Third Quarter and Nine Months 2007 Highlights:
Metric Q3 2007 Q3 2006 9M 2007 9M 2006
---------- ---------- ---------- ----------
Revenues (million) $ 92.4 $ 65.4 $ 240.4 $ 188.1
Net Income (million) (1) $ 27.0 $ 9.8 $ 63.1 $ 24.7
Income (excl. non recurring
items) (million) (1) (2) $ 27.0 $ 12.3 $ 57.9 $ 28.3
EPS (diluted) (1) $ 0.96 $ 0.35 $ 2.25 $ 0.88
EPS (excl. non recurring
items) (1) (2) $ 0.96 $ 0.44 $ 2.06 $ 1.01
No. of Shares (diluted) 28,081,678 28,088,310 28,059,545 28,088,310
EBITDA (million)(1,3) $ 38.5 $ 23.6 $ 96.2 $ 58.0
Drydock Days 261 14 823 193
Freight Voyages
Metric Q3 2007 Q3 2006 9M 2007 9M 2006
---------- ---------- ---------- ----------
Average Daily Voyage TCE $ 21,525 $ 12,601 $ 19,452 $ 12,269
Freight Voyage Days 2,157 1,984 6,064 5,881
Tons of Cargo Shipped
(thousand) 1,661 1,133 4,784 3,197
Average Freight Rate for All
Cargoes $ 43.16 $ 42.25 $ 38.69 $ 44.11
Average Freight Rate excluding
Aggregates $ 70.06 $ 57.18 $ 64.60 $ 53.13
Bunker Cost/Voyage Day $ 4,956 $ 5,173 $ 4,555 $ 4,839
Time Charter Voyages
Average Time Charter TCE $ 23,833 $ 13,989 $ 19,267 $ 12,891
Time Charter Days 807 1,118 2,640 3,280
(1) Third Quarter 2006 Net Income and EPS included a charge of $1.2 million
for the re-engineering of certain of TBS' business processes, $1.3
million charge for write-off of deferred finance costs and $2.2 million
in early prepayment fees offset by a gain of $2.2 million from the sale
of the M.V. Dakota Belle. Nine Months ended 2007 Net Income and EPS
included a gain of $6.0 million from the sale and insurance recovery
of the M.V. Huron Maiden and a loss of $800 thousand from the sale of
the M.V. Maya Princess. Nine Months ended September 30, 2006 Net
Income and EPS included a charge of $2.3 million for re-engineering
costs, $1.3 million charge for write-off of deferred finance costs
and $2.2 million in early prepayment fees offset by a gain of $2.2
million from the sale of the M.V. Dakota Belle.
(2) Income and EPS before non-recurring is a non-GAAP financial measure.
For a reconciliation of Net Income and EPS to Income and EPS before
non-recurring items for the three and nine months ended September 30,
2007 and 2006 please refer to "Non-GAAP Reconciliations" further in
this press release.
(3) EBITDA is a non-GAAP financial measure. Please refer to "Non-GAAP
Reconciliations-EBITDA" following the financial statements included
in this press release for a reconciliation of EBITDA to Net Income.
Management Commentary:
Joseph E. Royce, Chairman, Chief Executive Officer and President, stated:
"We are pleased to report our strongest quarter in the Company's history in
terms of operational and financial results. In the third quarter, we
achieved net income of $27 million, or $0.96 per share, and EBITDA, which
is a non-financial GAAP measure, of $38.5 million on record revenues of
$92.4 million. Please see 'Non-GAAP Reconciliations -- EBITDA' following
the financial statements included in this press release for a
reconciliation of EBITDA to net income.
"Our global marketing campaign that we introduced in Europe, South America
and Asia to inform our customers and prospective clients of the development
of TBS and our enhanced operational capabilities has been very successful.
This campaign has already generated tangible results.
"With the support of our loyal long-time customer base and new customers,
we continued to implement our 'business first-vessel second' growth
strategy, resulting in our introduction of new or expanded trading lanes
during this year.
