Metric Q1 2008 Q1 2007
------ ------------- -------------
Revenue (thousands) $ 131,576 $ 70,326
Net Income (thousands) $ 45,378 $ 14,404
EPS (diluted) $ 1.62 $ 0.51
Weighted Average Number of Shares (diluted) 28,080,071 28,035,881
EBITDA (thousands)(1) $ 64,300 $ 25,419
Drydock Days 147 212
Freight Voyages
---------------
Average Daily Voyage TCE $ 28,303 $ 17,816
Freight Voyage Days 2,375 1,898
Tons of Cargo Shipped (thousands) 2,044 1,502
Average Freight Rate for All Cargoes $ 48.02 $ 34.58
Average Freight Rate excluding Aggregates $ 86.32 $ 55.19
Bunker Cost/Voyage Day $ 6,233 $ 4,318
Time Charter out Voyages
------------------------
Average Daily Time Charter TCE $ 30,339 $ 17,115
Time Charter Days 1,030 994
(1) EBITDA is a non-GAAP financial measure. Please refer to "Non-GAAP
Reconciliations-EBITDA" following the financial statements included
in this press release for a reconciliation of EBITDA to Net Income.
Management Commentary:
Joseph E. Royce, Chairman, Chief Executive Officer and President, stated:
"In the first quarter of 2008, TBS continued to build on the momentum we
generated in 2007, achieving record quarterly results for revenues, EBITDA,
net income and earnings per share. With our increased cargo volumes,
enlarged fleet and improved freight rates, we have a positive outlook for
the entire year.
"Once again I must applaud the professionalism and dedication of the almost
280 worldwide employees of TBS and our affiliated agencies who executed the
TBS business growth model as a pure dry cargo shipping and logistics
company. This positioning as a solid growth company has enabled TBS to
prosper significantly from the very positive cargo volume and freight rate
environment that is buoying the dry cargo market.
"The Logistics division of our TBS Five Star Service (Ocean Transportation,
Logistics, Port Services, Operations and Strategic Planning) is gaining
traction and the prospects for 2008 look promising.
"TBS increased cargo volumes and gained market share in our established
trading lanes. We grow our fleet in response to the growth of our business
and are looking for suitable vessel acquisitions in the second-hand market.
Our program to build six Roymar Class 34,000 dwt multipurpose vessels with
retractable tweendecks is progressing with the laying of the keel of the
first vessel having taken place in March. We are scheduled to receive
delivery of two vessels in 2009 and four vessels in 2010. We are now
investigating the feasibility of building additional vessels for delivery
in 2011.
"Since January 1, 2008, as a result of our customers' expanded dry cargo
transportation requirements, we:
-- Took delivery of six vessels and have two additional vessels under
purchase contracts. This will bring our operational fleet to 44 vessels
comprised of 23 multipurpose tweendeckers and 21 handymax/ handysize bulk
carriers;
-- Financed the six delivered vessels and increased our liquidity;
-- Secured a new contract for the transport of about two million tons of
aggregates in the Middle East; and
-- Celebrated the fifteenth anniversary of the founding of our Company in
March.
"As part of our comprehensive drydock program, which will continue in 2008,
TBS drydocked five vessels during the first quarter, including one vessel
which extended in the drydock from the fourth quarter of 2007, and plans to
drydock 17 vessels for the full year (plus new vessel acquisitions
scheduled for a 2008 drydock).
"TBS is strategically positioned to participate in the expanding
globalization of world trade, particularly in logistic and project
businesses relating to the steel, mining, energy and construction
industries. We have strong franchises in Latin America, East Asia, the
Middle East and Africa. Our TBS fleet of multipurpose tweendeckers is
uniquely suited to the transportation of project cargoes, and our portside
and inland logistics services enable TBS to provide complete solutions for
the project's transportation requirements.
"Looking at 2008 and beyond, we believe that TBS is positioned to continue
benefiting from the positive fundamentals of our business growth model."
