Metric Q2 2009 Q2 2008 6M 2009 6M 2008
----------- ------------ ----------- ------------
Revenue (thousands) $ 72,236 $ 156,947 $ 143,394 $ 288,523
Net (Loss)
Income(thousands) $ (16,913) $ 52,641 $ (38,201) $ 98,019
EPS (basic and diluted) $ (0.57) $ 1.82 $ (1.28) $ 3.44
Weighted Average Number
of Shares(basic and
diluted) 29,827,345 28,778,769 29,822,402 28,411,539
EBITDA(thousands)(1) $ 11,170 $ 72,806 $ 16,022 $ 137,106
Drydock Days 136 192 290 339
Freight Voyages
Average Daily Voyage
TCE $ 11,268 $ 32,007 $ 11,480 $ 30,390
Freight Voyage Days 2,982 2,758 6,098 5,133
Tons of Cargo Shipped
(thousands) 2,449 2,288 4,596 4,332
Average Freight Rate for
All Cargoes $ 24.40 $ 56.25 $ 27.03 $ 52.37
Average Freight Rate
excluding Aggregates $ 40.33 $ 91.79 $ 42.42 $ 89.35
Bunker Cost/Voyage Day $ 4,190 $ 7,092 $ 4,365 $ 6,694
Time Charter out
Voyages
Average Daily Time
Charter TCE $ 9,642 $ 30,563 $ 8,028 $ 30,437
Time Charter Days 1,140 777 2,027 1,807
(1) 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 and Chief Executive Officer and President,
stated: "The second quarter of 2009 continued to be very challenging for
TBS, and the Handymax/Handysize and General Cargo segment of the Dry Cargo
Shipping Industry. For the first six months of 2009 our revenues and
EBITDA declined significantly and we experienced a Net Loss, as the
stimulus packages adopted by several governments around the world had not
yet positively affected cargo movement and freight rates in our segment of
the dry cargo transportation industry. We anticipated these financial
results and, accordingly, prepaid all principal payments due on our debt
through the end of 2009. Additionally, our cash balance on June 30, 2009
was $52.5 million, plus $15.2 million on deposit to cover the remaining
2009 stage advances on construction of the six Roymar Class multipurpose
tweendeckers in China.
"Our financial results were not unexpected, and in our view part of the
normal progression of the recovery of dry cargo ocean transportation from
the depths of the severe global recession we are experiencing. The recovery
is now being led by the movement of basic raw materials such as iron ore,
coal, and agricultural products on Capesize and Panamax vessels. We are now
seeing improvement in TBS cargo volumes and freight rates for the third
quarter of 2009 with respect to bulk cargoes of minerals, metals and basic
steel products which we carry on our Handymax/Handysize bulk carriers.
"The liner service and general cargo segment of our business has lagged
behind the bulk cargo business and we would expect to see demand for the
movement of high value finished goods and logistic services resume
significantly in the latter part of this year as our customers restock
their inventories and resume their projects. We are cautiously optimistic
that the global stimulus packages are taking effect and that there will be
a gradual return to more normalized market conditions with the developing
countries at the forefront of the global economic recovery. Urbanization
and core economic development, which have been the prevalent trends in
developing economies around the world, especially in China, India, South
America and Africa, may temporarily slow down but we believe they are
irreversible.
"In this environment, we continue to leverage our strongest assets -- our
worldwide team of shipping professionals and our Five-Star Service
consisting of Ocean Transportation, Logistics, Port Services, Operations
and Strategic Planning. We have fully staffed affiliate agencies and
representative offices on five continents and are taking steps to expand
our trading areas.
"We are also quickly positioning TBS to participate in the economic
recovery and to take advantage of new opportunities that may arise:
-- We enhanced our local presence in Southeast Asia, moving our Senior
Executive responsible for our Pacific Liner Service to Shanghai.
-- We reinforced our commitment to the Houston Energy and Logistics
business segment by relocating two senior Executives to Houston, expanding
our office and establishing a Port Warehouse. Houston is the regional
project logistics hub.
-- We are exploring Joint Venture opportunities in the Caribbean, South
America and Africa for logistics and ocean cargo movement.
"We believe that this pro-active approach combined with our efficient and
reliable service will serve TBS well through the second half of 2009 and
the economic recovery in 2010."
