SOURCE: TBS International Limited

March 08, 2007 17:21 ET

TBS International Limited Reports Fourth Quarter and Year Ended December 31, 2006 Financial Results

HAMILTON, BERMUDA -- (MARKET WIRE) -- March 8, 2007 --

TBS International Limited (NASDAQ: TBSI) announced today its financial and
operating results for the fourth quarter and year ended December 31, 2006.

Fourth Quarter 2006 highlights:
--  Net income of $14.4 million or $0.51 per share calculated on 28,088,310
    weighted average number of shares outstanding for the period, on revenues
    of $65.4 million.
--  EBITDA was $25.2 million. 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.
    
Fiscal Year 2006 highlights:
--  Net income of $39.1 million or $1.39 per share calculated on 28,088,310
    weighted average number of shares outstanding for the period, on revenues
    of $253.6 million.
--  Net Income for the year reflects the effect of several charges and the
    gain on sale of vessel that are described in "Non-GAAP Reconciliations -
    Non-Recurring Items" following the financial statements included in this
    press release, totaling $3.9 million, without which Net Income would have
    been $1.53 per share.
--  EBITDA was $83.3 million. 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: "We are pleased to have concluded an exciting year in 2006,
delivering strong operational performance and financial results while
executing our strategy of fleet expansion and renewal as a response to the
growth of our business.  In 2006, we experienced volume increases both in
general cargo and aggregates coupled with stronger freight rates in the
fourth quarter.

"We continued our program of fleet renewal and expansion. At the end of
2006, our controlled fleet had grown to 34 vessels from 31 vessels. Our
fleet expansion focuses on multipurpose tweendeckers, handysize and
handymax bulk carriers. These types of vessels best serve our trade routes
and customer needs. Given that there have not been any significant
newbuildings of tweendeckers in the 20,000 + dwt category in the past 20
years, TBS has taken the initiative to retrofit the M.V. Seminole Princess
and M.V. Laguna Belle with retractable tweendecks in three holds, thereby
optimizing their floor space and cargo flexibility.  This provides us with
a custom solution to our fleet expansion requirements.

"We also embarked on a program to build in China six 34,000 dwt
multipurpose vessels with retractable tweendecks with deliveries scheduled
in 2009 and 2010.  This will ensure the continuity of our fleet over the
longer term. These ships, which represent a new class of larger
multipurpose tweendeck vessels, were designed by a TBS team drawn from all
phases of our operations specifically to optimize our efficient cargo
transportation in our trade lanes, support the requirements of our loyal
customer base and enhance the growth of our business. This newbuilding
program is a significant milestone in our business plan to modernize and
expand our tweendecker fleet and to improve our already strong customer
service.

"Continuing with our plan for the long term, we implemented a program of
extensive steel renewal and maintenance of our fleet, thereby lessening
these requirements in later years. We are scheduled to drydock
approximately 20 vessels during 2007. We explain the drydockings and steel
renewal program in more detail below, under the heading 'TBS Intensive
Drydock and Vessel Upgrade Program in 2007.'

"In today's shipping markets we are experiencing strong freight rates
coupled with sustained growth in demand from our traditional markets in
Asia and Latin America, as well as from the new business opportunities we
have been developing in Africa, the Middle East and elsewhere. We believe
that TBS is well positioned to benefit from this environment."

Ferdinand V. Lepere, Executive Vice President and Chief Financial Officer,
commented: "In July 2006, we established a credit facility of $140 million
with a syndicate of banks led by Bank of America that enabled us to
increase our borrowing capacity, provided us with better terms and
simplified the administration of our debt by consolidating multiple
borrowing arrangements into a single facility. This new facility and its
terms demonstrated the confidence and support of the banking community to
TBS and facilitated the continuation of our fleet expansion plans.  In
January 2007 we increased this credit facility by $20 million.

"In order to provide additional information regarding our Company's
financial results and to facilitate the ability of the investing public to
understand our business, TBS is adding a non-GAAP metric 'Time Charter
Equivalent' or 'TCE.' Please refer to the subsequent section of this press
release for a detailed discussion of TCE and a reconciliation of TCE to
Voyage Revenue.  The purpose is to derive a daily dollar value from a
vessel's voyage that would be most comparable to the net time-charter
revenue that the vessel would earn if the vessel were chartered-out to an
independent third party charterer.  TCE is a metric widely used in the dry
bulk industry.

"Even though the TCE rate makes our business easier to understand and
thereby makes us more comparable to other industry participants, we must
emphasize that it does not capture the uniqueness and complexity of our
business model which constitutes a barrier to entry in our business and
differentiates us from the traditional dry bulk operators."