Ferdinand V. Lepere, Executive Vice President and Chief Financial Officer,
commented: "The expansion of our overall liquidity through the negotiation
of additional credit facilities at competitive terms is a testimony to our
strong financial condition and profitability, as well as to the soundness
of TBS' business model. Specifically, we:
-- Continued our moderate leverage, strong financial condition and access
to bank financing;
-- Closed a $75 million loan facility with a syndicate of banks led by DVB
Group Merchant Bank (Asia) Ltd.;
-- Closed a $35 million loan facility with AIG Commercial Equipment
Finance, Inc.;
-- Restructured and expanded our credit facility with the Banc of America
Syndicate to $267.5 million from its existing balance of approximately $120
million. This expansion, originally targeted at $200 million, was
oversubscribed; and
-- Received commitments from two European Banks to separately finance the
Ottawa Princess and the Caribe Maiden.
"We are particularly pleased with the support from the international
banking community."
First Quarter 2008 Results:
For the first quarter ended March 31, 2008, total revenues were $131.6
million, an increase of 87.2% compared to the $70.3 million for the same
period in 2007. Net income for the first quarter 2008 was $45.4 million, an
increase of 215.3% compared to $14.4 million for the same period in 2007.
Net income was $1.62 per diluted share in the first quarter of 2008
compared to $0.51 for the first quarter 2007.
EBITDA, which is a non-GAAP measure, increased 153.1% to $64.3 million for
the first quarter 2008 from $25.4 million in 2007. Please see "Non-GAAP
Reconciliations - EBITDA" following the financial statements in this press
release for a reconciliation of EBITDA to net income.
Revenues:
Total revenues of $131.6 million for the first quarter 2008 include voyage
revenues of $98.2 million, time charter revenues of $32.7 million and other
revenues of $0.7 million.
An average of 37 vessels (excluding off-hire) were operated during the
first quarter 2008 compared to 32 vessels (excluding off-hire) during the
same period of 2007.
Voyage Revenues:
Voyage revenues in the first quarter 2008 were $98.2 million, an increase
of $46.3 million or 89.2% from the $51.9 million during the same period in
2007.
General cargo volume (excluding aggregates) increased 153,079 tons or 18.2%
to 993,829 tons for the first quarter 2008 from 840,750 tons for the same
period in 2007. Reflecting stronger market conditions, freight rates
excluding aggregates increased $31.13 per ton or 56.4% to $86.32 per ton
for the first quarter 2008 from $55.19 per ton during the same period in
2007.
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 $28,303 per vessel in the first
quarter 2008, an increase of 58.9% from the $17,816 during the same period
in 2007 and an increase of 17.2% from the $24,149 per day during the fourth
quarter 2007, indicative of the continued market strength in the industry.
Total cargo volume (including aggregates) increased 541,862 tons or 36.1%
to 2,043,952 tons for the first quarter 2008 from 1,502,090 for the same
period in 2007. The majority of the increase in the cargo volume is
attributed to the increase in aggregates carried as well as an increase in
the non-aggregate bulk cargo products carried.
Time Charter Revenues:
Time charter revenues increased by $14.6 million or 80.7% to $32.7 million
for the first quarter 2008 from $18.1 million for the same period in 2007.
Average Daily Time Charter Equivalent which is an industry standard metric
reflecting time charter-out revenues during the period reduced by
commissions was $30,339 per day in the first quarter 2008, an increase of
77.3% from the $17,115 during the same period of 2007. The increase in the
average charter hire rate per day is mainly due to the continued strength
in the overall worldwide shipping spot market rates.
Expenses:
Total operating expenses for the first quarter 2008 increased by $28.0
million or 52.7% to $81.1 million from $53.1 million for the same period in
2007. However, as a percentage of revenue, total operating expenses
decreased by 13.9% to 61.6% for the first quarter of 2008 from 75.5% for
the same period of 2007.
Voyage expenses, which include fuel, commissions, port call charges and
stevedoring increased by $13.2 million or 69.0% to $32.4 million for the
first quarter 2008. However, as a percentage of total revenue, they
decreased by 2.7% as compared to the same period last year. The increase is
due to higher average fuel costs and commission expense as a result of
higher voyage revenues, as well as port call expenses and stevedore and
other cargo-related expenses.
