Trailer Bridge Reports Third Quarter Financial Results.Business Editors JACKSONVILLE, Fla.--(BUSINESS WIRE)--Nov. 14, 2003 Highlights -- Revenue increases 17.0% to $21.6 million from Q3 2002 -- Net loss narrows $1.4 million from Q3 2002 -- Latest volume levels and rate trends continue to show marked improvement -- Schedules financial community conference call for Monday, November 17, 2003 at 10:00 A.M. Trailer Bridge, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : TRBR) today reported financial results for the third quarter and nine months ended September 30, 2003 (see attached tables), highlighted by increased operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. and significantly reduced losses. Market Improvement Evidenced by Increased Volume The Company continues to experience a significant increase in volume and revenue that has been evident since early March 2003. This volume pick-up had been anticipated based upon new commitments and indications of commitments that the Company's sales force was getting from shippers, primarily starting after Labor Day Labor Day, holiday celebrated in the United States and Canada on the first Monday in September to honor the laborer. It was inaugurated by the Knights of Labor in 1882 and made a national holiday by the U.S. Congress in 1894. 2002. The Company believes that this recent robust volume is being driven by the reduction in trade lane capacity as discussed in detail in previous releases and conference calls and the superior service and on-time performance delivered by the Company. Strong Third Quarter Revenue Increase Total revenue for the three months ended September 30, 2003 was $21,622,731, an increase of $3,134,403 or 17.0% compared to the third quarter of 2002. Total southbound south·bound adj. Going toward the south. southbound Adjective going towards the south Adj. 1. volume increased 17.6% compared to the year earlier period and total northbound north·bound adj. Going toward the north. northbound Adjective going towards the north Adj. 1. volume increased 15.4%. The effective yield of all of the southbound cargo represented a decrease of 0.5% from the year earlier period. Northbound, the effective yield increased 7.6% from the year ago period. The Company's Jacksonville-San Juan deployed vessel capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. during the third quarter was 93.3% to Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and 25.3% from Puerto Rico compared to 79.3% and 22.6%, respectively, during the year earlier period. The Company had an average of 215 tractor units A tractor unit, traction unit, road tractor or prime mover (Australian English) is a heavy-duty vehicle, usually with a large diesel engine and two or three axles. operating on the mainland during the quarter, generating an average of 9,045 miles per month of which 74.4% were loaded compared to 198 tractors generating an average of 9,349 miles per month at a 80.2% loaded mile factor during the third quarter of 2002. The increase in tractors was primarily related to more southbound volume and the reduction in loaded mile utilization was primarily due to southbound volume outpacing northbound and domestic volume that matched and greater use of contracted carriers for spot movements involving empty backhauls. During the third quarter of 2003, the average inland distance associated with a core southbound load was 563 miles, below the 602-mile average distance during the year earlier quarter. Losses Narrow Trailer Bridge's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the third quarter ended September 30, 2003 was $152,404, an improvement of $1,343,178 from an operating loss of $1,495,582 in the prior year period. The third quarter 2003 operating loss included an 18.0% increase in fuel costs compared to the prior year period, as well as a 17.5% increase in other purchased transportation expenses related to both a greater use of contracted carriers and a higher per mile rate after including related fuel cost increases. With increasing volume, Trailer Bridge is utilizing other forms of inland transportation that it expects will favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact other purchased transportation expense going forward. The operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: was 100.7% during the third quarter of 2003 compared to the 108.1% operating ratio during the year earlier period. Net interest expense of $710,815 decreased 7.3% from the year earlier period due to less debt and lower interest rates. The Company's loss before income taxes for the third quarter ended September 30, 2003 was $863,219, compared to a pre-tax loss of $2,262,472 in the year earlier period. The effect of income taxes will not be reflected until full profitable results resume. After accretion of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. discount, the net loss attributable to common shares for the third quarter of 2003 narrowed to $1,034,633, or $.11 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from a net loss of $2,487,552, or $.25 per diluted share, in the year earlier period. At September 30, 2003, Trailer Bridge had total cash of $406,734, current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. of $13.6 million and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $6.0 million. Trailer Bridge's current assets of $13.6 million were below total current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. of $28.6 million that included $13.9 million in obligations that come due in early 2004. Trailer Bridge is currently in negotiations with various financial institutions to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. its existing term loan and revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and it believes those negotiations will result in a refinancing Refinancing An extension and/or increase in amount of existing debt. prior to the maturity date of the obligations on January 31, 2004. The Company is current with all of its debt obligations, including the Title XI debt where Trailer Bridge recently made payments totaling $1.4 million, which included all scheduled principal payments. John D. McCown, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "We reported significant year-over-year improvement in the third quarter and are particularly encouraged by the pricing levels and trends evident in the fourth quarter. We always anticipated that the changed circumstances in the Puerto Rico marine lane would first benefit us with volume increases and then benefit us more with rate increases. Just as we have pointed to March 10, 2003 as the start of more pronounced volume increases, I believe we will look back on October 1, 2003 as the start of more pronounced rate increases. October represented our best actual monthly performance in six years and underscores the rapidly improving operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. of the Puerto Rico marine lane." Trailer Bridge will discuss third quarter results in a conference call at 10:00 A.M. (Eastern Time) on Monday, November 17th. The dial in number is 888-297-6395. The call will also be simultaneously broadcast over the Internet. To listen to the live webcast, please go to www.trailerbridge.com and click on the conference call link. The conference call will be archived and accessible for approximately 90 days if you are unable to listen to the live call. 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 and San Juan San Juan, city, Argentina San Juan (săn wän, Span. sän hwän), city (1991 pop. 353,476), capital of San Juan prov., W Argentina. It is a commercial and industrial center in an agricultural region. . Additional information on Trailer Bridge is available at the www.trailerbridge.com website. This press release contains statements that constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 being unable to refinance its debt on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms, economic recessions, the generation and maintenance of sufficient liquidity, severe weather, changes in demand for transportation services offered by the Company, capacity conditions in the Puerto Rico lane and changes in rate levels for transportation services offered by the Company.
TRAILER BRIDGE, INC.
STATEMENTS OF OPERATIONS
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------------------------------
2003 2002 2003 2002
------------------------------------------------
OPERATING REVENUES $21,622,731 $18,488,328 $62,303,817 $54,085,091
OPERATING EXPENSES:
Salaries, wages,
and benefits 3,876,226 3,824,346 11,812,160 11,338,926
Rent and purchased
transportation:
Related Party 1,849,200 1,849,200 5,487,300 5,487,300
Other 6,561,522 5,586,815 18,195,716 14,794,016
Fuel 2,172,924 1,841,771 6,663,494 5,325,933
Operating and
maintenance
(exclusive of
depreciation
shown separately
below) 4,568,537 4,186,873 14,018,138 11,822,377
Taxes and licenses 163,441 120,115 534,559 396,962
Insurance and
claims 787,734 750,583 2,240,051 2,214,978
Communications and
utilities 146,745 142,628 382,105 467,351
Depreciation and
amortization 852,731 821,154 2,557,798 2,567,420
Gain on sale of
equipment (12,257) (23,803) (20,065) (93,267)
Other operating
expenses 808,332 884,228 2,325,140 2,170,187
------------------------------------------------
21,775,135 19,983,910 64,196,396 56,492,183
------------------------------------------------
OPERATING LOSS (152,404) (1,495,582) (1,892,579) (2,407,092)
NONOPERATING EXPENSE:
Interest expense
and other, net (710,815) (766,890) (2,151,870) (2,296,212)
------------------------------------------------
LOSS BEFORE BENEFIT
FOR INCOME TAXES (863,219) (2,262,472) (4,044,449) (4,703,304)
BENEFIT FOR INCOME
TAXES - (3,305) - (3,305)
------------------------------------------------
NET LOSS (863,219) (2,265,777) (4,044,449) (4,706,609)
ACCRETION OF PREFERRED
STOCK DISCOUNT (171,414) (221,775) (808,036) (221,775)
------------------------------------------------
NET LOSS ATTRIBUTABLE
TO
COMMON SHARES $(1,034,633)$(2,487,552)$(4,852,485)$(4,928,384)
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PER SHARE AMOUNTS:
NET LOSS PER SHARE
(BASIC AND DILUTED) $(0.11) $(0.25) $(0.50) $(0.50)
================================================
WEIGHTED AVERAGE
SHARES OUTSTANDING 9,777,633 9,777,500 9,777,544 9,777,500
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