Trailer Bridge, Inc. (Nasdaq: TRBR) today announced
unaudited financial results for its third quarter and nine months
ended September 30, 2011 (see attached tables).
Operational Review
The Company’s primary business is to transport freight from its
origination point in the continental United States to San Juan,
Puerto Rico and Puerto Plata, Dominican Republic (“Southbound”) and
from San Juan, Puerto Rico and Puerto Plata, Dominican Republic to
its destination point in the continental United States
(“Northbound”).
The Company’s Southbound vessel capacity utilization improved to
93.6% for the three months ended September 30, 2011, compared to
90.3% for the three months ended September 30, 2010 and 91.2% for
the three months ended June 30, 2011. Southbound vessel capacity
thus far in the fourth quarter is 103.2% with the past 5 weeks
above the 100% mark.
The Company operates in an unbalanced trade lane, with the
majority of freight moving Southbound from the continental United
States to its two island destinations. Vessel capacity utilization
Northbound to the United States was 24.8% for the three months
ended September 30, 2011, compared to 25.6% for the three months
ended September 30, 2010 and 24.1% for the three months ended June
30, 2011.
Comments from Management
William G. Gotimer, Jr. and Mark A. Tanner, the Company’s
co-Chief Executive Officers, jointly stated, “Trailer Bridge
remains committed to our employees and our shipping customers. Our
recent decision to restructure the balance sheet of the Company
will strengthen our ability to provide consistent service between
the mainland, Puerto Rico, and the Dominican Republic. We are also
seeing operating trends moving in the right direction. Through the
first seven weeks in the current fourth quarter, we have seen
marked improvement in all aspects of our operations, including
higher revenues, and volume increases. We have achieved this in
what has been a period of perceived uncertainty regarding our
refinancing efforts. Our entire Company is focusing on what has
made Trailer Bridge successful since its founding 20 years ago;
reliably and efficiently moving freight for our customers. We have
the most modern fleet in the Caribbean, and believe our value
proposition to shippers provides cost-efficiencies that are valued
in this economic climate. Upon the completion of this process, we
expect to emerge a stronger company financially. Thanks to the
support of our employees, vendors, and customers, we had no
disruptions of any kind in the past week and expect to continue
providing quality service to our shipper clientele.”
2011 Third Quarter Financial Review
- The Company had revenue of $31.1
million during the quarter, a 6.1% increase compared to $29.3
million in the prior year period, and up approximately 7.2%
sequentially from the second quarter of 2011.
- Trailer Bridge’s operating income for
the three month period ended September 30, 2011, was $0.7 million
compared to $2.5 million in the same period of the previous year.
The decrease was largely due to higher inland purchased
transportation, fuel, and operating and maintenance expenses during
the period.
- The Company reported a net loss of $1.9
million, or $0.16 per basic share and diluted share for the three
months ended September 30, 2011, compared to net income of
approximately $6,900, or $0.00 per basic share and diluted share,
in the same period in 2010. However, this was a substantial
improvement over a net loss of $3.6 million reported sequentially
in the second quarter of 2011.
- Adjusted EBITDA, as detailed in the
accompanying table, was $2.4 million in the third quarter of
2011.
Strategic Restructuring
As announced on November 16, 2011, the Company filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code upon its
$82.5 million 9.25% Senior Secured Notes (“Notes”) becoming due.
The Company hopes to complete this reorganization by the end of the
first quarter of 2012. The Company believes that this action is the
quickest and most efficient way to restructure its balance sheet
and ensure the long-term strength of its operations.
Trailer Bridge has received approval from the bankruptcy court
to receive $15 million in debtor-in-possession, or DIP, financing
to meet its post filing obligations, and will continue operating
under its usual course of business throughout the process. Trailer
Bridge management again reiterates that it does not expect any
reduction in its workforce or vessel deployment and will continue
to provide its reliable weekly sailings between Jacksonville,
Florida, and San Juan, Puerto Rico, weekly sailings between
Jacksonville, Florida, and the Dominican Republic, as well as
weekly inter-island service between Puerto Rico and the Dominican
Republic.