Ferdinand V. Lepere, Executive Vice President and Chief Financial Officer,
commented: "I am pleased to report that as of June 30, 2009, TBS was in
full compliance with all of its financial covenants. Our net debt to
capitalization ratio was 33.5% with a cash balance of $52.5 million on June
30, 2009. In addition, we have $15.2 million on deposit which is to be
used for our payments to the shipyard on our newbuilding program.
"Our newbuilding program for the six Roymar Class multipurpose tweendeckers
is in progress and we have in place the requisite bank financing for them.
So far, two vessels have been launched: one in November 2008 and the other
in May 2009; however, the scheduled delivery dates on the six vessels have
changed. According to the new schedule, we expect the delivery of our
first vessel in the third quarter of this year, four vessels are to be
delivered in 2010 and the last vessel is expected to be delivered in the
first quarter of 2011.
"I would like to reiterate that we have decided to scale back our
accelerated steel renewal program to meet only the necessary maintenance
requirements. During the second quarter of 2009, we drydocked eight
vessels, which includes five vessels that entered into drydocking during
the first quarter for 88 days and the remaining three vessels entered
drydock for 48 days."
Second Quarter 2009 Results:
For the second quarter ended June 30, 2009, total revenues were $72.2
million, a decrease of 54.0% compared to the $156.9 million for the same
period in 2008. Net loss for the second quarter 2009 was $16.9 million, a
decrease of 132.1% compared to $52.6 million profit for the same period in
2008. Earnings per share on a basic and diluted basis were $(0.57) in the
second quarter of 2009, calculated based on 29,827,345 shares, compared to
$1.82 for the second quarter 2008, calculated based on 28,778,769 shares.
EBITDA, which is a non-GAAP measure, decreased by 84.6% to $11.2 million
for the quarter ended June 30, 2009 from $72.8 million in 2008. Please see
"Non-GAAP Reconciliations - EBITDA" following the financial statements in
this press release for a reconciliation of EBITDA to net income.
Revenues:
Total revenues of $72.2 million for the second quarter 2009 include voyage
revenues of $59.7 million, time charter revenues of $12.2 million and
logistics and other revenues of $0.3 million.
An average of 45 vessels (excluding off-hire) were operated during the
second quarter 2009 compared to 39 vessels (excluding off-hire) during the
same period of 2008.
Voyage Revenues:
Voyage revenues in the second quarter 2009 were $59.7 million, a decrease
of $69.0 million or 53.6% from the $128.7 million during the same period in
2008.
Total cargo volume (including aggregates) increased 161,000 tons or 7.0% to
2,449,000 tons for the second quarter 2009 from 2,288,000 for the same
period in 2008. The increase in cargo volume is attributed to a slight
increase in both aggregates (97,000 tons) and non-aggregates (64,000 tons)
carried.
Cargo volume (excluding aggregates) increased 64,000 tons or 5.2% to
1,297,000 tons for the second quarter 2009 from 1,233,000 tons for the same
period in 2008. Freight rates excluding aggregates decreased $51.46 per
ton or 56.1% to $40.33 per ton for the second quarter 2009 from $91.79 per
ton during the same period in 2008.
Average Daily Voyage Time Charter Equivalent, which is an industry standard
metric reflecting the daily net earnings of a voyage after deducting all
voyage expenses from voyage revenues, was $11,268 per day in the second
quarter 2009, a decrease of 64.8% from the $32,007 during the same period
in 2008 and a decrease of 3.6% from the $11,685 per day during the first
quarter 2009, reflecting continued weakness in the dry cargo industry.
Time Charter Revenues:
Time charter revenues decreased by $13.1 million or 51.8% to $12.2 million
for the second quarter 2009 from $25.3 million for the same period in 2008,
reflecting a decrease in the average charter hire rates caused by the
collapse in the shipping markets.
Average Daily Time Charter Equivalent, which is an industry standard metric
reflecting time charter-out revenues during the period reduced by
commissions, was $9,642 per day in the second quarter 2009, a decrease of
68.5% from the $30,563 during the same period of 2008. The key factor
driving the decrease in the average time charter equivalent rate per day is
the worldwide economic crisis.