-- We expanded our TBS Pacific Service with the introduction of a steel
parcel service from China, Korea and Japan to the West Coast of South
America;
-- We established a steel, general cargo and project parcel service from
China, Korea and Japan to Brazil and Argentina;
-- We developed a backhaul steam and industrial coal transport business
from Colombia and Venezuela to Brazil and Argentina;
-- We introduced a new service from Argentina and Brazil into the
Mediterranean;
-- We opened our TBS Logistics headquarters in Houston, Texas, to work
with our international logistics partners and our affiliate agencies to
develop our international project logistics capabilities.
"In order to meet our ever increasing vessel requirements, we contracted
for six dry bulk carriers and one multipurpose tweendecker, which will
expand our fleet to 40 vessels. On October 12, 2007, we took delivery of
the 42,475 dwt Yakima Princess. Later this month, we expect to take
delivery of the 22,558 dwt Savannah Belle and the 24,021 dwt Arapaho Belle.
In the first quarter of 2008, we expect to take delivery of three dry bulk
carriers, the 23,510 dwt Oneida Princess, the 28,074 dwt Mohave Maiden and
the 28,166 dwt Zuni Princess, and the multipurpose tweendecker, the 20,401
dwt Hopi Princess. We are continuing to look for suitable acquisitions of
additional vessels in the second-hand market.
"A key challenge continues to be accommodating the increased demand we have
been experiencing across the board and maintaining our high level of
customer service, while implementing our accelerated drydock and vessel
upgrade program. I am pleased to report that we are successfully meeting
this challenge. This is a testimony to the high level of professionalism
and expertise of our staff worldwide.
"We continue to benefit from increased freight rates (excluding aggregates)
that resulted in an increase in our Average Daily Freight Voyage Time
Charter Equivalent ('TCE') to $21,525 per day in the third quarter of 2007
from $12,601 per day in the third quarter of last year. This enabled TBS to
absorb an increase in vessel expense of $6.8 million in the third quarter
2007, primarily caused by the need to charter-in vessels at current market
rates to temporarily replace TBS vessels that were in drydock for 261 days
during the third quarter of 2007, compared to 14 days in the same period of
2006.
"Our accelerated drydock and vessel upgrade program is on schedule. For
2007, we plan to drydock 19 of our 33 vessels and one vessel that we plan
to acquire during the fourth quarter, for approximately 990 drydock days in
total. During the first nine months, we had 17 vessels in drydock for a
total of 823 days, of which 261 days were in the third quarter of 2007.
Three of the vessels in drydock during the third quarter will continue in
drydock into the fourth quarter for approximately 60 days. Three additional
vessels, including one vessel that we plan to acquire, will enter drydock
in the fourth quarter and will require approximately 110 days. In
addition, the Yakima Princess that was delivered to TBS in early October
has been ballasted to drydock in Brazil and is not expected to enter the
TBS Atlantic Service until the first week in December.
"We are currently planning our 2008 drydock and vessel upgrade program for
approximately 14 vessels, which will include 3 of the vessels we agreed to
acquire. When this drydock program is complete, we believe TBS will benefit
from the enhanced efficiency of our fleet and the diminished maintenance
requirements in the ensuing years, thereby enabling us to take full
advantage of the strong market conditions while at the same time improving
our operational efficiency and customer service.
"The retrofitting of the 28,503 dwt Seminole Princess with tweendecks in
holds 2, 3 and 4 was concluded in July 2007, and the retrofitting of the
28,503 dwt Laguna Belle with tweendecks in holds 2, 3 and 4 was concluded
in October 2007, at an estimated total cost for both vessels of about $4.8
million. These vessels are currently employed in our TBS Pacific Service.
"Our newbuilding program for six 34,000 dwt multipurpose vessels, with
retractable tweendecks, on order at a Chinese shipyard is on schedule,
thereby contributing to the renewal and expansion of our fleet for the
longer term."
