SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarter ended Commission file number
March 31, 2000 0-22837
TRAILER BRIDGE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3617986
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10405 New Berlin Road E.
Jacksonville, FL 32226 (904) 751-7100
(address of principal (Zip Code) (Registrant's telephone number)
executive offices)
-------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
As of March 31, 2000, 9,777,500 shares of the registrant's common
stock, par value $.01 per share, were outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The interim financial statements contained herein reflect all
adjustments that, in the opinion of management, are necessary for a fair
statement of the financial condition and results of operations for the periods
presented. They have been prepared in accordance with the instructions to Form
10-Q and do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.
Operating results for the three month period ended March 31, 2000 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. In the opinion of management, the information set
forth in the accompanying balance sheet is fairly stated in all material
respects.
These interim financial statements should be read in conjunction with
the Company's audited financial statements for the three years ended December
31, 1999 that appear in the Company's Annual Report on Form 10-K.
Statements of Operations for the
Three Months Ended March 31, 2000 and 1999 (unaudited) Page 3
Balance Sheets as of
March 31, 2000 and December 31, 1999 (unaudited) Page 4
Statements of Cash Flows for the
Three Months Ended March 31, 2000 and 1999 (unaudited) Page 5
Notes to Financial Statements as of
March 31, 2000 Page 6
2
<PAGE>
<TABLE>
TRAILER BRIDGE, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months
Ended March 31,
-------------------------------------
2000 1999
---------------- -----------------
<S> <C> <C>
OPERATING REVENUES ................................. $ 21,333,405 $ 22,750,604
OPERATING EXPENSES:
Salaries wages, and benefits .................... 4,123,808 3,963,294
Rent and purchased transportation:
Related Party ................................ 1,829,100 1,809,000
Other ........................................ 5,610,414 7,073,238
Fuel ............................................ 2,473,776 1,359,625
Operating and maintenance
(exclusive of depreciation shown
separately below) ............................ 5,122,683 7,403,832
Taxes and licenses .............................. 160,102 214,718
Insurance and claims ............................ 601,134 531,304
Communications and utilities .................... 163,981 209,301
Depreciation and amortization ................... 1,210,230 1,073,328
Other operating expenses ........................ 941,208 1,191,399
---------------- -----------------
22,236,436 24,829,039
---------------- -----------------
OPERATING LOSS ..................................... (903,031) (2,078,435)
NONOPERATING INCOME
(EXPENSE):
Interest expense, net (943,996) (652,793)
Gain on sale of equipment, 10,762 30,417
---------------- -----------------
(933,234) (622,376)
---------------- -----------------
LOSS BEFORE BENEFIT FOR INCOME TAXES ............... (1,836,265) (2,700,811)
BENEFIT FOR INCOME TAXES ........................... 685,338 1,017,132
---------------- -----------------
NET LOSS ........................................... $ (1,150,927) $ (1,683,679)
================ =================
NET LOSS PER SHARE ................................. $ (0.12) $ (0.17)
================ =================
WEIGHTED AVERAGE
SHARES OUTSTANDING .............................. 9,777,500 9,777,500
================ =================
</TABLE>
3
<PAGE>
<TABLE>
TRAILER BRIDGE, INC.
BALANCE SHEETS
(Unaudited)
<CAPTION>
March 31, December 31,
2000 1999
----------------- -------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 2,008,485 $ 2,445,750
Trade receivables, less allowance for doubtful
accounts of $1,023,691 and $1,368,514 13,584,846 12,535,138
Other receivables 96,856 76,498
Prepaid expenses 1,045,704 1,202,443
Due from related party 40,200 2,750,200
----------------- -----------------
Total current assets 16,776,091 19,010,029
Property and equipment, net 61,708,888 63,086,924
Goodwill, less accumulated amortization of
$369,796 and $358,101 799,146 810,841
Restricted cash and investments 699,468 691,419
Other assets 5,134,628 4,463,425
----------------- -----------------
TOTAL ASSETS $ 85,118,221 $ 88,062,638
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 7,550,140 $ 7,460,770
Accrued liabilities 2,609,312 3,793,885
Current portion of notes payable 4,104,918 4,615,862
Current portion of revolving line of credit 2,915,625 1,943,750
Current portion of capital lease obligations 85,102 83,010
Unearned revenue 499,506 499,506
----------------- -----------------
Total current liabilities 17,764,603 18,396,783
Notes payable, less current portion 25,595,083 26,762,440
Revolving line of credit 12,634,375 13,606,250
Due to related party 1,000,000
Capital lease obligations, less current portion 67,580 89,657
----------------- -----------------
TOTAL LIABILITIES 57,061,641 58,855,130
----------------- -----------------
Stockholders' Equity:
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; 9,777,500 shares issued and
outstanding in 2000 and 1999 97,775 97,775
Additional paid-in capital 37,982,818 37,982,818
Accumulated deficit in earnings (10,024,013) (8,873,085)
----------------- -----------------
Total stockholders' equity 28,056,580 29,207,508
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 85,118,221 $ 88,062,638
================= =================
</TABLE>
4
<PAGE>
<TABLE>
TRAILER BRIDGE, INC.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2000 and March 31, 1999