Expenses:
Total operating expenses for the second quarter 2009 decreased by $15.2
million or 15.2% to $85.0 million from $100.2 million for the same period
in 2008.
Voyage expenses, which include fuel costs, commissions, port call charges
and stevedoring, declined by $14.6 million or 34.9% to $27.3 million for
the second quarter 2009. The decrease is due to a decline in fuel expenses
which were a result of lower average fuel costs partially offset by higher
fuel consumption due to an increase in the average number of controlled
vessels; decreased commission expense as a result of lower voyage revenues,
as well as port call expenses and stevedore and other cargo-related
expenses.
Vessel expenses which consist of operating expenses relating to owned and
controlled vessels, such as crewing, stores, repairs and maintenance,
insurance and charter hire fees for vessels that are chartered-in,
increased by $1.2 million or 4.9% to $25.5 million for the second quarter
2009 as compared to $24.3 million for the same period in 2008. Owned vessel
expenses increased by $1.3 million due to an increase in the average number
of owned vessels (47 compared to 42) and increased vessel days.
Chartered-in vessel expenses decreased $0.5 million due to a decrease in
the chartered-in rate per day.
General and administrative expenses decreased by $6.9 million or 45.4% to
$8.3 million in the second quarter 2009 reflecting our cost reduction
efforts and due to a decrease in personnel expenses, related to the
elimination of our 2009 bonus accrual.
The operating expenses for the second quarter 2009 also include an expense
of $0.2 million related to TBS Logistics Incorporated, our cargo and
transport management subsidiary.
Results for the Six Months ended June 30, 2009:
For the six months ended June 30, 2009, total revenues were $143.4 million,
a decrease of 50.3% compared to the $288.5 million for the same period
2008. Net loss for the six months 2009 was $38.2 million, a decrease of
139.0% compared to $98.0 million profit for the same period 2008. Earnings
per share on a basic and diluted basis were $(1.28) for the six months
ended June 30, 2009, calculated based on 29,822,402 shares, compared to
$3.44 for the same period of 2008, calculated based on 28,411,539 shares.
EBITDA, which is a non-GAAP measure, decreased by 88.3% to $16.0 million
for the six months ended June 30, 2009 from $137.1 million in 2008. 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 45 vessels (excluding off-hire) were operated during the six
months 2009 compared to 38 vessels (excluding off-hire) during the same
period of 2008.
Total revenues of $143.4 million for the six months 2009 include voyage
revenues of $124.3 million, time charter revenues of $18.3 million and
logistic and other revenues of $0.8 million.
Fleet Expansion and Newbuilding Program:
The previously announced TBS Newbuilding Program to construct six Roymar
Class multipurpose vessels with retractable tweendecks is proceeding with
the launch of two vessels: one in November 2008 and the other in May 2009.
Two vessels were tentatively scheduled to be delivered in 2009 and four
vessels in 2010. However, the scheduled delivery dates on the six vessels
have changed with the first vessel to be delivered in the third quarter of
2009, the next four vessels in 2010 and the last vessel in 2011.
TBS previously entered into a $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 June
30, 2009, the Company has made cumulative payments of $125.9 million to the
Shipyard towards the purchase of these vessels.
TBS 2009 Drydock Program and Vessel Upgrade Program:
For 2009, TBS plans to drydock 22 vessels for approximately 662 drydocking
days with steel renewal of about 2,191 metric tons at a total cost of
approximately $20.4 million. This estimate includes one vessel that
entered into drydock during the fourth quarter of 2008.
Our anticipated 2009 drydocking schedule is as follows:
-- During the three months ended March 31, 2009, TBS drydocked one vessel
that entered into drydock during the fourth quarter of 2008 and continued
its drydocking for 16 days in the first quarter 2009. Additionally, eight
vessels entered into drydock for 138 drydock days, requiring about 657
metric tons of steel.
-- During the second quarter 2009, five vessels that entered into drydock
during the first quarter continued their drydocking for 88 days and three
vessels entered drydocking for 48 days, requiring about 425 metric tons of
steel.
-- We estimate for the third quarter 2009, six vessels requiring about
684 metric tons of steel and about 212 drydock days.