Ferdinand V. Lepere, Executive Vice President and Chief Financial Officer
commented: "At the end of September 2007, our debt to capitalization ratio
stood at 28.6%, a moderate level for industry standards. This represents an
improvement from 37.7% at December 31, 2006. Our strong cash flow
generation and moderate leverage afford us significant flexibility to
support and finance our vessel acquisition program."
Third Quarter 2007 Results:
For the third quarter ended September 30, 2007, total revenues were $92.4
million, an increase of 41.3% compared to the $65.4 million for the same
period in 2006. Net income for the third quarter of 2007 was $27.0 million,
an increase of 175.5% compared to $9.8 million for the same period in 2006.
Net income for the third quarter of 2006 included a charge of $1.2 million
for the re-engineering of certain of TBS' business processes to better meet
the company's needs as it grows, a $1.3 million charge for the write-off of
deferred costs and $2.2 million in early prepayment fees, partially offset
by a gain of $2.2 million from the sale of the Dakota Belle.
Earnings per share on a diluted basis were $0.96 for the third quarter of
2007, calculated on 28,081,678 shares, compared to $0.35 for the same
period in 2006, calculated on 28,088,310 shares. Earnings per share for the
third quarter of 2006 included the non-recurring items mentioned above.
EBITDA, which is a non-GAAP measure, increased 63.1% to $38.5 million for
the third quarter of 2007 from $23.6 million in the same period in 2006.
EBITDA for the third quarter of 2006 included the non-recurring items
mentioned above. Please see "Non-GAAP Reconciliations -- EBITDA" following
the financial statements included in this press release for a
reconciliation of EBITDA to net income.
Revenues:
Total revenues of $92.4 million for the third quarter of 2007 include
voyage revenues of $71.7 million, time charter revenues of $20.6 million
and other revenue of $0.1 million.
An average of 32 vessels (excluding off-hire) were operated during the
third quarter 2007, compared to 34 vessels (excluding off-hire) during the
same period in 2006.
Voyage Revenues:
Voyage revenues for the third quarter of 2007 were $71.7 million, an
increase of $23.8 million or 49.7%, from the $47.9 million during the same
period in 2006.
Revenue tons carried (excluding aggregates) increased 168,465 tons, or
21.6% to 947,433 tons for the three months ended September 30, 2007, from
778,968 tons for the same period in 2006. Reflecting stronger market
conditions, freight rates, excluding aggregates, increased $12.88 per ton,
or 22.5%, to $70.06 per ton for the three months ended September 30, 2007,
from $57.18 per ton for the same period in 2006.
Our Average Daily Voyage Time Charter Equivalent, which is an industry
standard metric reflecting the daily net earnings of a voyage after
deducting all of the voyage expenses from the voyage revenues, was $21,525
per day in the third quarter of 2007, an increase of 70.8% from $12,601 per
day for the same period in 2006 and an increase of 11.8% from $19,247 per
day during the second quarter of 2007, indicative of the continued market
strength.
Revenue tons carried (including aggregates) increased by 528,113 tons, or
46.6%, to 1,661,261 for the three months ended September 30, 2007, from
1,133,148 tons for the same period in 2006. This increase is mainly due to
an increase in our aggregates business by 359,648 tons.
Time Charter Revenues:
Time charter revenues increased by $3.7 million, or 21.9%, to $20.6 million
for the three months ended September 30, 2007, from $16.9 million for the
same period in 2006.
Our Average Daily Time Charter Equivalent, which is an industry standard
metric reflecting time charter out revenues during the period reduced by
commissions, was $23,833 per day in the three months ended September 30,
2007, an increase of 70.4% from the $13,989 for the same period in 2006 and
an increase of 31.4% from the $18,134 per day during the second quarter of
2007, indicative of continued market strength.