(Unaudited)
<CAPTION>
March 31, March 31,
2000 1999
------------------- ------------------
<S> <C> <C>
Operating activities:
Net loss $ (1,150,928) $ (1,683,679)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,210,230 1,092,464
Provision for doubtful accounts 100,942 471,079
Deferred income taxes (685,338) (1,017,132)
Gain on sale of fixed assets (10,762) (30,417)
(Increase) decrease in:
Trade receivables (1,150,650) (108,651)
Other receivables (20,358) (497,491)
Prepaid expenses 156,739 215,867
Increase (decrease) in:
Accounts payable 89,370 (1,240,084)
Accrued liabilities (1,184,573) (200,947)
Due from related party 3,710,000 783,447
Unearned revenue 0 (187,811)
------------------- ------------------
Net cash provided by (used in) operating activities 1,064,672 (2,403,355)
------------------- ------------------
Investing activities:
Purchases & construction of property, plant & equipment (150,737) (993,681)
Proceeds from sale of equipment 341,000 430,000
Decrease in other assets 14,135 3,289
(Increase) decrease in restricted cash and investments (8,049) 522,656
------------------- ------------------
Net cash provided by (used in) investing activities 196,349 (37,736)
------------------- ------------------
Financing activities:
Proceeds from borrowing on revolving line of credit 0 2,000,000
Principal payments on notes payable (1,678,301) (1,254,723)
Principal payments under capital lease obligations (19,985) (10,414)
------------------- ------------------
Net cash (used in) provided by financing activities (1,698,286) 734,863
------------------- ------------------
Net decrease in cash and cash equivalents (437,265) (1,706,228)
Cash and Cash Equivalents, beginning of the period 2,445,750 5,561,996
------------------- ------------------
Cash and Cash Equivalents, end of period $ 2,008,485 $ 3,855,768
=================== ==================
</TABLE>
5
<PAGE>
TRAILER BRIDGE, INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements include all
adjustments, consisting of normal recurring accruals, which the Company
considers necessary for a fair presentation of the results of operations for the
periods shown. The financial statements have been prepared in accordance with
the instructions to Form 10-Q and, therefore, do not include all information and
footnotes necessary for a fair presentation of financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles. The results of operations for any interim period are not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the Company's audited financial statements for the three
years ended December 31, 1999 that appear in the Form 10-K.
2. SEGMENTS
The Company's primary business is to transport freight from its
origination point in the continental United States to San Juan, Puerto Rico and
from San Juan, Puerto Rico to its destination point in the continental United
States. The Company provides a domestic trucking system and a barge vessel
system, which work in conjunction with each other to service its customers. The
Company would not employ either system separately; therefore segment reporting
was not necessary.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS:
Three Months Ended March 31, 2000 and 1999
- ------------------------------------------
Operating revenues for the three months ended March 31, 2000 were $21,333,405 a
decrease of $1,417,199 or 6.2%, compared to the first quarter of 1999. The
Company's monthly operating revenues grew consistently throughout the first
quarter of 2000. Operating revenues for January, February and March 2000, were
$5.5 million, $6.7 million and $9.1 million, respectively. Based primarily upon
a change in itinerary involving the same number of deployed vessels, Trailer
Bridge had 15.3% more overall vessel capacity deployed to Puerto Rico compared
to the first quarter of 1999. For the three months ended March 31, 2000, total
southbound volume decreased .4% and northbound volume increased by 12.1%
compared to the year earlier period. The PIERS data indicates that the overall
Puerto Rico market was down 7.8% for the three months ended March 31, 2000 as
market volumes swelled during the first quarter of 1999 in the aftermath of
Hurricane Georges. As the changes the Company experienced during the first
quarter of 2000 were favorable compared to the respective changes in overall
market volume, the Company's southbound market share excluding vehicles,
improved for the three months ended March 31, 2000 to 12.2% from 11.9% for the
year earlier period and the Company's northbound market share improved for the
three months ended March 31, 2000 to 15.6% from 13.3% for the year earlier
period.
Comparing total volume and total revenue by direction, effective yield to and
from Puerto Rico for the three months ended March 31, 2000 decreased 9.2% and
10.9%, respectively, compared to the same period last year. Puerto Rico deployed
vessel capacity utilization overall during the first quarter of 2000 was 74.7%
to Puerto Rico and 26.8% from Puerto Rico compared to 88.8% to Puerto Rico and
26.8% from Puerto Rico for the same period last year. The Company's vessel
capacity utilization grew consistently in both directions throughout the first
quarter of 2000 as shown in the table below. The stated capacity utilization
figures are based upon vessels deployed in service and exclude the effect of two
Triplestack Box Carriers(TM) that are presently laid-up. Total net expenses
related to these two vessels, consisting primarily of depreciation and interest
and reduced by $259,090 of charter revenue from third parties in the early part
of the quarter, was $98,848 for the three months ended March 31, 2000. When
deployed, these two vessels will increase the Company's in service fleet
capacity by approximately 31%.