The petition was filed in the U.S. Bankruptcy Court for the
Middle District of Florida. Additional information and court
documents related to the bankruptcy can be located at
www.kccllc.net/TrailerBridge. Throughout this process, the Company
is available to answer any questions that its shareholders,
employees, or customers may have throughout this process.
As previously announced, the Company expects to cease trading on
the Nasdaq Stock Market as of the opening of the stock market on
November 28, 2011. With the filing of these financial reports, the
Company now believes that it will begin trading on the OTC Bulletin
Board (“OTC BB”) under the ticker symbol “TRBR”.
The Company will continue to file periodic reports with the SEC
pursuant to the requirements of the Securities Exchange Act of 1934
as amended.
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 successfully operate and emerge from
bankruptcy, 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
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 Nine Months Ended
September 30, September 30, 2011 2010 2011
2010 OPERATING REVENUES $ 31,140,013 $ 29,287,787 $
84,954,896 $ 89,789,405 OPERATING EXPENSES: Salaries, wages, and
benefits 3,657,048 3,554,055 11,287,671 11,767,887 Purchased
transportation and other rent 9,660,942 7,741,389 25,515,171
22,807,055 Fuel 5,597,303 4,268,648 16,327,463 12,969,122
Operating and maintenance (exclusive of
depreciation & dry-docking shown separately below)
7,325,729 6,836,686 20,847,078 20,985,162 Dry-docking - - 6,900,293
- Taxes and licenses 139,123 183,231 389,853 498,700 Insurance and
claims 818,232 776,395 2,355,909 2,345,953 Communications and
utilities 215,062 215,431 602,636 564,975 Depreciation and
amortization 1,547,020 1,556,747 4,699,850 4,649,850 (Gain) loss on
sale of property and equipment (8,950 ) 1,201 (12,370 ) 27,398
Other operating expenses 1,532,012 1,691,974
4,529,147 5,089,746
30,483,521 26,825,757 93,442,701
81,705,848 OPERATING INCOME (LOSS) 656,492 2,462,030
(8,487,805 ) 8,083,557 NONOPERATING (EXPENSE) INCOME:
Interest expense (2,536,143 ) (2,481,159 ) (7,418,783 ) (7,507,047
) Interest income 1,274 33,205
4,014 42,127 (LOSS) INCOME BEFORE
PROVISION FOR INCOME TAXES (1,878,377 ) 14,076 (15,902,574 )
618,637 PROVISION FOR INCOME TAXES (7,200 ) (7,200 ) (21,600
) (21,870 ) NET (LOSS) INCOME $
(1,885,577 ) $ 6,876 $ (15,924,174 ) $ 596,767
PER SHARE AMOUNTS: NET (LOSS) INCOME PER SHARE BASIC $ (0.16
) $ 0.00 $ (1.33 ) $ 0.05 NET (LOSS) INCOME PER SHARE
DILUTED $ (0.16 ) $ 0.00 $ (1.33 ) $ 0.05
TRAILER BRIDGE, INC.
CONDENSED BALANCE SHEETS
(unaudited)
September 30, December 31, 2011 2010
ASSETS Current Assets: Cash and cash equivalents $
-
$ 11,481,965
Trade receivables, less allowance for
doubtful accounts of $1,210,159 and $1,065,955
15,810,393 13,022,057 Prepaid and other current assets 4,802,462
2,397,948
Reserve fund for debt
4,642,006
-
Deferred income taxes, net 225,645 225,645
Total current assets 25,480,506 31,765,830 Property
and equipment, net 79,645,848 82,631,050
Reserve fund for long-term debt
-
4,638,215
Other assets 439,103 2,004,426 TOTAL
ASSETS $ 105,565,457 $ 116,401,306 LIABILITIES
AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable $
5,804,421 $ 7,411,181 Accrued liabilities 5,016,278 4,725,030
Unearned revenue 1,870,333 1,410,963 Current portion of long-term
debt 108,511,873 85,374,700 Total
current liabilities 121,202,905 98,921,874 Long-term debt,
less current portion - 17,795,827 TOTAL
LIABILITIES 121,202,905 116,717,701
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 September 30, 2011 and December 31, 2010
121,026 121,026
Treasury stock, at cost, 85,906 shares at
September 30, 2011 and December 31, 2010
(318,140 ) (318,140 ) Additional paid-in capital 55,216,764
54,613,643 Capital deficit (70,657,098 ) (54,732,924
) TOTAL STOCKHOLDERS' DEFICIT (15,637,448 ) (316,395
) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 105,565,457
$ 116,401,306
TRAILER BRIDGE, INC.
