Trailer Bridge Reports 2Q Results

Trailer Bridge, Inc. reported the financial results for the second quarter ended June 30, 2004 (see attached table), highlighted by net income of $988,823, a $1.7 million improvement compared to the second quarter of 2003, and a 7.9% increase in total operating revenues.

Total revenue for the three months ended June 30, 2004 was $24,102,899, an increase of $1,769,672, or 7.9%, compared to the second quarter of 2003 and an increase of $1,194,169, or 5.2%, sequentially compared to the first quarter. The effective revenue per container equivalent of all of the southbound cargo represented an increase of 6.0% from the year earlier period and an increase of 1.9% compared sequentially to the first quarter.

The Company's Jacksonville-San Juan deployed vessel capacity utilization during the second quarter was 91.5% to Puerto Rico and 30.8% from Puerto Rico compared to 94.9% and 26.5%, respectively, during the second quarter of 2003. The operating income for the second quarter ended June 30, 2004 was $1,716,483, an improvement of $1,637,979 compared to the operating income of $78,504 in the prior year period. The operating ratio was 92.9% during the second quarter of 2004, compared to an operating ratio of 99.6% during the second quarter of 2003 and 95.5% during the first quarter of 2004. Based upon the Company’s substantial net operating loss carryforward, no income tax provision has been reflected in the second quarter income statement. At December 31, 2003, the deferred tax asset was $22,687,373 but a 100% valuation allowance precluded it from appearing on the balance sheet.

Net income for the second quarter of 2004 was $988,823, an improvement of $1,654,165 compared to a net loss of $665,342 in the same period last year. After the effect of an undeclared preferred stock dividend and accretion of preferred stock discount related to the preferred stock held by its Kadampanattu Corp. (“K. Corp.”) affiliate, the Company recorded net income per diluted common share of $.04 in the second quarter of 2004 compared to a net loss per diluted common share of $.11 in the second quarter of 2003 and a net loss per diluted common share of $.01 in the first quarter.

Trailer Bridge recently announced an agreement to purchase the stock of its Kadampanattu Corp. affiliate, from which it presently charters the two roll-on, roll-off vessels, for $32 million. The closing of this transaction will cancel the charter as well as the $24 million of preferred stock held by the affiliate. The Company anticipates it will be successful in arranging satisfactory financing to fund this transaction by the end of the year, although there can be no assurance that this will happen.

Upon the closing of this transaction, there will be an immediate and sharp benefit to both the Company’s earnings and cash flow, although the precise amount will depend upon the final structure. John D. McCown, Chairman and CEO, said, “It’s an entirely different sector today as the effects of an improving supply/demand equation continue to roll out. We are now beginning to experience the more pronounced bottom line effect from increased rates and our net rate increases are higher when you consider the shorter inland length of haul in the second quarter. The underlying trends in our business and the transforming opportunity in the form of closing the K Corp. transaction have us well positioned for improved results in the future.”