Fourth Quarter 2006 Results:

For the fourth quarter ended December 31, 2006, total revenues were $65.4
million, a decrease of 3.3% compared to the $67.6 million in the fourth
quarter 2005. Net income for the fourth quarter 2006 was $14.4 million, an
increase of 21.0% compared to $11.9 in the same period of 2005.

The increase of $2.5 million or 21.0% in net income for the fourth quarter
2006 is attributable to a decrease in operating expense of $4.3 million and
a $0.4 million decrease in other expenses and income offset by a decrease
in revenue of $2.2 million.

EBITDA, which is a non-GAAP measure, increased by 19.4% to $25.2 million
for the fourth quarter 2006 from $21.1 million for the same period in 2005.
Please see "Non-GAAP Reconciliations - EBITDA" following the financial
statements included in this press release for a reconciliation of EBITDA to
net income.

Earnings per share on a diluted basis for the fourth quarter 2006,
calculated on 28,088,310 weighted average common shares outstanding, were
$0.51 compared to $0.42 in the fourth quarter 2005 calculated on the same
amount of shares.

An average of 32 vessels (excluding off-hire) were operated during the
fourth quarter of 2006 compared to 35 vessels (excluding off-hire) during
the fourth quarter of 2005.

Results for the Full-Year Period Ended December 31, 2006:

For the full-year period ended December 31, 2006, total revenues were
$253.6 million, an increase of 2.3% compared to the $248.0 million in 2005.
Net income for 2006 was $39.1 million, a decrease of 29.8% compared to
$55.7 million in 2005. Net income in 2006 was reduced by non-recurring
charges (net of gain on sale of vessel) of $3.9 million. Please see
"Non-GAAP Reconciliations - Non - Recurring Items" following the financial
statements in this press release for a discussion of these charges.

EBITDA, which is a non-GAAP measure, decreased 0.8% to $83.3 million for
the full-year of 2006 from $84.0 million in 2005. Please see "Non-GAAP
Reconciliations - EBITDA" following the financial statements included in
this press release for a reconciliation of EBITDA to net income.

Earnings per share on a diluted basis for the full-year 2006, calculated on
28,088,310 weighted average common shares outstanding, were $1.39 compared
to $2.05 in 2005 calculated on 24,310,909 shares. Without the non-recurring
charges, Net Income in 2006 would have been $1.53 per share. Please see
"Non-GAAP Reconciliations - Non - Recurring Items" following the financial
statements in this press release for a discussion of these charges.

Revenues:

Total revenues of $253.6 million for 2006 include voyage revenues of $189.0
million, time charter revenues of $63.1 million and other revenues of $1.5
million.

An average of 33 vessels (excluding off-hire) were operated during the
full-year 2006 compared to 30 vessels (excluding off-hire) during the same
period of 2005.

Voyage Revenues:

Voyage revenues in 2006 were $189.0 million, an increase of $13.4 million
or 7.6% from the $175.6 million in 2005. Total tons of cargo carried
increased by 1.2 million tons or 37.5% from 3.2 million tons in 2005 to 4.4
million tons in 2006. This increase in revenue tons carried is mainly due
to an increase in aggregate bulk cargo carried and an increase in the
number of vessels in our fleet, which resulted in a higher number of
voyages.

Average freight rates per ton for general cargo (excluding aggregates)
decreased by $1.33 per ton or by 2.4% to $55.25 per ton in 2006 from $56.58
per ton in 2005, mainly as the result of the market conditions in the first
half of the year. General cargo volume excluding low-freighted aggregate
bulk cargo increased 135,256 tons or 3.2% from 3.1 million tons in 2005 to
3.2 million tons in 2006. Reflecting the stronger market conditions in the
fourth quarter 2006, excluding low-freighted aggregate bulk cargo, the
average freight rates for general cargo increased $14.28 per ton or 29.4%
from $48.63 per ton in the fourth quarter 2005 to $62.91 per in the same
period 2006.

The 21.9% reduction in average freight rates for all cargoes from $55.39
per ton in 2005 to $43.27 per ton in 2006 reflects the higher volume of
aggregates as a percentage of the total volume of cargo carried in 2006
compared to 2005.

Time Charter Revenues:

Time charter revenues decreased by $8.4 million or 11.7% from $71.5 million
in 2005 to $63.1 million in 2006. This decrease is attributable to a
decrease in the average charter hire rate by $2,111 per day or 12.6% from
$16,785 in 2005 to $14,674 in 2006 and reflects the softer market
conditions especially in the first half of 2006. The chartered vessel days
increased slightly by 44 days or 1.0% from 4,257 days in 2005 to 4,301 days
in 2006. In 2006 we chartered out 12 vessels on average, the same number as
in 2005.