Expenses:
Total operating expenses for the three months ended September 30, 2007,
increased by $13.5 million, or 27.3%, to $63.0 million from $49.5 million
for the same period in 2006. However, as a percentage of revenue, total
operating expenses decreased by 7.5% to 68.2% from 75.7%.
Voyage expenses, which include fuel, commissions, port call charges and
stevedoring increased by $1.9 million, or 8.7%, to $23.8 million for the
three months ended September 30, 2007, mainly reflecting increases in port
call expenses and commissions related to the growth of our business and
revenue.
Vessel expenses, which consist of operating expenses relating to owned
vessels, such as crewing, stores, lubes, repairs and maintenance,
registration taxes and fees, insurance and charter hire for vessels we
charter-in, increased by $6.8 million, or 44.2%, to $22.2 million for the
three months ended September 30, 2007, as compared to $15.4 million for the
same period in 2006. This is mainly attributed to an increase in the time
charter rates that were paid for chartered-in vessels, which increased
$10,489 per day to $24,074 per day for the three months ended September 30,
2007, from $13,585 per day for the same period in 2006. Vessel expense
also increased due to an increase in the cost of lubes and insurance
expense.
General and administrative expenses for the third quarter of 2007,
increased by $1.1 million, or 15.9%, to $8.0 million in the three months
ended September 30, 2007, reflecting our business growth.
Results for the Nine Months ended September 30, 2007:
For the nine months ended September 30, 2007, total revenues were $240.4
million, an increase of 27.8% compared to the $188.1 million for the same
period 2006. Net income for the nine months 2007 was $63.1 million, an
increase of 155.5% compared to $24.7 million for the same period in 2006.
Earnings per share on a diluted basis were $2.25 for the nine months of
2007, calculated on 28,059,545 shares, compared to $0.88 for the nine
months of 2006, calculated on 28,088,310 shares.
Net income and earnings per share for the nine months of 2007 included a
gain of $6.0 million in the second quarter 2007 from the sale and insurance
recovery of the Huron Maiden and a loss of $800 thousand in the first
quarter 2007 on the sale of the Maya Princess. Net income and earnings per
share for the nine months of 2006 included a charge of $2.3 million in
consulting fees dealing with the re-engineering of certain of TBS' business
processes, $1.3 million charge for write-off of deferred finance costs and
$2.2 million in early prepayment fees offset by a gain of $2.2 million from
the sale of Dakota Belle.
EBITDA, which is a non-GAAP measure, increased 65.9% to $96.2 million for
the nine months ended September 30, 2007 from $58.0 million in 2006. EBITDA
for the nine months of 2007 and 2006 includes the non-recurring items
mentioned above. Please see "Non-GAAP Reconciliations -- EBITDA" following
the financial statements included in this press release for a
reconciliation of EBITDA to net income.
An average of 32 vessels (excluding off-hire) were operated during the nine
months 2007 compared to 34 vessels (excluding off-hire) during the same
period in 2006.
Total revenues of $240.4 million for the nine months 2007 include voyage
revenues of $185.1 million, time charter revenues of $54.7 million and
other revenues of $0.6 million.
Recent Fleet Developments:
On October 12, 2007 TBS took delivery of the Yakima Princess, a 1990 built
42,475 dwt handymax bulk carrier that the Company had previously agreed to
acquire charter free for $29 million.
Since the beginning of the third quarter 2007, the Company has entered into
agreements to acquire charter free five handysize dry bulk carriers and one
multipurpose tweendecker for a total of $142.1 million representing an
aggregate of 146,730 dwt. TBS expects to take delivery of these six vessels
between now and mid-March 2008.
Following the above transactions, TBS' fleet will comprise 40 vessels in
total, with an aggregate of 1,179,223 dwt, including 21 multipurpose
tweendeckers and a combination of 19 handysize and handymax bulk carriers.
