TBS International Reports Q1 Results

DUBLIN, IRELAND, May 09, 2011 (MARKETWIRE via COMTEX) -- TBS International plc (NASDAQ: TBSI) announced today its financial and operating results for the first quarter ended March 31, 2011.

Management Commentary:

Ferdinand V. Lepere, Senior Executive Vice President and Chief Financial Officer, commented:

"The weakening freight and charter rate environment that began in the second half of 2010 continued into early 2011, and adversely affected our revenues and our ability to maintain financial ratios as required by our credit facilities.

"Our lenders, as previously announced on April 18, 2011, agreed to modify our financial covenants through December 31, 2011, reducing the minimum consolidated interest charges coverage ratio for the fiscal quarters ending June 30, 2011 through December 31, 2011 from 3.35 to 1.00 to 2.50 to 1.00. In addition, the modifications increased the maximum consolidated leverage ratio for the same periods from 4.00 to 1.00 to 5.10 to 1.00, and reduced the minimum cash requirement from $15 million to $10 million for the period from July 1, 2011 to December 31, 2011.

"We expect that these amendments will allow us to remain in compliance with our various credit facilities through December 31, 2011. After December 31, 2011, financial covenant requirements will revert back to the levels set in the January 28, 2011 credit agreement amendments. Unless the Baltic Dry Index and the freight and charter rates that we obtain strengthen significantly in the near future, it is likely that after December 31, 2011 we would fail to meet the tests under certain of our financial covenants. Our lenders have agreed to enter into further negotiations at that time, if necessary, to seek further modifications of those financial covenants. The ability to make the cash payment later in the year and maintain our minimum cash requirement of $10 million is contingent on obtaining additional funding. Failure to meet any of the financial covenants or our inability to obtain a waiver of such future covenant violations would continue to raise substantial doubt about our ability to continue as a going concern. At March 31, 2011, we were in compliance with all the financial covenants relating to our debt as amended on January 28, 2011.

"At the end of first quarter 2011, our net debt to capitalization ratio was 53.9%, and our cash balance, excluding restricted cash, was approximately $18.4 million. In connection with our newbuilding program, for the first quarter 2011, we paid $6.2 million from our restricted cash deposit to the shipyard.

"Under our newbuilding program, we have taken delivery of five of six newbuildings. During the first quarter of 2011, we took delivery of two of those five vessels and the final vessel is scheduled to deliver during the second quarter of 2011. These 34,000 dead weight ton ("dwt") vessels are a larger vessel class and their addition to our fleet will be a significant milestone in the implementation of our business plan to modernize and expand our fleet.

"During first quarter 2011, we continued our drydocking program and drydocked five vessels, including one vessel which entered into drydock during the fourth quarter of 2010, for a total of 187 days."

 

Source: http://www.tbsship.com/