Three and Nine Months 2010 Highlights:
Metric Three Months Ended Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
Revenue (thousands) $ 99,754 $ 74,332 $ 311,063 $ 217,726
Net (Loss) attributable to
TBS International plc
(thousands) $ (10,355) $ (18,139) $ (27,876) $ (56,340)
Net (Loss) per ordinary
share (basic and diluted) $ (0.34) $ (0.61) $ (0.92) $ (1.89)
Weighted average ordinary
shares outstanding (basic
and diluted) 30,519,326 29,863,460 30,139,778 29,836,239
EBITDA (thousands) (1) $ 21,887 $ 10,464 $ 67,353 $ 26,486
Drydock Days 155 191 338 481
Freight Voyages
---------------
Average Daily Voyage TCE $ 13,383 $ 12,296 $ 14,052 $ 11,726
Freight Voyage Days 3,024 2,630 8,384 8,728
Revenue tons carried for
all cargoes (thousands) 2,540 2,098 7,588 6,694
Average Freight Rate for
all cargoes $ 29.60 $ 27.25 $ 29.02 $ 27.10
Average Freight Rate
excluding Aggregates $ 53.64 $ 46.81 $ 54.41 $ 43.75
Time Charter out Voyages
---------------------------
Average Daily Time Charter
TCE $ 17,260 $ 11,048 $ 17,498 $ 9,255
Time Charter Days 1,262 1,384 4,437 3,411
(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 Loss.
Management Commentary:
Joseph E. Royce, Chairman, Chief Executive Officer and President stated:
"The TBS results for the third quarter 2010 reflect the continuing downward
pressure on dry cargo freight rates that began in May, as evidenced by the
Baltic Dry Indices, particularly the Indices for handysize and handymax
vessels.
"We are concentrating on sustaining cargo volumes and seeking to increase
market share, despite the lower freights rates, and we continue to employ
our Five Star Service to retain our competitive advantage."
Ferdinand V. Lepere, Senior Executive Vice President and Chief Financial
Officer, commented: "As already announced on October 1, 2010, we have
entered into forbearance agreements with our lenders expiring on November
14, 2010. As a result, during this 45-day period, we will not be making the
principal payments due on such facilities. Our lenders have agreed to
forbear from exercising their rights and remedies that arise from the
failure to make these principal payments when due. We are in discussions
with our banks to restructure the repayment terms of certain facilities and
modify our loan covenants. The long-term portion of our outstanding debt as
of September 30, 2010 is classified as current debt in our balance sheet.
During this forbearance period, we have continued to operate our business
as usual, including paying our vendors and paying interest on our debt.
"At September 30, 2010, our net debt to capitalization ratio was 37.8%. Our
cash balance at the end of September 30, 2010 was approximately $15.9
million, excluding $6.6 million of restricted cash to be used to fund
payments for our newbuilding program. During the nine months ended
September 30, 2010, we made scheduled debt repayments in the amount of
$48.0 million.
"Our newbuilding program for the six Roymar Class multipurpose tweendeckers
is progressing well, and we expect bank financing with The Royal Bank of
Scotland to be available for them. We took delivery of our first three
vessels in September 2009, March 2010 and September 2010. The three
remaining vessels are expected to be delivered in each of the first three
quarters of 2011.
"In the third quarter of 2010, we continued our drydocking program and
drydocked five vessels for a total of 155 drydocking days."
Results for the Three Months ended September 30, 2010:
For the third quarter ended September 30, 2010, total revenues were $99.8
million, an increase of 34.3% compared to total revenues of $74.3 million
for the same period in 2009. Net loss for the third quarter 2010 was $10.4
million, after loss attributable to the non-controlling interests, which is
an improvement of 42.5% compared to an $18.1 million loss for the same
period in 2009. Loss per ordinary share on a basic and diluted basis were
$0.34 in the third quarter of 2010, calculated based on 30,519,326 shares,
compared to a loss of $0.61 per share for the third quarter of 2009,
calculated based on 29,863,460 shares.