Fleet Expansion and Newbuilding Program:
In February 2007, TBS entered into agreements with China Communications
Construction Company Ltd. and Nantong Yahua Shipbuilding Co., Ltd. to build
six newly designed multipurpose vessels with retractable tweendeckers at a
contract purchase price of $35.4 million per vessel, with scheduled
delivery of two vessels in 2009 and four vessels in 2010. On March 29,
2007, TBS entered into a new $150 million term loan credit agreement with a
syndicate of lenders led by The Royal Bank of Scotland to finance the
building and purchase of these six new multipurpose vessels.
As of September 30, 2007, TBS has made payments of $55.8 million toward the
purchase price of these six vessels and $1.6 million for design and
professional fees.
TBS 2007 Drydock and Vessel Upgrade Program:
In the last three years, the TBS owned and controlled fleet has grown from
12 to 33 vessels by September 30, 2007, with an average age of about 21
years. The Company made the strategic decision to embark in 2007 on an
accelerated drydock and vessel upgrade program anticipating steel renewals
that might be required during the next five to ten years. This program
resulted in increased drydocking days of 2007 relative to 2006 and 2005.
For 2007, TBS' plan has been to drydock 20 vessels for approximately 990
drydocking days with a steel renewal of about 5,100 metric tons at a total
cost of approximately $21.0 million. In addition, the Company invested
approximately $4.8 million to retrofit the Seminole Princess and the Laguna
Belle by installing tweendecks in 3 holds in each vessel.
Within the third quarter of 2007, TBS had ten vessels in drydock for a
total of 261 days compared to 14 days in the same period in 2006. Within
the nine months of 2007, TBS had 17 vessels in drydock for a total of 823
days compared to 193 days in the same period in 2006. Drydocking costs for
the third quarter of 2007 and the nine months ended September 30, 2007 were
$8.3 million and $18.4 million, respectively.
Anticipated drydocking schedule for the last quarter of 2007 is as follows:
During the fourth quarter of 2007, TBS anticipates a total of about 170
drydock days as follows: 60 drydock days relating to vessels that entered
drydock during the first nine months of 2007 and 110 drydock days relating
to three vessels that will begin their drydock during the fourth quarter of
2007.
Conference call and webcast:
On Friday, November 9, 2007 at 10:00 a.m. EST, the company's management
will host a conference call to discuss the results.
Conference call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1-866-770-7129 (from the US) or 1-617-213-8067
(International Dial in). Participant Passcode: 78498720. The conference
call will also be webcast live on the company's website: www.tbsship.com by
clicking on the webcast link.
Webcast:
There will also be a live -- and then archived -- slides and audio webcast
of the conference call on the company's website www.tbsship.com, which can
be accessed by clicking on the webcast link. As soon as practicable, the
webcast and the corresponding slides will be archived and will also be
accessible on our website.
Replay:
A telephonic replay of the conference call will be available from 12:00
p.m. EST on Friday, November 9, 2007 until Friday, November 16, 2007 by
dialing 1-888-286-8010 (from the US) or 1-617-801-6888 (from outside the
US). Access Code: 29800490. A replay of the webcast will be available soon
after the completion of the call.