-- We estimate for the fourth quarter 2009, four vessels requiring about
425 metric tons of steel and about 160 drydock days.
Conference call and webcast:
On Thursday, August 6, 2009 at 10:00 a.m. EDT, 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: 1-888-680-0890 (from the US) or 1-617-213-4857
(International Dial In). Participant Passcode: 10391845. Participants may
pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=PMJWEHWNU.
Pre-registrants will be issued a PIN number to use when dialing into the
live call which will provide quick access to the conference by bypassing
the operator upon connection.
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 1:00 p.m.
ET on Thursday, August 6, 2009 until Thursday, August 13, 2009 by dialing
1-888-286-8010 (from the US) or 1-617-801-6888 (International Dial In).
Access Code: 33631268. A replay of the webcast will be available soon
after the completion of the call.
Consolidated Statements of Income
For the Second Quarter and Six Months
Ended June 30, 2009 and 2008
(In thousands, except per share amounts and outstanding shares)
Three Months Ended Six months ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenue
Voyage revenue $ 59,741 $ 128,696 $ 124,254 $ 226,856
Time charter revenue 12,168 25,258 18,339 57,984
Logistic revenue (1) 270 2,711 536 3,243
Other revenue 57 282 265 440
---------- ---------- ---------- ----------
Total Revenue 72,236 156,947 143,394 288,523
---------- ---------- ---------- ----------
Operating expenses
Voyage 27,314 41,931 56,313 73,849
Logistics (1) 172 2,191 421 2,691
Vessel 25,520 24,315 53,499 47,749
Depreciation and
amortization of vessels
and other fixed assets 23,603 16,515 46,322 30,008
General and
administrative 8,349 15,296 17,035 27,063
---------- ---------- ---------- ----------
Total operating expenses 84,958 100,248 173,590 181,360
---------- ---------- ---------- ----------
(Loss) income from
operations (12,722) 56,699 (30,196) 107,163
Other (expenses) and
income
Interest expense (4,466) (3,840) (7,977) (7,277)
Loss on extinguishment of
debt (2) - - - (2,318)
Interest and other income
(expense) 275 (218) (28) 451
---------- ---------- ---------- ----------
Total other (expenses)
and income, net (4,191) (4,058) (8,005) (9,144)
---------- ---------- ---------- ----------
Net (loss) income $ (16,913) $ 52,641 $ (38,201) $ 98,019
========== ========== ========== ==========
Earnings per share
Net (loss) income per
common share
Basic and Diluted $ (0.57) $ 1.82 $ (1.28) $ 3.44
Weighted average common
shares outstanding
Basic and Diluted 29,827,345 28,778,769 29,822,402 28,411,539
Operating Data for the Three and Six Months Ended June 30, 2009 and 2008
Three Months Six Months
Ended Ended
June 30, June 30,
2009 2008 2009 2008
Other Operating Data:
Controlled vessels (at end of period)
(3) 47 44 47 44
Chartered vessels (at end of period)
(4) 2 - 2 -
Freight Voyage days (5) 2,982 2,758 6,098 5,133
Vessel days (6) 4,364 3,896 8,726 7,635
Tons of cargo shipped (7) 2,449 2,288 4,596 4,332
Revenue per ton (8) $ 24.40 $ 56.25 $ 27.03 $ 52.37
Tons of cargo shipped, excluding
aggregates (7) (9) 1,297 1,233 2,449 2,227
Revenue per ton, excluding
aggregates (8) (9) $ 40.33 $ 91.79 $ 42.42 $ 89.35
Chartered-out days 1,140 777 2,027 1,807
Chartered-out rate per day $ 10,674 $ 32,506 $ 9,047 $ 32,088
TCE per day - Freight Voyages (10) $ 11,268 $ 32,007 $ 11,480 $ 30,390
TCE per day - Time Charters-Out (11) $ 9,642 $ 30,563 $ 8,028 $ 30,437
(1) TBS Logistics represents revenue and related costs for cargo and
transportation management services as part of TBS' Five Star Service
to customers which began operations in the fourth quarter of 2007.
(2) In 2008 the loss on extinguishment of debt represents the write-off
of unamortized deferred finance costs in connection with the March
2008 refinancing of the Bank of America syndicated credit facility.