EBITDA, which is a non-GAAP measure, increased to $21.9 million for the
quarter ended September 30, 2010 from $10.5 million in 2009. Please see
"Non-GAAP Reconciliations - EBITDA" following the financial statements in
this press release for a reconciliation of EBITDA to net (loss).
Revenues:
Total revenues for the third quarter of 2010 were $99.8 million which
includes voyage revenues of $75.2 million, time charter revenues of $22.7
million and logistics and other revenues of $1.9 million.
An average of 47 vessels (excluding off-hire) were operated during the
third quarter 2010 compared to 44 vessels (excluding off-hire) during the
same period in 2009.
Voyage Revenues:
Voyage revenues for the quarter ended September 30, 2010 were $75.2
million, an increase of $18.0 million or 31.5% from $57.2 million for the
same period in 2009. The increase in voyage revenue is primarily
attributable to the increase in freight rates and revenue tons carried.
Total cargo volume (including aggregates) increased by 442,000 tons or
21.1% to 2,540,000 tons for the quarter ended September 30, 2010, from
2,098,000 tons for the same period in 2009. This increase is mainly
attributable to the increase in aggregate revenue tons transported.
Non-aggregate revenue tons carried increased by 133,000 tons for third
quarter 2010 primarily due to higher steel and metal concentrate cargoes,
whereas aggregate revenue tons carried increased by 309,000 tons for third
quarter 2010 as compared to third quarter 2009. Freight rates excluding
aggregates increased by $6.83 per ton or 14.6% to $53.64 per ton for
quarter ended September 30, 2010 from $46.81 per ton during the same period
in 2009 and a decrease of 5% from $56.46 per ton for the second quarter
2010.
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 $13,383 per day for the third
quarter of 2010, an increase of 8.8% from $12,296 per day during the third
quarter of 2009 and a decrease of 7.5% from $14,463 per day during the
second quarter of 2010.
Time Charter Revenues:
Time charter revenues increased by $6.7 million or 41.9% to $22.7 million
for the quarter ended September 30, 2010 from $16.0 million for the quarter
ended September 30, 2009. The increase was primarily due to higher average
charter hire rates.
Average Daily Time Charter Equivalent, which is an industry standard metric
reflecting time charter-out revenues during the period reduced by
commissions, was $17,260 per day for the third quarter of 2010, an increase
of 56.2% from $11,048 per day during the same period in 2009 and a decrease
of 6.9% from $18,532 per day during the second quarter of 2010.
Expenses:
Total operating expenses for the quarter ended September 30, 2010 increased
by $16.5 million or 18.8% to $104.1 million from $87.6 million for the same
period in 2009.
Voyage expenses, which include fuel costs, commissions, port call charges
and stevedoring, increased by $9.3 million or 36.6% to $34.8 million for
the quarter ended September 30, 2010. The rise was primarily due to
increases in fuel, commission, stevedore and other cargo-related expenses.
Fuel expenses increased as a result of increased average fuel costs, and
commission expenses increased due to a rise in freight and time charter
revenues.
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 $2.6 million or 9.1% to $31.1 million for the third quarter
2010 as compared to $28.5 million for the third quarter of 2009. The
increase in vessel operating expense was mainly due to the inclusion of
Log-Star's results and higher crew related expenses.
General and administrative expenses increased by $2.1 million or 23.1% to
$11.2 million for the quarter ended September 30, 2010, primarily due to
the inclusion of Log-Star's results and an increase in salary and related
expenses.
Operating expenses for the third quarter 2010 also includes an expense of
$1.3 million related to TBS Logistics Incorporated, our cargo and transport
management subsidiary.
Results for the Nine Months ended September 30, 2010:
For the nine months ended September 30, 2010, total revenues were $311.1
million, an increase of 42.9% compared to the $217.7 million for the same
period 2009. Net loss for the nine months 2010 was $27.9 million, after
loss attributable to the non-controlling interests, which is an improvement
of 50.4% compared to a loss of $56.3 million for the same period in 2009.