Expenses:

Voyage Expenses:

Voyage expenses, which include fuel, commissions, port call charges and
stevedoring increased by $8.0 million or 10.6% from $75.3 million in 2005
to $83.3 million in 2006. Fuel expense increased by $9.1 million or 32.5%
reflecting an increase in both the average price per metric ton ("MT") and
consumption, from $300 per MT and 93,294 MT in 2005 to $367 per MT and
100,930 MT in 2006. The increase in consumption is primarily due to the
18.0% increase in the number of voyage days from 6,628 days in 2005 to
7,818 days in 2006 due to the higher number of vessels in our fleet.
Please refer to subsequent section of this press release for a detailed
description of bunker fuel expense.

The $2.2 million or 17.5% decrease in commission expense in 2006 compared
to 2005 is primarily due to the elimination of commissions earned by TBS
Shipping Services Inc. which were consolidated into TBS as of June 2005.

Vessel Expenses:

Vessel expenses, which consist of operating expenses relating to owned
vessels, such as crewing, stores, maintenance and insurance, and charter
hire for ships we charter-in and the occasional space charter, decreased by
$5.5 million or 8.0% from $68.7 million in 2005 to $63.2 million in 2006.
This decrease in vessel expense in 2006 as compared to 2005 was primarily
due to a reduction in the number of chartered-in vessels and hire rates
that we paid for chartered-in vessels in 2006 offset by an increase in our
owned vessel fleet.

Prior to 2006, we used the accrual method to account for planned major
maintenance. Effective, as of January 1, 2006, in compliance with the
Financial Accounting Standards Board, TBS adopted the new accounting method
of deferring drydocking costs under which the actual costs incurred for
drydocking are deferred and amortized on a straight line basis over the
period through the date of the next drydocking, except for capital
improvements including steel renewal which are amortize over the remaining
life of the vessel.  The impact of this accounting change decreased owned
vessel expense by $3.8 million in 2006. Vessel expense for 2005 has also
been retrospectively adjusted for the same change.

Management Fees:

Management fees decreased by $2.6 million due to the elimination in
consolidation of management fees to TBS Shipping and Roymar beginning June
2005.

General and Administrative Expenses:

The $9.7 million increase in general and administrative expense for 2006 as
compared to 2005 was in part due to $3.5 million of consulting fees dealing
with the re-engineering of certain of our business processes to better meet
our business needs as we grow and additional professional fees related to
our being a public company. General and administrative expenses also
increased due to a $4.2 million increase in salary and related costs (see
below for a further explanation), a $0.4 million increase in travel costs
and a $1.6 million increase in other and miscellaneous expenses
(principally office overhead costs) for 2006 as compared to 2005.

The increase in salary and related costs as well as miscellaneous expenses
are the result of the timing of our acquisition of TBS Shipping and Roymar
in late June 2005, which as of that time have been fully consolidated into
TBS.  Salary and related costs for 2006 were approximately $16.3 million
representing 12 months of payroll costs, whereas salary and related costs
for 2005 were approximately $12.1 million representing 6 months of payroll
costs from the date of our acquisition of TBS Shipping and Roymar plus
other one-time salary and related costs. All of our employees are employed
by TBS Shipping and Roymar.

Other and miscellaneous costs, such as travel and representation costs,
rents, utilities and other overhead costs for 2006 include a full year of
costs.  However, as with salary and related costs, other and miscellaneous
costs for 2005 include one-half year of costs from the date of our
acquisition of TBS Shipping and Roymar in late June 2005.

Prior to our acquisition of TBS Shipping and Roymar, we were charged
management fees and commissions, which were reflected as management fees
and as commissions included in voyage expense and not as general and
administrative costs.

Interest Expense:

Interest expense increased by $2.3 million or 24.7% from $9.3 million in
2005 to $11.6 million in 2006. The increase reflects higher borrowings due
to the expansion of our fleet and higher interest rates.  In 2006 we
recorded a loss of $3.4 million on the early extinguishment of debt
comprised of $1.3 million for the write-off of deferred finance cost of
then outstanding debt, and $2.1 million for loan prepayment fees.

Fleet Expansion:
--  In 2006, TBS International concluded the acquisition of four additional
    vessels for a total of $69.3 million and the sale of one vessel for $3.2
    million, thereby expanding its controlled fleet from 31 to 34 vessels at
    the end of 2006.  The vessels acquired were the M.V. Aztec Maiden, a 1984
    built 19,777 dwt multipurpose tweendecker, the M.V. Seminole Princess, a
    1997 built 29,516 dwt handysize bulk carrier, the M.V. Laguna Belle, a 1996
    built 29,458 dwt handysize bulk carrier and the M.V. Alabama Belle, a 1986
    built 41,808 dwt handymax bulk carrier. The vessel sold was the M.V. Dakota
    Belle, a 1977 built 18,576 dwt multipurpose tweendecker.
    
