Trailer Bridge, Inc. reported financial results for the third quarter ended September 30, 2002 highlighted by significantly reduced losses and an improved financial condition. The effects from what is anticipated to be continuing improvements in market conditions in the Puerto Rico lane is having a more pronounced effect on fourth quarter results than
in the third quarter.
The discontinuance of the direct Northeast service at the end of last year, while significantly reducing costs, reduced revenues in Q3 2002 and led to an overall reduction in vessel capacity deployed of 20.4% this quarter when compared to the third quarter of 2001. Total revenue for the three months ended September 30, 2002 was $18,488,328, a decrease of $1,563,808, or 7.8%, compared to the prior year period; revenues in the third quarter of 2001 included sales related to the now terminated Northeast service. The company's total volume of freight moving to and from Puerto Rico decreased 9 percent compared to the year earlier period.
Due to the discontinuance of the Northeast service, the company believes that volume and yield comparisons solely related to freight moving via Jacksonville are most relevant. For the three months ended September 30, 2002, total southbound volume over Jacksonville increased 8.1% compared to the year earlier period and 3.5% sequentially from the second quarter of 2002. Northbound, total volume through Jacksonville increased 5.2% from the year ago period and 4.2% sequentially from the second quarter. The effective yield of all of the southbound freight moving via Jacksonville represented an increase of 0.6% from the year earlier period and a decrease of 1.5% sequentially from the second quarter. Northbound, the effective yield on all cargo moving via Jacksonville increased 2.9% from the year ago period and decreased 7.7% sequentially from the second quarter of 2002.
Trailer Bridge's deployed vessel capacity utilization overall during the third quarter of 2002 was 79.3% to Puerto Rico and 22.6% from Puerto Rico, compared to 69.5% and 19.1% overall, respectively, during the third quarter of 2001. Compared sequentially, the third quarter of 2002 capacity utilization figures represented increases southbound and northbound from the second quarter when deployed vessels were utilized 75.5% southbound and 21.3% northbound. The company had an average of 198 tractor units operating on the mainland during the quarter, generating an average of 9,349 miles per month of which 80.2% were loaded, an improvement in both productivity and efficiency from the year earlier period (8,829 miles and 79.0% loaded, respectively) and a slight reduction sequentially from the second quarter of 2002 (9,383 miles and 82.1% loaded, respectively).
The company's operating loss for the third quarter ended September 30, 2002 narrowed significantly to $1,519,385 from an operating loss of $4,851,420 in the year earlier period. This improvement was due to increased volume in Jacksonville, discontinuing the direct Northeast service, reductions in headcount and equipment and other cost-cutting initiatives. Compared sequentially to the second quarter of 2002, the operating loss increased by $1,057,436 primarily due to a difference in revenue mix, higher purchased transportation costs resulting from that difference and slight reductions in average revenue per actual trailer southbound and northbound. Total new car revenue for the third quarter was $1,185,567 less than the second quarter. The incremental costs associated with new car revenue are less than the incremental costs associated with trailers
. In addition, part of the decrease in new car revenue included a non-recurring movement of new cars that moved northbound during the second quarter. All of Trailer Bridge's new car revenue results from contracts where Trailer Bridge is the exclusive carrier. As a result of the above, Trailer Bridge had an operating ratio of 108.2% during the third quarter of 2002 compared to 124.2% during the year earlier period and 102.5% compared sequentially to the second quarter. Net interest expense of $758,010 was down slightly from the year earlier period. Trailer Bridge also
realized a net gain of $14,923 from equipment sales and other non-operating items during the quarter compared to a net gain of $38,157 from equipment sales during the year earlier quarter.
For the third quarter ended September 30, 2002, Trailer Bridge's loss before income taxes was $2,262,472, an improvement of $3,358,075 compared to the $5,620,547 pre-tax loss in the third quarter of 2001. With an effective tax rate of zero, the net loss for the third quarter was $2,265,777, as compared to a net loss of $5,598,418, for the year earlier period and a net loss of $1,130,298, sequentially in the second quarter of 2002.