March 25, 2009
Trailer Bridge reports fourth quarter loss
Trailer Bridge, Inc. (NasdaqGM:TRBR) reported a net loss for the fourth quarter ended December 31, 2008 of $1.1 million, or $0.09 per share. Charges in the quarter included a one time compensation payment of $830,000 related to the departure of the former CEO, John D. McCown. Exclusive of the compensation charge, the company reported a net loss of $292,000, or $0.02 per share. Revenues were up 5.7% from the fourth quarter of 2007 to $33.3 million.
For the year ended December 31, 2008, revenue increased 14.5% to $133.0 million and net loss was $3.2 million.
Trailer Bridge says fourth quarter results were impacted by reduced southbound volume in the latter part of the quarter as well as unusual operating expenses. During November and December, revenue was impacted by softened volume coupled with weather related schedule disruptions that resulted in one less voyage than anticipated, and increased inland transportation, equipment and marine terminal expenses. Improvement in Dominican Republic volume mitigated the reduced volume to Puerto Rico.
2008 Fourth Quarter Financial Review
Total fourth quarter revenue was $33.3 million, an increase of 5.7% compared to the $31.5 million reported in the same quarter of 2007, but a decrease of 5.9% compared the third quarter of 2008. Revenue in the Dominican Republic market was $2.4 million, compared to $0.4 million in the year earlier period and $2.2 million in the third quarter of 2008. Exclusive of fuel surcharges, total revenue was $27.2 million, an increase of 2.5% compared to the $26.5 million in the prior year period, but a decrease of 1.1% compared sequentially to the $27.5 million in the third quarter. Trailer Bridge reported operating income of $1.4 million, compared with operating income of $2.4 million in the fourth quarter of 2007, and $2.6 million in the third quarter of 2008.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $3.0 million for the fourth quarter of 2008, compared to $3.9 million for the previous year.
Fourth quarter adjusted EBITDA, which excludes stock compensation expenses, losses and gains on asset sales, legal expenses related to an ongoing anti-trust investigation, and the one-time compensation charge related to Mr. McCown's departure, totaled $4.4 million, compared to $4.1 million for the previous year.
Trailer Bridge's southbound volume for the fourth quarter of 2008 declined 0.9% over the same quarter last year and 8.4% below the third quarter of 2008. Trailer Bridge says fourth quarter typically has the highest revenue in the year and generally is above third quarter levels.
Northbound volume increased 4.3% from the prior year period but declined 12.1% from the third quarter of 2008. The reduced northbound volume was primarily related to the temporary suspension of shipments of recycled materials, whose movement is dependent upon funding from the government of Puerto Rico. These shipments began moving again in the first quarter of 2009.
Car and other vehicle volume declined by 10.9% from the prior year quarter, but improved 19.6% from the third quarter of 2008. Increased used vehicle volume to the Dominican Republic helped offset declines in both new and used vehicle volume to Puerto Rico.
The company's vessel capacity utilization during the fourth quarter of 2008 was 92.9% southbound and 23.7% northbound, compared to 75.9% and 20.4%, respectively, in the comparable quarter in 2007, when a fifth vessel was in liner service. The comparable vessel capacity utilization during the third quarter of 2008 was 97.0% southbound and 28.4% northbound.
In Trailer Bridge's third quarter financial results, the company referred to an expected fourth quarter benefit relative to the third quarter of $3.5 million from four highlighted items. The actual benefit from those items totaled $2.5 million, with the difference related to less reduction in net fuel costs as a result of reduced fuel surcharge revenue in the latter part of the quarter.
Legal fees related to the anti-trust investigation and related class action lawsuit were $341,000, compared to $921,000 in the third quarter of 2008.
Ralph W. Heim, Trailer Bridge's President stated, "We finished 2008 with our sailing schedule and operating costs once again back in line with our expectations. This is fundamental for us as it can impact everything from customer satisfaction to a number of important operating efficiencies. We also believe that the tightened economic conditions currently in the market only make our value proposition more attractive to shippers and will continue efforts to deliver that value to more and more customers in both Puerto Rico and Dominican Republic, while building long-term value for shareholders."
2008 Financial Review
Total revenue for the year ended December 31, 2008 was $133.0 million, an increase of 14.5% compared to the $116.2 million in 2007. The Company's operating ratio, or operating expenses expressed as a percentage of revenue, went from 87.8% in 2007 to 94.8% in 2008. Revenue to and from the Dominican Republic was $6.2 million during 2008, compared to approximately $475,000 in 2007, when service commenced. Exclusive of fuel surcharges, total revenue for 2008 was $106.9 million, an increase of $8.1 million compared to the $98.9 million in 2007.
Vessel capacity utilization southbound was 86.3% during 2008, compared to 80.0% during 2007.
At December 31, 2008, the company had cash and cash equivalents of $7.2 million and working capital of $10.0 million. In addition, the company had $4.1 million in a cash reserve fund that secures long term debt and is classified as a long term asset. Trailer Bridge also has the full amount available under its $10 million revolving credit facility. During the quarter, the company also drew $4.1 million available to it under an existing term-loan facility, secured by equipment. The funds were used for the purchase of 200 new 53 foot roll-door containers and general working capital.
READ THE FULL TRAILER BRIDGE FOURTH QUARTER PRESS RELEASE