--  As of the December 31, 2006, the fleet of 34 vessels with an aggregate of
    1,024,876 dwt was comprised of 19 multipurpose tweendeckers and 15
    handysize and handymax bulk carriers.
    
--  On December 11, 2006, TBS entered into an agreement to acquire the M.V.
    Nanticoke Belle, a 1989 built 28,843 multipurpose tweendecker, for $16.9
    million scheduled for delivery in March 2007. On February 1, 2007, TBS
    entered into an agreement to sell the M.V. Maya Princess, a 37,425 dwt 1983
    built multipurpose tweendecker, for $13.0 million with delivery scheduled
    for March 2007.
    
--  On January 30, 2007, TBS sold for a total of $45.0 million and leased
    back, under 7-year bareboat charters with purchase options, two of the
    vessels acquired in 2006 -- the 1997 built 29,516 dwt M.V. Seminole
    Princess and the 1996 built 29,458 dwt M.V. Laguna Belle.  The net proceeds
    of $38.6 million (after our deposit of $5.5 million and closing costs) were
    used to pay down the revolving credit facility.
    
--  On February 28, 2007 TBS announced a program to build in China six 34,000
    dwt multipurpose vessels with retractable tweendecks to modernize and
    expand our fleet with expected deliveries in 2009 and 2010. The vessels
    will be built by China Communications Construction Company Ltd. and Nantong
    Yahua Shipbuilding Co., Ltd. for a contract price of $35.4 million per
    vessel.
    
Bank of America Syndicated Credit Facility

As announced, on July 31, 2006, TBS International entered into a $140.0
million credit facility with a syndicate of commercial lenders led by Bank
of America to refinance existing indebtedness, provide for working capital
and fund the acquisition of additional vessels.

As of December 31, 2006, TBS had borrowings of $120.4 million outstanding
under this credit facility. On January 23, 2007, TBS increased the
available borrowings under this credit facility by $20 million. The January
30, 2007 sale and leaseback proceeds described above were used to pay down
the credit facility.

The Company entered into an interest rate swap on November 2, 2006,
effectively converting $56.2 million of its borrowings under the Bank of
America Credit Facility from a floating to a fixed-rate. Exclusive of the
applicable margin, the Company will pay interest based on a fixed LIBOR
rate of 5.09% for the next four years.

An Additional Metric: Time Charter Equivalent

In order to provide additional information regarding the Company's
financial results and to facilitate the ability of the investing public to
understand our business, TBS is adding a non-GAAP metric "Time Charter
Equivalent" or "TCE."

In 2006, approximately 64.5% of the Company's Voyage Days were related to
Freight Voyages.  In connection with these Freight Voyages, TBS paid all
the direct voyage expenses such as port charges, bunker fuel costs, canal
fees and commissions.

With respect to Freight Voyages, the metric "Time Charter Equivalent" is
intended to reflect the daily net earnings of a voyage after deducting all
of the applicable voyage expenses from the applicable voyage revenue.  No
deduction is made for vessel expenses or general & administrative expenses.
The purpose is to derive a daily dollar value from the voyage that would be
most comparable to the net time-charter revenue that the vessel would earn
if the vessel were chartered-out to an independent third party charterer.

In 2006, approximately 35.5% of the company's Voyage Days related to
vessels that were chartered-out to independent third party charterers. When
a vessel is chartered-out, it is the charterer and not TBS who pays the
direct voyage expenses. With respect to vessels that were chartered-out,
the metric "Time Charter Equivalent" is intended to reflect the daily
 time-charter rate reduced only by commissions.  No deduction is made for
vessel expenses or general & administrative expenses.
The table below sets forth the average daily "Time Charter Equivalent" or
"TCE" and the voyage days in each of the fiscal quarters of the years 2005
and 2006 relating to freight voyages and to vessels that were
 chartered-out.
                                         2005
                    Freight Voyages                 T/C Out Voyages
Activity
 Period              TCE              Days             TCE            Days

1st Quarter        $ 17,326           1,616        $ 18,439             748
2nd Quarter        $ 15,487           1,536        $ 17,145             901
3rd Quarter        $ 12,580           1,627        $ 14,562           1,239
4th Quarter        $ 12,744           1,849        $ 14,584           1,369
Annual             $ 14,456           6,628        $ 15,797           4,257

                                         2006
                    Freight Voyages                 T/C Out Voyages
Activity
 Period             TCE               Days             TCE            Days

