Trailer Bridge posts loss, predicts gains
Beset by dry-docking costs and a temporary shutdown of the Puerto Rican government during the second quarter, the Jacksonville-based, Puerto Rico trade carrier Trailer Bridge reported a net loss of $9.0 million for the quarter.
Trailer Bridge said the dry docking of one of its roll-on/roll-off vessels added a total of $11.7 in costs for repairs and chartering a smaller replacement barge, and also reduced the amount of cargo it could carry during the quarter.
The company also attributed a reduction on cargo volumes to a two-week, partial shutdown of the Puerto Rican government. A budget impasse between the governor and the legislator led to the shutdown of many government operations and put an estimated 95,000 government employees out of work, significantly impacting consumer activities. The government employs roughly one-third of the Puerto Rican work force.
Southbound volumes decreased 15.4 percent during the second quarter, compared to the second quarter of 2005.
Trailer Bridge reported that revenues were down 8.2 percent to $25.0 million, and there was an operating loss of $6.5 million.
For the second quarter of 2005, Trailer Bridge had a net income of $2.5 million and an operating income of $5.1 million.
Trailer Bridge noted that in calculating its costs related to dry docking, the company used an 'expense-as-incurred' method at the recommendation of the Securities and Exchange Commission. That led to higher quarterly costs than if the company had used a 'defer-and-amortize' accounting method that spreads costs. That method is used by other companies in the same market, Trailer Bridge explained.
In a Tuesday morning conference call, Trailer Bridge chairman and CEO John McCown described the quarterly costs and the impacts of the government shutdown as 'an episodic situation we don't anticipate repeating.'
In a statement released Monday, McCown said the results of the second quarter will be offset by gains during the rest of the year. 'The actual results we will report for the third and fourth quarters of this year will demonstrate that the second quarter was an aberration,' he said. 'For the first six weeks of the third quarter, revenue is running 13 percent ahead of the second quarter pace and we take this as an indication that much of the effect from the Puerto Rico government shutdown is behind us. This is the first week that we have resumed weekly roll-on/roll-off sailings, and that will benefit us further as the revenue and volume disruption from everything related to the dry-dockings was meaningful. With the impact of the dry-dockings and the government shutdown behind us, I'm anticipating a robust second half as we return to growing earnings.'