Loss per ordinary share on a basic and diluted basis were $0.92 for the
nine months ended September 30, 2010, calculated based on 30,139,778
shares, compared to a loss of $1.89 per share for the same period in 2009,
calculated based on 29,836,239 shares. Net loss for the nine months ended
September 30, 2010 reflects a $5.2 million loss on the sale of the M/V
Savannah Belle and a $5.9 million expense for non-cash equity compensation.
EBITDA, which is a non-GAAP measure, increased by 154.3% to $67.4 million
for the nine months ended September 30, 2010 from $26.5 million in 2009.
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 47 vessels (excluding off-hire) were operated during the nine
months 2010 compared to 44 vessels (excluding off-hire) during the same
period of 2009.
Total revenues of $311.1 million for the nine months 2010, which includes
voyage revenues of $220.2 million, time charter revenues of $83.2 million
and logistic and other revenues of $7.7 million.
Fleet Development:
On September 2, 2010, TBS took delivery of the M/V Montauk Maiden, the
third in the series of six "Roymar Class", 34,000 dwt multipurpose
tweendecker newbuilding vessels that the Company has ordered from China
Communications Construction Company/ Nantong Yahua Shipbuilding Group Co.,
Ltd. for a purchase price of $35.4 million each.
With the delivery of this vessel, TBS' operational fleet expanded to 49
vessels with an aggregate of 1.48 million dwt, consisting of 27
tweendeckers and 22 handymax/ handysize bulk carriers.
Fleet Expansion and Newbuilding Program:
The TBS Newbuilding Program to construct six Roymar Class multipurpose
vessels with retractable tweendecks proceeded with the delivery of three
vessels: the first in September 2009, the second in March 2010 and the
third in September 2010. The Company expects to take delivery of the three
remaining vessels in each of the first three quarters of 2011.
Each of these vessels has box-shaped holds, open hatches and fully
retractable hydraulic tweendecks and is geared with 35-and 40-ton cranes
combinable up to 80 tons. Each will also have a modern fuel-efficient
engine enabling the vessel to operate effectively at 15 knots.
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
September 30, 2010, the Company has made cumulative payments of $77 million
to the Shipyard towards the purchase of the three remaining vessels.
Drydock Program and Vessel Upgrade Program:
For 2010, TBS plans to drydock 16 vessels for approximately 425 drydocking
days with a steel renewal of about 1,666 metric tons at a total cost of
approximately $16.2 million. This includes two vessels that entered into
drydocking during the fourth quarter of 2009.
During the first quarter of 2010, TBS had two vessels that continued in
drydock from the fourth quarter of 2009 for 28 days. In addition, two
vessels entered into drydock for 45 days, requiring about 100 metric tons
of steel. During the second quarter of 2010, five vessels entered into
drydock for 85 days, requiring about 481 metric tons of steel. In the third
quarter of 2010, TBS drydocked three vessels for 124 days, requiring about
400 metric tons of steel. In addition, two vessels that had entered drydock
in the second quarter continued their drydocking for 31 days in this
quarter. In the fourth quarter of 2010, TBS plans to drydock four vessels
for 87 days, requiring about 700 metric tons of steel.
Conference call and webcast:
Tomorrow, November 9, 2010 at 11:00 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: 1-888-713-4218 (from the US) or 1-617-213-4870
(International Dial In). Participant Passcode: 61223734. Participants may
pre-register for the call at
https://cossprereg.btci.com/prereg/key.process?key=PFUJD7RKC.
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 2:00 p.m.
EST on Tuesday, November 9, 2010 until Tuesday, November 16, 2010 by
dialing 1-888-286-8010 (from the US) or 1-617-801-6888 (International Dial
In). Access Code: 39424480. A replay of the webcast will be available soon
after the completion of the call.
Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2010 and 2009
(In thousands, except per share amounts and outstanding shares)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Revenue
Voyage revenue $ 75,196 $ 57,163 $ 220,194 $ 181,417
Time charter revenue 22,656 15,972 83,217 34,311
Logistic revenue (1) 1,655 1,014 7,238 1,550
Other revenue 247 183 414 448
---------- ---------- ---------- ----------
Total Revenue 99,754 74,332 311,063 217,726
---------- ---------- ---------- ----------
Operating expenses
Voyage 34,840 25,505 106,888 81,818
Logistics (1) 1,347 754 4,972 1,175
Vessel 31,081 28,502 90,520 82,001
Depreciation and
amortization of vessels
and other fixed assets 25,623 23,747 76,853 70,069
General and
administrative 11,182 9,086 37,585 26,121
Net loss on sale of
vessel (2) 0 - 5,154 -
---------- ---------- ---------- ----------
Total operating expenses 104,073 87,594 321,972 261,184
---------- ---------- ---------- ----------
(Loss) from operations (4,319) (13,262) (10,909) (43,458)
Other (expenses) and income
Interest expense (6,623) (4,863) (18,191) (12,840)
Loss on extinguishment of
debt (3) - - (200) -
Interest and other income
(expense) 57 (14) 81 (42)
---------- ---------- ---------- ----------
Total other (expenses) and
income, net (6,566) (4,877) (18,310) (12,882)
---------- ---------- ---------- ----------
Net (loss) (10,885) (18,139) (29,219) (56,340)
========== ========== ========== ==========
Less: Net (loss)
attributable to
noncontrolling interest (4) (530) - (1,343) -
---------- ---------- ---------- ----------
Net (loss) attributable to
TBS International plc $ (10,355) $ (18,139) $ (27,876) $ (56,340)
========== ========== ========== ==========
Loss per share
Net (loss) per ordinary
share
Basic and Diluted $ (0.34) $ (0.61) $ (0.92) $ (1.89)
Weighted average ordinary
shares outstanding
Basic and Diluted 30,519,326 29,863,460 30,139,778 29,836,239
Operating Data for the Three and Nine Months Ended
September 30, 2010 and 2009
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------- -----------------
2010 2009 2010 2009
-------- -------- -------- --------
Other Operating Data:
Controlled vessels (at end of period) (5) 49 48 49 48
Chartered vessels (at end of period) (6) 4 - 4 -
Freight Voyage days (7) 3,024 2,630 8,384 8,728
Vessel days (8) 4,650 4,425 13,634 13,151
Revenue tons carried for all cargoes (9) 2,540 2,098 7,588 6,694
Freight rates for all cargoes (10) $ 29.60 $ 27.25 $ 29.02 $ 27.10
Revenue tons carried other than
aggregate cargoes (9) (11) 1,196 1,063 3,516 3,513
Freight rates for other than aggregate
cargoes (10) (11) $ 53.64 $ 46.81 $ 54.41 $ 43.75
Time Charter days 1,262 1,384 4,437 3,411
Daily charter hire rates $ 17,953 $ 11,540 $ 18,756 $ 10,059
TCE per day-Freight Voyages (12) $ 13,383 $ 12,296 $ 14,052 $ 11,726
TCE per day-Time Charters-Out (13) $ 17,260 $ 11,048 $ 17,498 $ 9,255
(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) On June 29, 2010, the Company signed a Memorandum of Agreement to sell
the M/V Savannah Belle. The cost of vessel and improvements less
accumulated depreciation totaled to $7.6 million on September 30,
2010. The sale was completed in July 20, 2010. Net proceeds from the
sale were used to pay down the BOA Revolver. A $5.2 million charge was
recorded on June 30, 2010 to adjust the vessel held for sale to its
net realized value.
(3) In 2010 the loss on extinguishment of debt represents the write-off of
unamortized deferred financing costs in connection with the loan
modifications subsequent to March 31, 2010.
(4) Represents a 30% non controlling interest held by LOG.STAR NAVEGACAO
S.A.
(5) Controlled vessels are vessels that are owned or chartered-in with an
option to purchase. As of September 30, 2010, two vessels in the
controlled fleet were chartered-in with an option to purchase.
(6) 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.
Includes three Brazilian flagged vessels chartered in under a bareboat
charter through our joint venture LOG.STAR NAVEGACAO S.A.
(7) 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.
(8) 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.
(9) In thousands.
(10) 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.
(11) 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.
