Trailer Bridge reported a first quarter net loss of $10.4 million, compared with $300,000 a year earlier, and said its efforts to refinance $82.5 million in bonds due in November “may include an equity component” and require higher-than-expected interest costs.
The carrier said in March that it was working with two lenders to refinance the notes at a combination of fixed and variable interest for at least five years at a blended interest rate of approximately 10.25 percent, compared with 8.55 percent under the current debt. The debt would be covered by substantially all of the company’s revenue-generating assets.
In releasing its results Friday, Trailer Bridge said it is still working with interested lenders and its advisors and “is exploring a number of options and might involve the private or public lending market and may include an equity component. The interest rate the company pays on its overall debt may be higher under such refinancing than previously anticipated.”
The carrier said that as of March 31 it had cash balances of $3.1 million and a working capital deficit of $83.1 million, including the $82.5 million in unrefinanced notes that are listed as current liabilities. Based on eligible receivables, the company had $6.6 million available under its $10 million revolving credit facility.
During the 12 months ended March 31, company operations used $5.6 million in net cash.
Trailer Bridge said its first quarter results were hurt by higher higher fuel costs, lower vessel utilization and a $6.6 million bill for the scheduled five-year inspection-and-maintenance drydocking of two roll-on, roll-off barges used in the carrier’s U.S. mainland-Puerto Rico service.
Revenue fell to $24.8 million from $28.8 million in the first three months of 2010. Vessel utilization was 88.8 percent southbound to Puerto Rico and 22.6 percent northbound, compared with 95.5 percent and 30.2 percent in the first quarter of 2010 and 97.5 percent and 22.2 percent in the fourth quarter of 2010.
The company’s operating loss, including the dry-docking charge, was $8 million, compared with a $2.2 million operating profit in the first quarter of 2010. Adjusted earnings before interest, taxes, depreciation and amortization, was $400,000, compared with $4.4 million a year earlier.
Trailer Bridge is the smallest carrier in the domestic Puerto Rico trade. Others are Horizon Lines, which posted a $33.3 million first quarter loss and is trying to refinance to stave off a debt default threatened by its guilty plea to a felony antitrust violation for price-fixing, and privately held Crowley Maritime and Sea Star Line.