TBS reports loss as revenue shrinks

TBS reports loss as revenue shrinks    TBS International said it had a first quarter net loss of $18 million compared to a $7.8 million loss in the same 2010 period.
   Revenue was $89.8 million in the first quarter compared to $100.1 million in the first quarter of 2010.
   The company warned it may have a continuing need for covenant waivers into 2012 to continue as a going concern.
   “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,” said Ferdinand V. Lepere, senior executive vice president and chief financial officer.
   He said the company’s lenders have agreed to modify TBS’s financial covenants through the end of 2011 to reduce the minimum consolidated interest charges coverage ratio, increase the maximum consolidated leverage ratio, and reduce the minimum cash requirement.
   “We expect that these amendments will allow us to remain in compliance with our various credit facilities through Dec. 31, 2011,' he said. 'After Dec. 31, financial covenant requirements will revert back to the levels set in the Jan. 28, 2011 credit agreement amendments.
   “Unless the Baltic Dry Index (BDI) and the freight and charter rates that we obtain strengthen significantly in the near future, it is likely that after Dec. 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,” he said.
   The BDI on Monday was 1,348. Last May it was as high as 4,209.
   “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,” said Lepere said.
   TBS operates a fleet of 51 vessels, consisting of 29 tweendeckers and 22 handymax/handysize bulk carriers, with aggregate capacity of 1.55 million deadweight tons.