(12) Daily Time Charter Equivalent or "TCE" rates are defined as voyage
revenue (excluding relets) less voyage expenses during the period
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.
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.
(13) 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 and certain voyage costs (for which
TBS is responsible under some of the time charter contracts) divided
by the number of available time charter days during the period.
Commission for vessels that are time chartered out for the three and
nine months ended September 30, 2010 and September 30, 2009 were
$1.0 million and $3.7 million and $0.7 million and $1.4 million,
respectively. Voyage costs incurred under some time charters were
$1.9 million and $1.3 million for the nine months ending September 30,
2010 and 2009, respectively. Voyage costs in 2010 relate to port costs
incurred in connection with some of the time charter out of vessel in
the Brazilian coastal trade. Additionally voyage costs in 2010 and
2009 reflect fuel costs 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
September 30, December 31,
2010 2009
------------ ------------
Balance Sheet Data (In thousands):
Cash and cash equivalents $ 15,938 $ 51,040
Restricted cash 6,575 8,675
Working capital (deficit) (297,663) (285,823)
Total assets 906,794 953,588
Total debt, including current portion 328,259 351,247
Total shareholders' equity 513,154 537,728
Non-GAAP Reconciliations
Please find below TBS' EBITDA reconciliation for the three and nine months
ended September 30, 2010 and 2009.
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
EBITDA Reconciliation
(In thousands):
Net (loss) attributable to
TBS International plc $ (10,355) $ (18,139) $ (27,876) $ (56,340)
Net interest expense 6,619 4,856 18,376 12,757
Depreciation and Amortization 25,623 23,747 76,853 70,069
--------- --------- --------- ---------
--------- --------- --------- ---------
EBITDA $ 21,887 $ 10,464 $ 67,353 $ 26,486
========= ========= ========= =========
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
beliefs and assumptions.
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:
-- the company's ability to reach agreements with its lenders to amend its
credit facilities and its ability to obtain waivers of, or cure, defaults
under its credit facilities;
-- the company's ability to maintain financial ratios and comply with the
financial covenants required by its credit facilities as amended;
-- the company's ability to finance its operations and raise additional
capital on commercially reasonable terms or at all;
-- changes in demand for and pricing of the company's services, both of
which are difficult to predict due to continuing economic uncertainty;
-- the effect of a decline in vessel valuations;
-- changes in rules and regulations applicable to the shipping industry,
including 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, which may significantly affect overall
vessel tonnage requirements;
-- changes in the typical seasonal variations in charter rates;
-- volatility 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;
-- additional material declines or continued weakness in shipping rates;
-- 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;
-- increases in the cost of the company's drydocking program or delays in
its anticipated drydocking schedule;
-- China Communications Construction Company Ltd./Nantong Yahua
Shipbuilding Group Co., Ltd.'s ability to complete and deliver the
remaining multipurpose tweendeckers on the anticipated schedule and the
ability of the parties to satisfy the conditions in the shipbuilding
agreements;
-- the possible effects of pending and future legislation in the United
States that may limit or eliminate potential U.S. tax benefits resulting
from the company's jurisdiction of incorporation;
-- Irish corporate governance and regulatory requirements which could
prove different or more challenging than currently expected; and
-- other factors that are described in the "Risk Factors" sections of
reports filed with the Securities and Exchange Commission.
About TBS International plc
TBS is a fully-integrated transportation service company that provides
worldwide shipping solutions to a diverse client base of industrial
shippers. Through the TBS Five Star Service consisting of ocean
transportation, operations, logistics, port services, and strategic
planning, TBS offers total project coordination and door-to-door supply
chain management. The TBS shipping network operates liner, parcel and dry
bulk services, supported by a fleet of multipurpose tweendeckers and
handysize and handymax bulk carriers, including specialized heavy-lift
vessels and newbuild tonnage. 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 Senior Executive Vice President and Chief Financial Officer TBS International plc Tel. 914-961-1000 InvestorRequest@tbsship.com Investor Relations / Media: Nicolas Bornozis Capital Link, Inc. New York Tel. 212-661-7566 E-mail: tbs@capitallink.com