1st Quarter        $ 12,330           2,031        $ 12,515           1,037
2nd Quarter        $ 11,849           1,866        $ 12,145           1,125
3rd Quarter        $ 12,601           1,984        $ 13,989           1,118
4th Quarter        $ 13,806           1,937        $ 15,894           1,021
Annual             $ 12,650           7,818        $ 13,604           4,301




Bunker Fuel Expense

Bunker fuel expense fluctuated dramatically during 2005 and 2006,
constituting 37.1% of freight voyage expense for 2005 and 44.5% of freight
voyage expense for 2006.  The table below sets forth the bunker fuel
expense in each of the fiscal quarters of the years 2005 and 2006; the
number of freight voyage days for each such fiscal quarter; and the average
bunker expense per freight voyage day:
                                       2005

                                      Cost Per Freight   Freight Voyage
Activity Period         Bunker Cost     Voyage Day            Days

1st Quarter             $ 5,677,810      $     3,513         1,616
2nd Quarter             $ 6,237,222      $     4,061         1,536
3rd Quarter             $ 6,792,425      $     4,175         1,627
4th Quarter             $ 9,254,638      $     5,005         1,849
Annual                  $27,962,095      $     4,219         6,628

                                       2006

                                      Cost Per Freight   Freight Voyage
Activity Period         Bunker Cost     Voyage Day            Days

1st Quarter             $ 9,484,627      $     4,670         2,031
2nd Quarter             $ 8,707,991      $     4,667         1,866
3rd Quarter             $10,264,205      $     5,173         1,984
4th Quarter             $ 8,584,569      $     4,432         1,937
Annual                  $37,041,392      $     4,738         7,818




TBS Intensive Drydock and Vessel Upgrade Program in 2007

In the last three years, the TBS Fleet has grown from 12 to 34 vessels.
These Vessels must be drydocked two times every five years, to coincide
with special survey cycles.  Thus the TBS fleet of 34 vessels would result
in 68 drydockings over five years or an average of about 14 vessels per
year.  Because the vessels acquired by TBS were of varying ages and had
differing drydock and survey positions, TBS finds itself in a position
where it must drydock approximately 20 vessels in 2007 requiring
approximately 783 drydock days.  In 2005 we drydocked three vessels for 66
days, one of which took 25 days in 2006 to complete, and in 2006 we
drydocked nine vessels for 304 days.  During the fourth quarter of 2005 we
drydocked two vessels for 42 drydock days, and during the fourth quarter of
2006 we drydocked four vessels for 121 drydock days.

Our company has a program to upgrade its vessels purchased in the last two
years to TBS standards and provide a high level of continuous maintenance.
In view of the fact that our fleet has an average age of about 21 years,
TBS Management has made the decision to anticipate steel renewals that
might be required during the next five to ten years and, where necessary,
to do extensive steel renewal, vessel blasting and crane maintenance at
each vessel's next drydocking.  Drydockings with less than 75 metric tons
of steel renewal normally take from 25 to 30 days.  This will apply to five
vessels to be drydocked in Q1, three vessels to be drydocked in Q2, two
vessels to be drydocked in Q3 and one vessel to be drydocked in Q4. The
remaining vessels will require from 100 to 500 metric tons of steel renewal
and take about 40 to 65 days in drydock, based on current and anticipated
congestion in the Chinese repair shipyards. Of course unanticipated weather
or congestion could always add to time in drydock.
Our current projections are that:
--  In Q1 2007, TBS plans to drydock eight vessels requiring about 1,100
    metric tons of steel and about 216 drydock days in Q1, four of which
    drydocks requiring about an additional 62 drydock days will extend into Q2.
--  In Q2 2007, TBS plans to drydock seven vessels requiring about 1,050
    metric tons of steel and about 261 drydock days in Q2, two of which
    drydocks requiring about an additional 49 drydock days will extend into Q3.
--  In Q3, TBS plans to drydock four vessels requiring about 950 metric tons
    of steel and about 143 drydock days in Q3, one of which drydocks requiring
    an additional 27 days will extend into Q4.
--  In Q4, TBS plans to drydock one vessel requiring about 75 metric tons of
    steel and about 25 days in drydock.
--  Total estimated drydock cost for the 20 vessels (including steel renewal)
    will be about $18.0 million.
--  Total estimated Vessel days in drydock during 2007 will be about 783
    days.
    
Because of favorable steel renewal pricing in China, TBS will drydock these
vessels in Chinese shipyards. For our vessels that trade in the Atlantic or
the Middle East, dry-docking in China requires complex logistics planning.
We believe that after the extensive steel renewal and crane maintenance
that will be done to these vessels, TBS will be able to perform future
drydockings economically at shipyards that are closer to the areas of the
world in which these vessels trade.

