respectively.
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