(3) Controlled vessels are vessels that are owned or chartered-in with an
option to purchase. As of June 30, 2009, two vessels in the controlled
fleet were chartered-in with an option to purchase.
(4) Represents vessels that were both chartered-in under short-term
charters (less than one year at the start of the charter) and
chartered in under long-term charters without an option to purchase.
(5) Represents the number of days controlled and time-chartered vessels
were operated by the Company performing freight voyages. Freight
voyage days exclude both off-hire days and time chartered 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 the
vessel is operated, excluding off-hire days.
(7) In thousands.
(8) Revenue tons is a measurement on which shipments are freighted.
Cargoes are rated as weight (based on metric tons) or measure (based
on cubic meters), whichever produces the higher revenue will be
considered the revenue ton.
(9) Aggregates represent high-volume, low-freighted cargo, which can
overstate the amount of tons that is carried on a regular basis and
accordingly reduces the revenue per ton. TBS believes that the
exclusion of aggregates better reflects their cargo shipping and
revenue per ton data for their principal services.
(10) Daily Time Charter Equivalent or "TCE" rates are defined as voyage
revenue less voyage expenses during the year divided by the number of
available freight voyage days during the period. Voyage expenses
include: fuel, port call, commissions, stevedore and other cargo
related and miscellaneous voyage expenses. To conform to the 2009
presentation daily time charter equivalent rate for 2008 was revised
to exclude logistics expenses which were classified as voyage expense
in 2008. No deduction is made for vessel or general and administrative
expenses. TCE includes the full amount of any probable losses on
voyages at the time such losses can be estimated. 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) Daily Time Charter Equivalent or "TCE" rates for vessels that are time
chartered out are defined as time charter revenue during the period
reduced principally by commissions divided by the number of available
time charter days during the period. Commission for vessels that are
time chartered out for the three months ended June 30, 2009 and June
30, 2008 were $0.5 million and $1.5 million, respectively. Commission
for the six months ended June 30, 2009 and June 30, 2008 were $0.8
million and $3.0 million. For the three and six months ended June 30,
2009, time charter voyages include primarily fuel cost as well as
other miscellaneous voyage costs of $0.7 million and $1.3 million,
respectively. The fuel cost is related to fuel price differentials
caused by volatility in the fuel market and the cost for ballasting
vessels to time charter delivery ports. No deduction is made for
vessel or general and administrative 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.
Balance Sheet Data
Please find below TBS’ selected balance sheet data:
June 30, December 31,
2009 2008
---------------- ----------------
Balance Sheet Data (In thousands):
Cash and cash equivalents $ 52,488 $ 131,150
Restricted Cash 15,175 -
Working capital 42,632 104,311
Total assets 952,912 1,041,685
Total debt, including current portion 336,664 383,074
Total shareholders' equity 565,038 598,296
Non-GAAP Reconciliations
Please find below TBS’ EBITDA reconciliation for the three and six months
ended June 30, 2009 and 2008.
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
--------- ---------- --------- ----------
EBITDA Reconciliation (In
thousands):
Net (Loss) Income $ (16,913) $ 52,641 $ (38,201) $ 98,019
Net interest expenses 4,480 3,650 7,901 9,079
Depreciation and Amortization 23,603 16,515 46,322 30,008
--------- ---------- --------- ----------
EBITDA $ 11,170 $ 72,806 $ 16,022 $ 137,106
========= ========== ========= ==========
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 for the company's services;
-- 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 changes in production of or demand for
oil and petroleum products, crew wages, insurance, provisions, repairs and
maintenance, generally or in particular regions;
-- 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;
-- increase in the cost of our drydocking program or delays in our
anticipated drydocking schedule;
-- 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
Annual Report on Form 10-K for the period ended December 31, 2008 and its
subsequent reports on Form 10-Q and Form 8-K.
About TBS International Limited:
TBS is a fully-integrated transportation service company that offers
customers the TBS Five Star Service consisting of ocean transportation,
operations, logistics, port services, and strategic planning. We offer
liner, parcel, bulk, and chartering services, supported by a fleet of
multipurpose tweendeckers and handysize and handymax bulk carriers,
including specialized heavy-lift vessels. 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, the Caribbean and
the Middle East.
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 tbs@capitallink.com