Vessel expenses which consist of operating expenses relating to owned
vessels, such as crewing, stores, maintenance, insurance and charter hire
for vessels we chartered-in increased by $5.8 million or 33.0% to $23.4
million for the first quarter 2008 as compared to $17.6 million for the
same period in 2007. This increase reflects an increase in average daily
operating costs and the number of vessel days for owned/controlled vessels
as well as increased hire rates for vessels we charter in.
General and administrative expenses increased by $4.6 million or 63.9% to
$11.8 million in the first quarter 2008 reflecting an increase in staff
levels due to the growth of TBS' business.
Net interest expense for the first quarter 2008 increased by $0.7 million
as compared to the same period last year. This is primarily due to higher
debt levels, higher fees and amortized deferred financing costs, and a
decrease in the valuation of an interest rate swap contract that did not
qualify for hedge accounting.
Recent Fleet Developments:
On March 25, 2008, TBS took delivery of the M.V. Ottawa Princess, formerly
known as the M.V. Wedellsborg, an acquisition the Company announced in
December 2007 when it was purchased en bloc for $46 million charter free
along with its sister vessel, the M.V. Caribe Maiden.
On April 18, 2008, the Company entered into an agreement to acquire the
M.V. North Star, to be renamed the M.V. Houma Belle, a 1985 built, 42,219
dwt handymax bulk carrier for $34.0 million. TBS expects to take delivery
of this vessel in June 2008.
TBS's current fleet consists of 42 multipurpose tweendeckers, handymax and
handysize vessels. TBS expects to take delivery of two handymax bulk
carriers (the M.V. Canarsie Princess and M.V. Houma Belle) by the end of
the second quarter 2008. Once these deliveries are concluded, the TBS fleet
will be comprised of 44 vessels, with an aggregate of 1,310,719 dwt,
including 23 multipurpose tweendeckers and a combination of 21 handysize
and handymax bulk carriers.
Fleet Expansion and Newbuilding Program:
The previously announced TBS Newbuilding Program to construct six
multipurpose vessels with retractable tweendecks is proceeding with the
laying of the keel of the first vessel in March 2008. We expect delivery
of two vessels in 2009 and four vessels in 2010.
TBS 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.
TBS 2008 Intensive Drydock and Vessel Upgrade Program:
For 2008, TBS plans to drydock 17 vessels for approximately 572 drydocking
days with a steel renewal of about 2,695 metric tons at a total cost of
approximately $16.4 million.
Our anticipated 2008 drydocking schedule is as follows:
-- During the three months ended March 31, 2008, TBS drydocked one vessel
that entered into drydock during the fourth quarter of 2007 and continued
its drydocking for 15 days in the first quarter of 2008. Additionally, four
vessels entered drydock requiring about 895 metric tons of steel for a
total of 132 drydock days.
-- Second quarter 2008, five vessels requiring about 650 metric tons of
steel and about 200 drydock days.
-- Third quarter 2008, three vessels requiring about 350 metric tons of
steel and about 100 drydock days.
-- Fourth quarter 2008, four vessels requiring about 800 metric tons of
steel and about 125 days in drydock.
Conference call and webcast:
On Friday, May 9, 2008 at 10:00 a.m. EDT, the company's management will
host a conference call to discuss the results.
Conference call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1-888-713-4216 (from the US) or 1-617-213-4868
(International Dial In). Participant Passcode: 83764873. The conference
call will also be webcast live on the company's website: www.tbsship.com by
clicking on the webcast link. Participants may pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=PLEJC8TEB.
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 12:00
p.m. EDT on Friday, May 9, 2008 until Friday, May 16, 2008 by dialing
1-888-286-8010 (from the US) or 1-617-801-6888 (International Dial In).
Access Code: 45413552. A replay of the webcast will be available soon
after the completion of the call.