For the three months ended March 31, 2000 operating loss was $903,031, an
improvement of $1,175,404 from the $2,078,435 operating loss in the year earlier
period. The Company's operating results improved consistently throughout the
first quarter of 2000 with January and February producing operating losses of
$1,387,795 and $452,787, respectively, with March producing operating income of
$927,551. Compared to the first quarter of 1999, operating income for the three
months ended March 31, 2000 was higher despite lower yields and revenue due to
the absence of additional costs of $2,382,909 related to the disruption
resulting from the loss of use of the San Juan ramp due to Hurricane Georges.
As a result of the above, the operating ratio was 104.2% during the first
quarter of 2000 compared to the 109.1% operating ratio during the year
earlier period. Net interest expense for the three months ended March 31, 2000
of $943,996 was up $291,203 from the year earlier period that included less debt
and lower interest rates.
7
<PAGE>
Loss before income taxes for the three months ended March 31, 2000 was
$1,836,265, an improvement of $864,546 from the year earlier period. After
income taxes, net loss for the three months ended March 31, 2000 was $1,150,927
compared to the net loss of $1,683,679 for the year earlier period. Net loss per
share was $.12 for the three months ended March 31, 2000 compared to net loss
per share of $.17 for the year earlier period.
The following table highlights the actual operating results for the quarter by
month along with related volume and utilization statistics.
<TABLE>
<CAPTION>
January February March 1Q2000
<S> <C> <C> <C> <C>
Revenue 5,511,777 6,696,021 9,125,607 21,333,405
Operating (loss) income (1,387,795) (452,787) 927,551 (903,031)
Net (loss) income before taxes (1,689,450) (764,414) 617,599 (1,836,265)
Net (loss) income (1,049,939) (477,491) 376,503 (1,150,927)
Net (loss) income per share (0.11) (0.05) 0.04 (0.12)
Operating ratio 125.1% 106.7% 89.7% 104.2%
Weeks Volume/Revenue 4 4 5 13
Southbound Puerto Rico volume 1,950 2,400 3,078 7,428
Total Puerto Rico volume 2,574 3,155 4,223 9,952
Southbound vessel capacity utilization 66.8% 75.5% 80.0% 74.7%
Overall vessel capacity utilization 46.1% 51.7% 54.9% 51.4%
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 2000, net cash provided by
operating activities was $1,064,672, an improvement of approximately $3.5
million from the year earlier period. At March 31, 2000, cash amounted to $2.0
million and stockholders equity was $28.1 million. The Company was in compliance
with all financial covenants related to its revolving credit at March 31, 2000.
At March 31, 2000 the Company has negative working capital of $988,512. The
Company believes that it presently has sufficient capital resources and
liquidity for its anticipated debt service requirements, its anticipated capital
expenditures, and to meet its working capital needs.
FORWARD-LOOKING STATEMENTS
This report may contain statements that may be considered as
forward-looking or predictions concerning future operations. Such statements are
based on management's belief or interpretation of information currently
available. These statements and assumptions involve certain risks and
uncertainties and management can give no assurance that such expectations will
be realized. Among all the factors and events that are not within the Company's
control and could have a material impact on future operating results are general
economic conditions, cost and availability of diesel fuel, adverse weather
conditions and competitive rate fluctuations.
8
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Page Number or Incorporated
Number Description by Reference to
- ------- ----------- ---------------------------
27 Financial Data Schedule Page 12 of sequentially
numbered pages
(b) Reports on Form 8-K - None
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
TRAILER BRIDGE, INC.
Date: May 15, 2000 By: /s/ John D. McCown
--------------------------------------
John D. McCown
Chairman and Chief
Executive Officer
Date: May 15, 2000 By: /s/ Mark A. Tanner
--------------------------------------
Mark A. Tanner
Vice President of Administration
and Chief Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the
condensed financial statements of Trailer Bridge, Inc. as of and for the three
months ended March 31, 2000 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,008,485
<SECURITIES> 0
<RECEIVABLES> 14,608,537
<ALLOWANCES> 1,023,691
<INVENTORY> 0
<CURRENT-ASSETS> 16,776,091
<PP&E> 73,771,957
<DEPRECIATION> 12,063,069
<TOTAL-ASSETS> 85,118,221
<CURRENT-LIABILITIES> 17,764,603
<BONDS> 30,700,001
0
0
<COMMON> 97,775
<OTHER-SE> 27,958,805
<TOTAL-LIABILITY-AND-EQUITY> 85,118,221
<SALES> 0
<TOTAL-REVENUES> 21,333,405
<CGS> 0
<TOTAL-COSTS> 22,236,436
<OTHER-EXPENSES> 993,234
<LOSS-PROVISION> 100,942
<INTEREST-EXPENSE> 943,996
<INCOME-PRETAX> (1,836,265)
<INCOME-TAX> (685,338)
<INCOME-CONTINUING> (1,150,927)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,150,927)
<EPS-BASIC> (.12)
<EPS-DILUTED> (.12)
</TABLE>