Conference call and webcast:

On Friday, March 9, 2007 at 9:30 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: 1-866-314-4865 (from the US) or 1-617-213-8050
(International Dial in). Participant Passcode: 29126797. 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 11:30
a.m. EST on Friday, March 9, 2007 until Friday, March 16, 2007 by dialing
 1-888-286-8010 (from the US) or 1-617-801-6888 (from outside the US).
Access Code: 67525660. A replay of the webcast will be available soon after
the completion of the call.
                  Consolidated Statements of Operations
          (In thousands, except for share and per share amounts)




                         Three Months Ended              Year Ended
                            December 31,                December 31,
                      ------------------------    ------------------------
                         2005          2006          2005          2006
                      ----------    ----------    ----------    ----------
                    (As adjusted)               (As adjusted)
                    (See 1 below)               (See 1 below)
 Revenue:
   Voyage revenue     $   46,232    $   48,004    $  175,596    $  189,012
   Time charter
    revenue               20,969        17,203        71,456        63,114
   Other revenue             381           227           979         1,460
                      ----------    ----------    ----------    ----------
      Total revenue       67,583        65,434       248,031       253,586
                      ----------    ----------    ----------    ----------

 Operating expenses:
   Voyage                 21,429        19,489        75,291        83,254
   Vessel                 19,130        13,482        68,711        63,205
   Depreciation and
    amortization           6,619         8,081        19,537        29,867
   Management and
    agency fees                -             -         2,624
   General and
    administrative         6,095         8,007        17,618        27,256
   (Gain) from sale
    of vessel                  -             -                      (2,180)
                      ----------    ----------    ----------    ----------
      Total operating
       expenses           53,274        49,059       183,781       201,402
                      ----------    ----------    ----------    ----------
 Income from
  operations              14,309        16,375        64,250        52,184
                      ----------    ----------    ----------    ----------

 Other (expenses) and
  income:
   Interest expense       (2,725)       (3,030)       (9,346)      (11,577)
   Other income              305         1,009           752         1,810
   Loss on early
    extinguishment of
    debt (2)                                                        (3,357)
                      ----------    ----------    ----------    ----------
      Total other
       expenses           (2,420)       (2,021)       (8,594)      (13,124)
                      ----------    ----------    ----------    ----------
 Net income               11,889        14,354        55,656        39,060
Allocated amount to
 preference shares                                    (5,706)
                      ----------    ----------    ----------    ----------
Net income available
 for common

 Shareholders         $   11,889    $   14,354    $   49,950    $   39,060
                      ==========    ==========    ==========    ==========

Earnings per share:
Net income per
 common share:
   Basic              $     0.42    $     0.51    $     2.28    $     1.40
   Diluted            $     0.42    $     0.51    $     2.05    $     1.39
Weighted average
 common shares

 outstanding:
   Basic (3)          27,983,829    28,013,310    21,870,160    27,998,843
   Diluted            28,088,310    28,088,310    24,310,909    28,088,310











            Operating Data for the Three Months and Years Ended
                        December 31, 2005 and 2006


                                 Three Months Ended        Year Ended
                                    December 31,          December 31,
                                --------------------- ---------------------
                                  2005       2006       2005       2006
                                ---------- ---------- ---------- ----------
Other Operating Data:
   Controlled vessels (at end
    of period) (4)                      31         34         31         34
   Chartered vessels (at end of
    period) (5)                          6          1          6          1
   Voyage days (6)                   3,218      2,958     10,885     12,119
   Vessel days (7)                   3,357      3,116     11,264     12,701
   Tons of cargo shipped (8)           951      1,171      3,170      4,368
   Revenue per ton (9)          $    48.63 $    41.00 $    55.39 $    43.27
   Tons of cargo shipped,
    excluding aggregates (8)
    (10)                               951        701      3,092      3,227
   Revenue per ton, excluding
    aggregates (9) (10)         $    48.63 $    62.91 $    56.58 $    55.25
   Chartered-out days                1,369      1,021      4,257      4,301
   Chartered-out rate per day   $   15,317 $   16,849 $   16,785 $   14,674


(1) Financial data for year 2005 has been retrospectively adjusted for the
    change in the method of accounting for drydocking costs to the deferral
    method. The new method of accounting for drydocking costs was adopted
    because of changes made on September 8, 2006, by the Financial
    Accounting Standards Board to certain provisions in the American
    Institute of Certified Public Accountants, 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 both the aviation and maritime industries.  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 impact of this accounting
    change on each of the financial statement line items presented above
    that were affected by the change, is as follows:

                                ---------------------
                                        2005
                                ---------------------
   In thousands except per
    share amounts
                                    As          As
                                Originally   Adjusted
                                 Reported

Vessel expense                  $  72,609   $  68,711
Depreciation and amortization
of vessels and other fixed
 assets                         $  18,021   $  19,537
Operating expenses              $ 186,163   $ 183,781
Income from operations          $  61,868   $  64,250
Net income                      $  47,813   $  49,950
   Net (loss) income per common
    share
   Basic                        $    2.19   $    2.28
   Diluted                      $    1.97   $    2.05
Working capital                 $  (5,055)  $    (866)
Total assets                    $ 342,442   $ 344,671


(2)  In 2006 the amount represents the write-off of unamortized debt
     finance costs of $1.3 million and the payment of loan prepayment
     fees of $2.1 million when we repaid most of our then existing
     credit facilities in July 2006 with our $140.0 million syndicated
     credit facility.

(3)  Diluted weighted average common shares outstanding for 2006 includes
     89,467 weighted average common shares relating to the 100,000
     restricted Class A common shares granted to our chief financial
     officer and 4,500 restricted Class A common shares granted to our
     independent directors. Diluted weighted average common shares
     outstanding for 2005 includes 2,387,497 weighted average common
     shares issuable under the exercise of warrants and 53,252 weighted
     average common shares relating to the 100,000 restricted Class A
     common shares granted to our chief financial officer and 4,500
     restricted Class A common shares granted to our independent
     directors.

(4)  Controlled vessels are vessels that we own or charter-in with an
     option to purchase. As of  December 31, 2006, seven vessels in our
     controlled fleet were chartered-in with an option to purchase.

(5)  Vessels that we charter-in without an option to purchase.

(6)  Represents the number of days controlled and time-chartered vessels
     were operated by us, excluding off-hire days.

(7)  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.

(8)  In thousands.

(9)  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.

(10) Aggregates represent high-volume, low-freighted cargo. Including
     aggregates, therefore, can overstate the   amount of tons that we
     carry 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 principal service.






Balance Sheet Data

                              December 31, December 31,
                                 2005       2006
                               ---------  ---------
Balance Sheet Data (In
  Thousands):
  Cash and cash equivalents    $  27,158  $  12,007
  Working capital                   (866)    (3,816)
  Total assets                   344,671    403,091

  Long-term debt, including
   current portion               105,737    125,804
  Obligations under capital
   leases, including Current
   portion                        24,703     21,355
  Total shareholders' equity     184,207    223,604






NON-GAAP RECONCILIATIONS

Please find below TBS' EBITDA reconciliation for the three months ended
December 31, 2005 and 2006 and for the full-year ended December 31, 2005
and 2006
                                  Three Months Ended       Year Ended
                                      December 31,         December 31,
                                --------------------- ---------------------
                                   2005       2006       2005       2006
                                ---------- ---------- ---------- ----------
EBITDA Reconciliation
 (In millions):
   Net Income                   $     11.9 $     14.4 $     55.7 $     39.1
   Net interest expense                2.6        2.7        8.8       14.3
   Depreciation                        6.6        8.1       19.5       29.9
                                ---------- ---------- ---------- ----------

EBITDA                          $     21.1 $     25.2 $     84.0 $     83.3
                                ========== ========== ========== ==========
Please find below TBS’ reconciliation of net income to income before non-
recurring items for the Year ended December 31, 2006
                                                           Year Ended
Income before non-recurring items                       December 31, 2006
                                                      ====================
Reconciliation (In millions):
Net Income                                            $               39.1
Re-engineering costs                                                   2.7
Loan prepayment fees paid                                              2.1
Non cash write-off of unamortized
 Deferred finance costs on refinancing                                 1.3
Gain on sale of vessel                                                (2.2)

                                                      --------------------
Income before non-recurring items                     $               43.0
                                                      ====================
Earnings per share (before non recurring items)
   Basic                                              $               1.54
   Diluted                                            $               1.53

Weighted average common shares outstanding
   Basic                                                        27,998,843
   Diluted                                                      28,088,310
Explanation of non-recurring charges: During the year ended December 31,
2006 we incurred costs related to outside consultants who are assisting us
in reengineering certain of our business processes to better meet our
business needs as we grow, paid loan prepayment fees to our previous
lenders and wrote-off deferred financing costs associated with loans made
by the previous lenders when we refinanced substantially all our debt to
reduce our average borrowing costs and increase our liquidity.  We also
sold the vessel Dakota Belle for a gain of $2.2 million.  We believe that
these items are non-recurring in nature and their exclusion provides a
better financial measure of our operating results for the year ended
December 31, 2006.