Consolidated Statements of Operations
For the Third Quarter and Nine Months
Ended September 30, 2007 and 2006
(In thousands, except for share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
---------- ---------- ---------- ----------
(As Adjusted) (As Adjusted)
(See 1 Below) (See 1 Below)
Revenue:
Voyage revenue $ 71,699 $ 47,880 $ 185,087 $ 141,008
Time charter revenue 20,558 16,915 54,748 45,911
Other revenue 140 607 614 1,232
---------- ---------- ---------- ----------
Total revenue 92,397 65,402 240,449 188,151
---------- ---------- ---------- ----------
Operating expenses:
Voyage 23,768 21,857 63,548 63,765
Vessel 22,192 15,354 62,690 49,723
Depreciation and
amortization of vessels
and other fixed assets 9,032 7,621 25,869 21,785
General and
administrative 7,960 6,883 22,804 19,250
Gain from sale of vessel 0 (2,180) 814 (2,180)
---------- ---------- ---------- ----------
Total operating expenses 62,952 49,535 175,725 152,343
---------- ---------- ---------- ----------
Income from operations 29,445 15,867 64,724 35,808
---------- ---------- ---------- ----------
Other (expenses) and
income:
Interest expense (2,603) (2,738) (7,772) (8,351)
Loss on extinguishment of
debt - (3,552) - (3,552)
Gain on total
constructive loss of
vessel - - 6,034 -
Other income 162 198 109 801
---------- ---------- ---------- ----------
Total other (expenses)
and income (2,441) (6,092) (1,629) (11,102)
---------- ---------- ---------- ----------
Net income $ 27,004 $ 9,775 $ 63,095 $ 24,706
========== ========== ========== ==========
Earnings per share:
Net income per common
share:
Basic $ 0.96 $ 0.35 $ 2.25 $ 0.88
Diluted $ 0.96 $ 0.35 $ 2.25 $ 0.88
Weighted average common
shares outstanding:
Basic (2) 28,044,310 28,013,310 28,024,295 27,993,968
Diluted 28,081,678 28,088,310 28,059,545 28,088,310
Operating Data for the Three and Nine Months
Ended September 30, 2007 and 2006
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
-------- -------- -------- --------
Other Operating Data:
Controlled vessels (at end of period)
(3) 33 31 33 31
Chartered vessels (at end of period)
(4) 2 3 2 3
Freight Voyage days (5) 2,157 1,984 6,064 5,881
Vessel days (6) 3,295 3,200 9,797 9,585
Tons of cargo shipped (thousand) (7) 1,661 1,133 4,784 3,197
Revenue per ton (8) $ 43.16 $ 42.25 $ 38.69 $ 44.11
Tons of cargo shipped, excluding
aggregates (thousand) (7) (9) 947 779 2,596 2,526
Revenue per ton, excluding
aggregates (8) (9) $ 70.06 $ 57.18 $ 64.60 $ 53.13
Chartered-out days 807 1,118 2,640 3,280
Chartered-out rate per day $ 25,474 $ 15,129 $ 20,738 $ 13,997
TCE per day - Freight Voyages (10) $ 21,525 $ 12,601 $ 19,452 $ 12,269
TCE per day - Time Charters-Out (11) $ 23,833 $ 13,989 $ 19,267 $ 12,891
(1) Effective January 1, 2006, the Company changed the method of
accounting for drydocking costs to the deferral method, whereas in all
prior years drydocking costs were accounted for using the accrual
method. Under the deferral method of accounting for drydocking, the
actual costs incurred are deferred and are amortized on a
straight-line basis over the period through the date of the next
drydocking. The change in accounting method for drydocking costs was
made in connection with the Company's early adoption of FSP No.
AUGAIR-1, Accounting for Planned Major Maintenance Activities issued
by the Financial Accounting Standards Board ("FASB") on September 8,
2006, which amended certain provisions in the American Institute of
Certified Public Accountants ("AICPA"), Industry Audit Guide, Audits
of Airlines ("Airline Guide"). The Airline Guide is the principal
source of guidance on the accounting for planned major maintenance and
is relevant to the maritime industry. The consolidated statement of
income for the three and nine months ended September 30, 2006 has been
adjusted to apply the new method retrospectively. The following
financial statement line items for the three and nine months ended
September 30, 2006 were affected by the change in accounting
principle.