CONDENSED STATEMENTS OF CASH
FLOWS
NINE MONTHS ENDED SEPTEMBER 30,
(unaudited)
2011 2010 Operating activities: Net (loss) income $
(15,924,174 ) $ 596,767
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation and amortization 4,699,850 4,649,850 Amortization of
loan costs 719,282 681,904 Non-cash stock compensation expense
603,121 678,214 Provision for doubtful accounts 666,864 686,225
(Gain) loss on sale of property and equipment (12,370 ) 27,398
(Increase) decrease in: Trade receivables (3,455,201 ) (1,340,181 )
Prepaid and other current assets (363,910 ) 227,895 Other assets
12,947 (24,925 ) (Decrease) increase in: Accounts payable
(1,606,760 ) 1,892,115 Accrued liabilities 291,252 (138,083 )
Unearned revenue 459,371 (61,676 ) Net cash (used in)
provided by operating activities (13,909,728 )
7,875,503 Investing activities: Purchases of property
and equipment (1,805,989 ) (1,757,322 ) Proceeds from sale of
property and equipment 121,819 96,462 Additions to other assets
- (385,999 ) Net cash used in investing
activities (1,684,170 ) (2,046,859 ) Financing
activities: Proceeds from revolving line of credit 53,699,237 -
Payments on revolving line of credit (46,504,091 ) - Principal
payments on notes payable (1,853,804 ) (3,474,695 ) Payments for
refinancing costs (1,229,409 ) - Exercise of stock options - (1,013
) Purchase of treasury stock - (161,113 ) Net
cash provided by (used in) financing activities 4,111,933
(3,636,821 ) Net (decrease) increase in cash
and cash equivalents (11,481,965 ) 2,191,823 Cash and cash
equivalents, beginning of the period 11,481,965
10,987,379 Cash and cash equivalents, end of
period $ - $ 13,179,202 Supplemental cash flow
information: Cash paid for interest $ 5,746,468 $ 5,901,133
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 Nine months ended Nine months ended
September
30, 2011 September 30, 2010 September 30,
2011 September 30, 2010 GAAP, Net (loss)
income $ (1,885,577) $ 6,876 $ (15,924,174) $ 596,767 Net interest
expense 2,534,869 2,447,954 7,414,769 7,464,920 Provision for
income taxes 7,200 7,200 21,600 21,870 Depreciation and
amortization 1,547,020 1,556,747 4,699,850
4,649,850 Non-GAAP, EBITDA $ 2,203,512 $ 4,018,777 $
(3,787,955) $ 12,733,407 Adjustments: Dry-docking - - 6,900,293 -
Stock compensation 169,991 226,071 603,121 678,214 Severance,
including officers - - 213,046 - Anti-trust related legal expense
31,842 116,513 66,471 641,944 (Gain) loss on asset sales
(8,950) 1,201 (12,370) 27,398 Total
Adjustments 192,883 343,785 7,770,561
1,347,556 Non-GAAP, Adjusted EBITDA $ 2,396,395 $ 4,362,562
$ 3,982,606 $ 14,080,963 Other financial
measures: EBITDA margin 7.1% 13.7% (4.5)% 14.2% Adjusted EBITDA
margin 7.7% 14.9% 4.7% 15.7% Net debt to adjusted EBITDA 17.3x 4.1x
17.3x 4.1x Adjusted EBITDA to interest expense 0.9x 1.8x 0.5x 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
September 30, 2011 and 2010 was $6,011,962 and $20,903,032,
respectively.
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