Please find below TBS's Reconciliation of TCE to Voyage and Time Charter
Out Revenue for each quarter and the years 2005 and 2006.
                                         Freight Voyages - 2005
                               ============================================
                                               Less: Relet      Freight
Activity Period                Voyage Revenue    Revenue        Revenue
                               ============== ============== ==============
1st Quarter                    $   46,135,336 $        3,821 $   46,131,515
2nd Quarter                        43,984,528      2,423,386     41,561,142
3rd Quarter                        39,243,430        310,649     38,932,781
4th Quarter                        46,232,516              0     46,232,516
                               -------------- -------------- --------------
Annual                         $  175,595,810 $    2,737,856 $  172,857,954
                               ============== ============== ==============



                                  Voyage      Voyage    Voyage   TCE Per
Activity Period                 Expense (1)   Income      Days     Day
                                =========== =========== ======== =========
1st Quarter                     $18,133,454 $27,998,061    1,616 $  17,326
2nd Quarter                      17,773,639  23,787,504    1,536    15,487
3rd Quarter                      18,465,660  20,467,121    1,627    12,580
4th Quarter                      22,668,400  23,564,115    1,849    12,744
                                ----------- ----------- -------- ---------
Annual                          $77,041,152 $95,816,801    6,628 $  14,456
                                =========== =========== ======== =========





                          Time Charter Out Voyages - 2005
          =================================================================

Activity  Time Charter Time Charter   Voyage      Voyage    Voyage  TCE Per
 Period   Out Revenue  Out Revenue  Expense (1)   Income     Days     Day
          ============ ============ =========== ============ ===== ========
1st
 Quarter  $ 14,773,727 $ 14,773,727 $   981,185 $ 13,792,542   748 $ 18,439
2nd
 Quarter    16,450,918   16,450,918   1,002,835   15,448,083   901   17,145
3rd
 Quarter    19,262,340   19,262,340   1,220,018   18,042,322 1,239   14,562
4th
 Quarter    20,968,779   20,968,779   1,002,822   19,965,957 1,369   14,584
          ------------ ------------ ----------- ------------ ----- --------
Annual    $ 71,455,764 $ 71,455,764 $ 4,206,860 $ 67,248,904 4,257 $ 15,797
          ============ ============ =========== ============ ===== ========





                                         Freight Voyages - 2006
                               ============================================
                                               Less: Relet      Freight
Activity Period                Voyage Revenue    Revenue        Revenue
                               ============== ============== ==============
1st Quarter                    $   49,319,289 $      484,547 $   48,834,742
2nd Quarter                        43,808,380      1,462,947     42,345,433
3rd Quarter                        47,880,324         45,170     47,835,154
4th Quarter                        48,004,196         97,379     47,906,817
                               -------------- -------------- --------------
Annual                         $  189,012,189 $    2,090,043 $  186,922,146
                               ============== ============== ==============

                                  Voyage      Voyage    Voyage   TCE Per
Activity Period                 Expense (1)   Income      Days     Day
                                =========== =========== ======== =========
1st Quarter                     $23,793,461 $25,041,281    2,031 $  12,330
2nd Quarter                      20,235,926  22,109,507    1,866    11,849
3rd Quarter                      22,833,858  25,001,296    1,984    12,601
4th Quarter                      21,165,023  26,741,794    1,937    13,806
                                ----------- ----------- -------- ---------
Annual                          $88,028,267 $98,893,879    7,818 $  12,650
                                =========== =========== ======== =========






                          Time Charter Out Voyages - 2006
          =================================================================

Activity  Time Charter Time Charter   Voyage      Voyage    Voyage  TCE Per
 Period   Out Revenue  Out Revenue  Expense (1)   Income     Days     Day
          ============ ============ =========== ============ ===== ========
1st
 Quarter  $ 14,170,306 $ 14,170,306 $ 1,192,130 $ 12,978,176 1,037 $ 12,515
2nd
 Quarter    14,826,051   14,826,051   1,162,395   13,663,656 1,125   12,145
3rd
 Quarter    16,914,474   16,914,474   1,274,494   15,639,980 1,118   13,989
4th
 Quarter    17,203,166   17,203,166     975,058   16,228,108 1,021   15,894
          ------------ ------------ ----------- ------------ ----- --------
Annual    $ 63,113,997 $ 63,113,997 $ 4,604,077 $ 58,509,920 4,301 $ 13,604
          ============ ============ =========== ============ ===== ========
(1) Voyage expense includes commission expense and management fees earned
    by TBS Shipping Services, Inc. that are eliminated in consolidation.




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
    Annual Report on Form 10-K for the period ended December 31, 2005  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
    E-mail: nbornozis@capitallink.com