Consolidated Statement of Operations
For the Three Months Ended September 30, 2006
As Reported As Computed
under the under the
(In thousands) Accrual Deferral Effect of
Method Method Change
------------ ------------ -----------
Operating expenses:
Vessel $ 16,324 $ 15,354 $ (970)
Depreciation and amortization $ 7,211 $ 7,621 $ 410
Total operating expenses $ 50,096 $ 49,535 $ (561)
Income from operations $ 15,306 $ 15,867 $ 561
Net income $ 9,214 $ 9,775 $ 561
Earnings per share
Basic $ 0.33 $ 0.35 $ 0.02
Diluted $ 0.33 $ 0.35 $ 0.02
Consolidated Statement of Operations
For the Nine Months Ended September 30, 2006
As Reported As Computed
under the under the
(In thousands) Accrual Deferral Effect of
Method Method Change
------------ ------------ -----------
Operating expenses:
Vessel $ 52,754 $ 49,723 $ (3,031)
Depreciation and amortization $ 20,560 $ 21,785 $ 1,225
Total operating expenses $ 154,148 $ 152,343 $ (1,805)
Income from operations $ 34,003 $ 35,808 $ 1,805
Net income $ 22,901 $ 24,706 $ 1,805
Earnings per share
Basic $ 0.82 $ 0.88 $ 0.06
Diluted $ 0.82 $ 0.88 $ 0.06
(2) Basic weighted average common shares outstanding for the three months
ended September 30, 2007 includes 288,853 common shares issuable on
the exercise of warrants. These shares are treated as outstanding for
purposes of basic earnings per share for the period beginning February
8, 2005, because on that date the exercise condition of the warrants
were satisfied and the shares subject to the exercise of the warrants
are issuable for nominal consideration.
(3) Controlled vessels are vessels that we own or charter-in with an
option to purchase. As of September 30, 2007, nine vessels in our
controlled fleet were chartered-in with an option to purchase.
(4) Vessels that we charter-in without an option to purchase.
(5) Represents the number of days controlled and time-chartered vessels
were operated by us, performing freight voyages excluding off-hire
days. Excludes time charter out days.
(6) Represents the number of days that relate to vessel expense for
controlled and time-chartered vessels. Vessel expense relating to
controlled vessels is based on a 365-day year. Vessel expense relating
to chartered-in vessels is based on the actual number of days we
operated the vessel, excluding off-hire days.
(7) In thousands.
(8) Revenue per ton is a measurement unit for cargo carried that is
dependent upon the weight of the cargo and has been calculated using
number of tons on which revenue is calculated, excluding time charter
revenue.
(9) Aggregates represent high-volume, low-freighted cargo. Including
aggregates, therefore, can give the impression that the amount of
tons we carry are higher than the tons carried on a regular basis
and reduce our revenue per ton. We believe that the exclusion of
aggregates better reflects our cargo shipped and revenue per ton
data for our other services.
(10)Time Charter Equivalent or "TCE" rates per day - freight voyages are
defined as voyage revenue less voyage expenses during the period
divided by the number of available days during the period. Voyage
expenses include the following expenses: fuel, port call, commissions,
stevedore and other cargo related and miscellaneous voyage expenses.
TCE is an industry standard for measuring and analyzing fluctuations
between financial periods and as a method of equating TCE revenue
generated from a voyage charter to time charter revenue.
(11)Time Charter Equivalent or "TCE" rates for vessels that are time
chartered out are defined as time charter revenue during the period
reduced by commissions divided by the number of available days during
the period. No voyage expenses are deducted because they are not
applicable.