Consolidated Statements of Operations
For the First Quarter
Ended March 31, 2008 and 2007
(In thousands, except for share and per share amounts)
Three Months Ended
March 31,
-------------------------
2008 2007
---------- ----------
Revenue:
Voyage revenue $ 98,160 $ 51,939
Time charter revenue 32,726 18,069
Other revenue 690 318
---------- ----------
Total revenue 131,576 70,326
---------- ----------
Operating expenses:
Voyage 32,418 19,181
Vessel 23,434 17,557
Depreciation and amortization of vessels
and other fixed assets 13,493 8,414
General and administrative 11,767 7,180
Loss from sale of vessel (1) 0 779
---------- ----------
Total operating expenses 81,112 53,111
---------- ----------
Income from operations 50,464 17,215
---------- ----------
Other (expenses) and income:
Interest expense (3,437) (2,772)
Loss on extinguishment of debt (2) (2,318) -
Interest and other income (expense) 669 (39)
---------- ----------
Total other (expenses) and income, net (5,086) (2,811)
---------- ----------
Net income $ 45,378 $ 14,404
========== ==========
Earnings per share:
Net income per common share:
Basic $ 1.62 $ 0.51
Diluted $ 1.62 $ 0.51
Weighted average common shares outstanding:
Basic (3) 28,044,310 28,013,310
Diluted 28,080,071 28,035,881
Operating Data for the Three Months Ended March 31, 2008 and 2007
Three Months Ended
March 31,
-------------------------
2008 2007
---------- ----------
Other Operating Data:
Controlled vessels (at end of period) (4) 42 33
Chartered vessels (at end of period) (5) 1 4
Freight Voyage days (6) 2,375 1,898
Vessel days (7) 3,739 3,186
Tons of cargo shipped (8) 2,044 1,502
Revenue per ton (9) $ 48.02 $ 34.58
Tons of cargo shipped, excluding
aggregates (8) (10) 994 841
Revenue per ton, excluding
aggregates (9) (10) $ 86.32 $ 55.19
Chartered-out days 1,030 994
Chartered-out rate per day $ 31,773 $ 18,178
TCE per day - Freight Voyages (11) $ 28,303 $ 17,816
TCE per day - Time Charters - Out (12) $ 30,339 $ 17,115
(1) The 2007 loss on sale of vessel represents the loss on the sale of the
Maya Princess of $0.8 million.
(2) In 2008 the loss on early extinguishment of debt represents the
write-off of unamortized debt finance costs of $2.3 in connection with
the amended and restated Bank of America credit facility on March 26,
2008.
(3) Diluted weighted average common shares outstanding for 2008 and 2007
includes 35,761 and 22,571 weighted average common shares,
respectively, relating to the restricted Class A common shares granted
to our employees and independent directors.
(4) Controlled vessels are vessels that are owned or charter-in with an
option to purchase. As of March 31, 2008, two vessels in the
controlled fleet were chartered-in with an option to purchase.
(5) Represents both vessels that were chartered-in under short-term
charters (less than one year at the start of the charter) and charter
in of vessels under long-term charters without an option to purchase.
(6) Represents the number of days controlled and time-chartered vessels
were operated by the Company performing freight voyages excluding
off-hire days. Excludes time charter out 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 the
vessel is operated, 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, 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.
(11) Time Charter Equivalent or "TCE" rates are defined as voyage revenue
less voyage expenses during the period divided by the number of
available freight voyage days during the period. Voyage expenses
include the following expenses: 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 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.
(12) 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 time charter
days during the period. Commissions for vessels that are time
chartered out for the three months ended March 31, 2008 and March 31,
2007 were $1.5 million and $1.1 million, respectively. 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. No voyage expenses are
deducted because they are not applicable.
Balance Sheet Data
Please find below TBS' selected balance sheet data for the three months
ended March 31, 2008 and 2007.
March 31, December 31,
2008 2007
---------- ----------
Balance Sheet Data (In thousands):
Cash and cash equivalents $ 54,867 $ 30,498
Working capital (deficit) (4,037) 1,744
Total assets 757,258 559,113
Long-term debt, including current portion 336,750 180,166
Total shareholders' equity 362,060 319,563
Non-GAAP Reconciliations
Please find below TBS' EBITDA reconciliation for the three months ended
March 31, 2008 and 2007.
Three Months Ended
March 31,
-------------------------
2008 2007
---------- ----------
EBITDA Reconciliation (In thousands):
Net Income $ 45,378 $ 14,404
Net interest expense 5,429 2,601
Depreciation and Amortization 13,493 8,414
---------- ----------
EBITDA $ 64,300 $ 25,419
========== ==========
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, 2007 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