SOURCE: TBS International Limited

November 08, 2007 16:42 ET

TBS International Limited Reports Third Quarter and Nine Months 2007 Financial Results

HAMILTON, BERMUDA--(Marketwire - November 8, 2007) - TBS International Limited (NASDAQ: TBSI) announced today its financial and operating results for the third quarter and for the nine months ended September 30, 2007.

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