Balance Sheet Data
September 30, December 31,
2007 2006
------------- ------------
Balance Sheet Data (In Thousands):
Cash and cash equivalents $ 53,807 $ 12,007
Working capital (deficit) 37,869 (3,816)
Total assets 488,516 403,091
Long-term debt, including current portion 150,466 125,804
Obligations under capital leases, including
current portion 18,334 21,355
Total shareholders' equity 286,792 223,604
Non-GAAP Reconciliations
Please find below TBS' EBITDA reconciliation for the three and nine months
ended September 30, 2007 and 2006
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(As (As
Adjusted) Adjusted)
EBITDA Reconciliation
(In millions):
Net Income $ 27.0 $ 9.8 $ 63.1 $ 24.7
Net interest expenses 2.5 6.2 7.2 11.5
Depreciation 9.0 7.6 25.9 21.8
---------- ---------- ---------- ----------
EBITDA $ 38.5 $ 23.6 $ 96.2 $ 58.0
========== ========== ========== ==========
Reconciliation of Net Income to Income before non-recurring items for the
three and nine months ended September 30, 2007 and 2006:
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ----------------------
2007 2006 2007 2006
--------- ---------- ---------- ----------
(As (As
Adjusted) Adjusted)
Income before
non-recurring items:
Reconciliation (In millions)
Net Income $ 27.0 $ 9.8 $ 63.1 $ 24.7
Loan prepayment fees paid - 2.2 - 2.2
Non cash write-off of
unamortized Deferred
finance costs on refinancing - 1.3 - 1.3
Gain/ Loss on sale of vessel - (2.2) 0.8 (2.2)
Gain on sale and insurance
recovery of vessel - - (6.0) -
Re-engineering costs - 1.2 - 2.3
--------- ---------- ---------- ----------
Income before loss on sale
of vessel and other non-
recurring items $ 27.0 $ 12.3 $ 57.9 $ 28.3
========= ========== ========== ==========
Earning per share (before loss on sale
of vessel and other non-recurring items)
Basic $ 0.96 $ 0.44 $ 2.07 $ 1.01
Diluted $ 0.96 $ 0.44 $ 2.06 $ 1.01
Weighted average common shares
outstanding
Basic 28,044,310 28,013,310 28,024,295 27,993,968
Diluted 28,081,678 28,088,310 28,059,545 28,088,310
Forward-Looking Statements "Safe Harbor" Statement under the Private
Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on management's current
expectations and observations.
Included among the factors that, in the company's view, could cause actual
results to differ materially from the forward-looking statements contained
in this press release are the following:
-- changes in demand;
-- a material decline or prolonged weakness in rates in the shipping
market;
-- changes in rules and regulations applicable to the shipping industry,
including, without limitation, legislation adopted by international
organizations such as the International Maritime Organization and the
European Union or by individual countries;
-- actions taken by regulatory authorities;
-- changes in trading patterns significantly impacting overall vessel
tonnage requirements;
-- changes in the typical seasonal variations in charter rates;
-- increases in costs including without limitation: changes in production
of or demand for oil and petroleum products, generally or in particular
regions; crew wages, insurance, provisions, repairs and maintenance;
-- changes in general domestic and international political conditions;
-- changes in the condition of the company's vessels or applicable
maintenance or regulatory standards (which may affect, among other things,
the company's anticipated drydocking or maintenance and repair costs);
-- availability to us and to China Communications Construction Company
Ltd./ Nantong Yahua Shipbuilding Co., Ltd. of satisfactory financing, China
Communications Construction Company Ltd./ Nantong Yahua Shipbuilding Co.,
Ltd.'s ability to complete and deliver the vessels on the anticipated
schedule and the ability of the parties to satisfy the conditions in the
shipbuilding agreements; and
-- other factors listed from time to time in the company's filings with
the Securities and Exchange Commission, including, without limitation, its
registration on Form S-1, its Annual Report on Form 10-K for the period
ended December 31, 2006 and its subsequent reports on Form 10-Q and Form 8-
K.
About TBS International Limited:
TBS is an ocean transportation services company that offers worldwide
shipping solutions through liner, parcel and bulk services, and vessel
chartering. TBS has developed its business around key trade routes between
Latin America and China, Japan and South Korea, as well as select ports in
North America, Africa and the Caribbean. TBS provides frequent regularly
scheduled voyages in its network, as well as cargo scheduling, loading and
discharge for its customers.
Visit our website at www.tbsship.com
Contact Information: For more information, please contact: Company Contact: Ferdinand V. Lepere Executive Vice President and Chief Financial Officer TBS International Limited Tel. 914-961-1000 InvestorRequest@tbsship.com Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. New York Tel. 212-661-7566 nbornozis@capitallink.com